Synthetics May Put Ceiling On Wool

Press, Volume CIV, Issue 30811, 24 July 1965, Page 1

Synthetics May Put Ceiling On Wool

The expanding production of synthetic fibres, the introduction of new competitive fibres and the improvement of existing fibres seemed likely to impose a ceiling on wool prices for some time to come, Mr F. S. Arthur, the London agent of the New Zealand Wool Commission, said in Christchurch last evening.

“To that extent, perhaps, a measure of greater stability can be expected in the wool market than has been the experience in recent times,” he said. Mr Arthur had been asked whether he considered the floor price scheme operated by the commission, which had the effect of putting a bottom to the wool market, should not be extended to embrace a ceiling price, at which point the commission would also buy In wool. It would be for growers, said Mr Arthur, through the efficient production and preparation of their clips for the market, combined with skilful promotion, publicity and scientific research, to create in the mind of the public an image of wool, which by reason of its intrinsic qualities, would attract a premium price

over the price of competitive fibres. Discussing future wool prices, Mr Arthur said that the last season had been a difficult one for all sections of the wool textile industry and at the present time there were various factors operating to prevent anything in the nature of a sharp rise in prices, like those in the 196364 season. These factors included the deflationaiy policies being followed by important consuming countries in Europe—notably France and Italy, and more recently the United Kingdom—where restrictions on bank credit and the high cost of finance were tending to restrict consumption and the building up of stocks of wool and processed products. How permanent these restrictions were remained to be seen, said Mr Arthur. But the present price of wool seemed to be a reasonable one Which should encourage consumption and enable the

fibre to compete on reasonable terms with competitive fibres. There could be little doubt, he said, that the sharp rise in prices in the 1963-64 season, which provided an average price for the season of 55d, and the subsequent equally sharp fall, had been a serious blow to the use of wool. It had encouraged the use of synthetics, not only from the point of view of price. There had also been the losses suffered by the industry through its stocks, when synthetics on the other hand were available at a stable price, and when required, without the need for carrying stocks with the attendant risk of market fluctuation. In considering the recent sharp fall in wool prices, Mr Arthur said it should not be overlooked that this was a movement which had not been confined to wool. During the same period there had been equally sharp, if not more severe falls, in the prices of raw materials entering international trade under varying methods of marketing.