FACTOR IN FINE WOOL MARKET

Press, Volume CVII, Issue 31500, 14 October 1967, Page 8

FACTOR IN FINE WOOL MARKET

One of the reasons why the fine wool market has been lagging in New Zealand recently has been the lack of interest of Japan. A buyer who is in close touch with the Japanese market said that at a Christchurch sale last season, when Japan dropped out of the market, halfbred wools dropped in price by about 2d to 3d per lb. If Japan was in -the market the reverse could happen, he said. This is an indication of the influence of Japanese competition. “Of course they are an important factor in the Australian market—when they are buying heavily they make the fine wool market there,” said the buyer. Japan also buys carpel wools as well as the finer wools, but the buyer said that in the last two years her purchases were more in the fine wool category. According to the economie service of the Meat and Wool Boards’ “Annual Review oi the Sheep Industry” in 1966 67, out of exports oi 546,400,0001 b of wool on i greasy basis made to al destinations, Japan tool 58,500,0001 b, following ii importance the United King don. with 127.3m1b, th. United States 84mlb am France 65.8m1b. Of Japan’: imports some 13.6m1b wen of 56s count and finer an< another 26.5m1b of 48s 50i to 50s 565. It is pointed out tha exports to Japan in a specifii period can be misleading, li that supplies purchased fo Japan can sometimes be heli over for a long time and ma; not have been purchased 11 the period under review. The buyer mentioned abovi visited Japan shortly befon the start of the current woo selling .season and at tha stage he said opinion then

was that they would buy as much or more wool than in the previous season and that prices for wools of 56s quality and finer would be on 5 a par with last season. .. However, Japanese confidence had obviously been i shaken by the easier market .. in Australia at the opening of j the new season, which had j also been followed by the , weaker market in New Zea- < land. It seemed that Japan now, , In line with the majority, if not all other countries, was ' destocking and running very much on a hand-to-mouth 1 basis as far as wool supplies were concerned. e The one factor that could * give some little hope for optiI mism in these circumstances was that when slocks were *- being run down mills had to r come into the market again ‘ and this could produce a little hardening and give a a little impetus to the market. Actually Japan was giving c limited support to the New '1 Zealand market and their inf terest was livening a little, i- the buyer said earlier in the if week. Although they could a buy substantially cheaper II elsewhere, he said that they k were interested in the more n spongy types of halfbreds that they could get here. ie As far as the crossbred market was concerned the • s buyer said that with the e shadow of the New Zealand d stock pile and stocks also in South America, and also to some extent in the United . Kingdom, there seemed to be " little or no hope of any imlc provement in the market in n the foreseeable future. On top of this was the explosion d of synthetic fibre production. V He had been given figures in n Japan which showed that world production of man-made e fibres had rocketed from e 536,000 tons in 1958 tc )1 2,862,000 tons last year and it to an estimated 3,888,000 tom :e this year.

The buyer said that when he was in Japan recently there had been no evidence of any balance of payments problem, but on the other hand Japan could be vulnerable to changing economic conditions in other countries as far as her exports to these were concerned. Another buyer at last week’s Christchurch sale noted that significant factors in the fine wool market were both Japanese and Eastern European competition.