Now Subsidised Wool

Press, Volume CVII, Issue 31500, 14 October 1967, Page 12

Now Subsidised Wool

Since the Dunedin wool sale two weeks .ago it has been apparent that the New Zealand Wool Commission could not continue to support the market at the prices fixed at the start of the season unless there was an early and substantial improvement in prices. That the commission bought 49 per cent of the wool offered at Dunedin, and only 33 per cent of the Napier offering yesterday, might suggest that there has been an improvement in the market; but the two offerings were quite dissimilar. The Dunedin sale comprised a much higher proportion of fine wools than the average New Zealand offering, the Ngpier sale a high proportion of second-shear wool, of which there is a temporary shortage. The Dunedin offering was not typical of the New Zealand dip and the Napier offering was not typical of New Zealand crossbred wool Any improvement in the last two weeks in the prices of coarse crossbred wool, the greater part of which has yet to be auctioned, has been slight The commission faced the prospect of buying almost half the wool put up for sale throughout the selling season. Such a prospect must have daunted the Government as much as the commission; for even if the commission had been prepared to stockpile'wool at a greater rate than last season the Government could scarcely have raised enough overseas funds by way of loans to make good the deficit in export income brought about by the commission’s activities. For the rest of this season, at least, the Government and the commission are committed to a policy of subsidising auction prices to the grower. There will be many autopsies on this season’s short-lived opening floor price and much discussion of last night’s revision. It is too early yet to draw conclusions. If the commission had made a different decision at the start of the season, the course of market prices might have been quite different. But this much is certain: if the commission had abandoned its policy of buying-in wool and holding it at the start of this season—or, as some of its critics had urged before the end of last season, the prices since paid by overseas buyers would have been lower.

The woolgrower is still assured of his 25c per lb for wool this season, and the nation’s export receipts will benefit by the sale of the wool to overseas buyers instead of to the commission and local mills These are the two immediate problems which had to be solved; last night’s decision has bought time to consider the long-term problems of the future of the commission and, indeed, at tire New Zealand woolgrowing industry.