THREAT TO PRIVATE WOOLBUYERS

Press, Volume CVII, Issue 31501, 16 October 1967, Page 1

THREAT TO PRIVATE WOOLBUYERS

The new double floor price system for wool threatens to put private buyers out of business by forcing all growers to sell through auction to secure protection of the 25 cents per lb floor level up to which growers’ returns will be subsidised, while wool will be sold to the trade down to an average of 16} cents per lb.

An emergency meeting of the executive of the Federation of New Zealand Wool Merchants will be held in Wellington today to consider the situation.

The president of the federation, Mr H. J. Dewe, of Feilding, said in a telephone interview yesterday that this system could mean the knell of the private treaty system in New Zealand unless some way could be got round the situation where all wool would have to be sold through auction. Mr Dewe said he was fully in agreement that something had to be done to get wool moving again but he did not agree with the decision to lower the price at which the Wool Commission would buyin by 35 per cent to IBJc per lb.

“1 feel very strongly that the floor price in the auction should be abandoned completely,” said Mr Dewe If this was done New Zealand exporters would be able to compete with other countries. Impression Given But by setting a new floor price of 16|c per lb below which the commission would buy in, the impression was created in the minds of people overseas, quite incorrectly of course, that this was the price at which New Zea-

land hoped to sell its clip. This was exactly what had happened earlier in the year when the floor price had been lowered from 30c to 25c per lb. If the floor price was abandoned the market would find its natural level and the farmer could still be subsidised in much the same way as was suggested at present. The biggest wool merchant in the South Island, Mr R. G. Woodham, of Ashburton, said at the week-end that the action taken by the Wool Commission would remove all vestiges of competition from the auction system. It would mean the elimination of 85 to 90 per cent of all merchants’ business, which had amouhted to millions of pounds, and the laying off of at least 75 per cent of staff employed by, merchants.

Mr Woodham said that 85 per cent of the wool purchased by his business during the last 15 months had been sold to overseas interests and had earned overseas funds. Only At Auction “The main difficulty is that the Wool Commission Act only permits supplementation of price in respect" of wool sold at auction,” the chairman of the Wool Commission. Mr E. L. Greensmith, said when he was questioned about the problem facing private buyers. There was also the question of the practic-

ability of administration of any scheme in respect of sales other than at auction. According to the latest "Annual Review of the Sheep Industry,” issued by the Economic Service of the Meat and Wool Boards, out of 597.1 m lb of greasy wool sold in the 1966-67 season private sales accounted for 54.2 m lb. In the previous season private sales amounted to 74.3 m lb.