The Press THURSDAY, APRIL 18, 1968. Bradford And The Wool Commission

Press, Volume CVIII, Issue 31657, 18 April 1968, Page 8

The Press THURSDAY, APRIL 18, 1968. Bradford And The Wool Commission

Much of the criticism of the New Zealand Wool Commission since its latest decision was announced is answered in one of the trade’s own journals, the “Wool Record”, published in Bradford. The commission announced on April 3 that it would offer at market rates some of its stockpile of 700,000 bales of wool. This statement was later clarified to mean that the commission was prepared to sell up to 100,000 bales before Christmas below cost; but the commission has not at any stage defined “market rates” nor committed itself to selling 100,000 bales—or even 100 bales—if it considered the market rates too low at the time the wool was offered.

On the day of the commission's announcement, prices of medium and strong crossbred wools—which form the bulk of the commission’s stockpile —fell 5 per cent at the Wanganui sale; they fell a further 5 per cent at the Dunedin sale two days later; and the market generally has remained weak at subsequent sales. Growers and buyers alike have attributed this decline to the commission’s announcement and have criticised it as badly timed. These complaints may be warranted, even if some of the criticism came from traders who stood to lose from a break in the market at that stage. It is still reasonable to ask why the commission could not have waited until nearer the end of the season before announcing its policy for 1968-69 although the scheduling of shipping would have necessitated an announcement by May, or June at the latest Perhaps the commission wanted its policy known before the International Wool Secretariat’s mission to Russia left Moscow that week, or before the commission’s general manager returned from his present overseas visit Had the commission decided not to disclose its 1968-69 policy at once it would have exposed itself to the reproach of prolonging uncertainty in the market and thereby encouraging speculation. Any such secret is necessarily hard to keep; and the criticism the commission has had to face so far would be mild compared with that likely to be provoked by a leakage of news about its intentions. But if the announcement was an “ unsurprising “ notice ”, as the “ Wool Record ” described it, why should it have had such a pronounced effect on auction prices? If auction prices are in fact as sensitive as this would suggest, is this not a criticism of the auction system rather than of the commission? This is not the inference drawn by supporters of the auction system, but critics of the commission—most of whom favour the auction system—should be careful lest their arguments are turned against them.