Wool Decision “Understood”

Press, Volume CVIII, Issue 31676, 11 May 1968, Page 40

Wool Decision “Understood”

(N.Z. Press Association? WELLINGTON, May 10.

British and European wool centres he had visited had shown real readiness to understand the realistic view behind the Wool Commission’s decision to offer for sale wool out of its stockpile, the general manager of the commission (Mr H. L. M. Peirse) said yesterday.

“The announcement was made with the idea of helping them,” Mr Peirse Mid. “We have now given a strong indication of how much wool will be coining out of New Zealand in the coming season.” ' .

Mr Peirse was interviewed on his return from a month’s trip in which he visited wool centres in Britain, France and Germany after stopping in the United States. “Hard Talking**

He had had to do some hard talking in New York the morning after the Wool Com-, mission announced its decision to release, if possible, 1

100,000 bales of its stockpile in the early part of the coming season. He had met with more balanced views in Britain and on the Continent. “We felt that we could put in 100,000 bales before Christmas,” Mr Peirse said. “The decision was made that we were prepared to do this, but remember that we are not bound to do it” He repeated the commission’s assurances that it was ready, but only if the market was ready to take the increased stocks.

"We’ll be playing it by ear.”

Cheap Wool

On his impressions of his overseas trip, Mr Peirse said: "There has been no practical break in the elouds but nevertheless the people I spoke to felt that at today’s prices crossbred wool is very cheap indeed. "It is meeting competition and, given an increase in overell activity, there is no reason Why it shouldn’t pick Up.” The crucial factor in the

movement towards better demand for wool would be the continued wariness of people in the distributing chain. This could only be overcome by clear statements. Mr Peirse repeated previous statements that the wool market had “bottomed out.” Consumption in Britain, France, Germany and the United States was rising. “We still have to wait to see what happens at this end.” Door Open Mr Peirse said he had pointed out to wool merchants overseas that sales from the stockpile would be made at prices related to current auction values. The door was really just being left open against the possibility of this type of trading arrangement. Mr Peirse repeated that the Wool Commission had not at any stage had any formal and serious proposals for bulk purchase of part or all of the stockpile. “There have been reports that the Government has been approached, so the com-

mission is not going to restrict itself out of this form iff trading,” he said. “And when the merchants got this idea, they realised that they had been on the wrong track.” Mr Peirse said that all the speculation in the past had been part of the fact that wool was an international trading commodity.

“The market seems to thrive on this and it does seem the legitimate way of ferreting out the real situation. There is thus a need to to take great care that the people who matter get the real situation in clear terms. "This market sentiment is of immense importance,” he said.

“Prices are now back to where they were at the beginning of February,” said Mr Peirse. The general market sentiment for wool has gone down since devaluation, but it is extraordinarily difficult to tease out the effects of devaluation from all the other factors in the wool market.”