Wool processors question scheme

Press, Volume CXII, Issue 32974, 21 July 1972, Page 2

Wool processors question scheme

(.V«c Zealand Press Association)

WELLINGTON, July 20.

Although one of the objects for the wool corporation was “marketing New Zealand wool to the best advantage in competition with other textile fibres” there seemed nothing in the Wool Marketing Corporation Bill to indicate how this would be done, said submissions from the New Zealand Textile and Woollen Mills' Association and the Carpet Manufacturers’ Association today.

Giving evidence before the Parliamentary Select Committee examining the bill, the associations said the bill gave no indication whether New Zealand wool processers making wool tops, yarn, or knitted or woven apparel, or carpets, would pay the acquisition price or the world price.

If New Zealand processors were to pay the acquisition price, and this was higher than the world price, would there be any means of compensating a New Zealand manufacturer for the difference between the higher price he had to pay and the world price his overseas competitors paid?

The associations also asked that if the corporation fixed the selling price in New Zealand, would a New Zealand processer be able to buy the classes of wool he needed nt any time, and draw from wool stored in New Zealand. It was also asked whether New Zealand mills would still be able to import freely the special classes of wool they needed. Expenses feared Mr G. E. Pearce, managing director of Feltex (N.Z.), Ltd, said that the corporation would not be able to raise the world price of wool, but its administration expenses would cut into fanners’ returns. “There is not enough crossbred wool in New Zealand to have an effect on world markets. The price could increase only if all crossbred growers throughout the world agreed to the same principle and worked together,” he said. Mr W. Melhuish, a spokesman for the Freezing Companies’ Association, said that from discussions with the establishment company it appeared that slipe wool would be bought from the freezing companies by the corporation and then sold back to the companies for marketing. “That is why we say the corporation would only be a body interposing itself into the existing system," Mr Melhuish said.

At present, while the freez-. ing companies owned the I

wool, any improvement in preparation was reflected in the schedule price offered by the company that made the improvements. If ownership passed to the corporation, the freezing workers would lose interest.

Mr A. W. Chapman, another spokesman for the association said that at present slipe examination was done by experts who could relate their judgment to the balance of wool produced. Farmers also had the opportunity to send animals to several works to determine which was giving the best return.

The freezing companies gave about slm a year *or scientific investigation and product development each year; much of this went towards slipe wool. Urgency seen Earlier, the chairman of the Wool Marketing Corporation Establishment Company (Mr H. P. Ralph) said that New Zealand would be “inviting trouble” if the necessary legislation was not passed this year and the corporation established. “Any delay would allow other wool-producing countries, such as South Africa and Australia, both of which are setting up corporations, to get ahead of us.” Mr Ralph said New Zealand’s plans at present meant the country was not behind. “South Africa is probably ahead of us by a few weeks or months, but that is all,” he said.

The price the corporation would pay to growers would be related as closely as possible to the actual realisation price for the wool.

“There will be no softcushioning by the corporation in the expectation of paying a lower price which could be adjusted at the end of the season. The price setting will be a sophisticated exercise, it will take a great deal of work, but it will not be difficult.” This would put farmers in a better position because the price would not be changed,

unless it was increased during a season, and in that case the adjustment would be retrospective. “Over-all, the corporation i will be self-balancing and any loss in a season must be balanced the following season. Farmers must realise this,” said Mr Ralph. Mr G. A. Walsh (Nat., Tauranga) said that the corporation would be an “absolute monopoly” but this was modified by Mr Ralph. “This will be a co-opera-tive rather than a monopoly ” he said.