U.S. carpet-wool sales hit by high prices

Press, Volume CXII, Issue 33065, 4 November 1972, Page 3

U.S. carpet-wool sales hit by high prices

(N.Z.P.A. Staff Correspondent) WASHINGTON, November 3. New Zealand’s failure to establish a means of stabilising the prices of its carpet wools has created doubts about the levels of future sales to the United States.

The managing director of the Internationa] Wool Secretariat’s American office (Mr F. J. Colangelo) said in New York that carpet manufacturers were no longer buying wool.

It appears that the wool-carpet industry is going into the market place next January with no new lines to offer potential buyers, simply because it believes the new level of prices makes it uncompetitive. “We are facing one of the| worst periods in our history.' Last year, the industry dis-' played 38 or 40 new lines at! the Chicago carpet fair,) traditionally the fair which 1 sets the buying tone for the coming year,” said Mr Colangelo. “But when it opens in January there will be no new! lines presented by the wool-! carpet makers. “There has been a veryj negative response by the'

i carpet trade to the high auction prices.” Reviewing activity in the I United States industry in the last year, Mr Colangelo said that after the sketchy demand that had been apparent even while low prices' prevailed last year, wool-carpet production began to leap ahead early in the year. “No buying” During the first quarter of the year it was 34 per cent ahead of production for the ! first three months of 1971. The increase had fallen to 17 per cent by the end of June and was likely to be down to about 12 per cent at the end of the third quarter. “And now there is just no buying,” | he added. “We had turned around into a period of great demand,

land everyone was looking forward to a very good year. But now people have begun to retrench. In future, we are going to have sell confidence as often as we promote the qualities of wool. “It’s a two-way street: the producer needs price stability so that he can confidently expand production, and the manufacturer needs it so that he can effectively plan his future production schedules and marketing programmes,” said Mr Colangelo. “The industry and the producer have got to come closer together; stability can be beneficial to both. Cost estimates “The big problem is that manufacturers show products and estimate costs to buyers on the basis of prevailing

wool prices. But when these go up they either have to absorb the rises or pass them on to the consumer. “A further problem now is the activities of the Price Commission which make it difficult for extra costs to be passed on.” Mr Colangelo said that the secretariat had urged woolmark licensees to “have faith,” and added that New Zealand was finding better ways of marketing wool. “A lot of our friends found comfort in this. In the present instance they are saying why isn’t something being done on prices.” . Synthetic fibres He added that a number of American manufacturers were looking for a similar arrangement to that they could obtain with synthetic fibre producers — arrangements covering fixed prices and qualities. Mr Colangelo predicted that if consumption continued to decline in the United States, wool would have a more difficult job than ever before in climbing back to its former market position. The reason was that a greater range of synthetic fibres was now available to manufacturers. In addition to acrylic and polyester fibres, there was an improved nylon fibre, antron, available.