British concern that wool might drop

Press, Volume CXIII, Issue 33158, 23 February 1973, Page 3

British concern that wool might drop

(N.Z P.A. Staff Correspondent) LONDON, February 22. Manufacturers of woollen products in Britain are bracing i themselves with some apprehension for a probable fall in the price of raw wool.

In Bradford this week, manufacturers’ repre- . sentatives warned that a ; sudden drop in the price of wool could force a ; number of firms out of business. 1 “We sell forward,” said MrMichael Garnett, chairman and managing-director of George Garnett and Sons, i Ltd. “Our orders are six to .{eight months, or even up to a [[year in advance. We have to ■[commit ourselves forward at .•the current market level. f! “If in the meantime wool .changes price drastically, these buyers will find 1001 [lreasons not to take the pro- , ducts they have ordered.” More synthetics r As the young head of a •; family concern founded in the early"nineteenth century, Mr i! Garnett, who is married to a •[New Zealander, naturally ■[wishes to remain in wool. But - he insists that prices are

, forcing him, along with other I; , manufacturers, to rely more ; and more on materials I I blended with synthetics. i : “We have to pass on any; . increases in price,” he said. “We must convince our buyers that an increase is justifiable and must be passed on. ■ “Many buyers accept that i prices are increasing, but f they say they can’t pass on , the tremendous increases we > have seen lately all in one! i season. So they ask what; > we can show them in a II cheaper synthetic blend. ! j Other factors 1 ; “We will make quite sure; ‘{that this (northern) spring we! have a far greater proportion of materials with synthetic [content that we can pass onj to our buyers.” 1 Mr Michael Roberts, a for-! i inter president of the British! •[Wool Federation, said the in-1 Hdustry did not want “short-; ■'•term bonanzas that turn into! t[ long-term frustration.” -[ “At the moment we fear;

[for the industry,” he said. I British textile manufacture [ ers have been going through, > [by their standards, something; [of a boom period lately, but! • the effect of high wool prices! [is beginning to make itself! .felt. ; The Department of Trade [and Industry has just approved an industry price rise [application expected to in- ! crease immediately the price [of a man’s suit about 4 to 5 •per cent, but the public is not • expected to feel the full brunt [before September. j Mr Roberts, who is in the [wool tops business, said that [price controls could make [business extremely hard for! [British manufacturers in the; [coming months. Other factors the manu- [ facturers face are tighter [credit controls and higher • interest rates, and the prospect of industrial troubles over an expected hefty wage claim, which will consider-

ably exceed the limits under the Government’s present wages policy. Changes forecast Mr Roberts does not expect a sudden, rapid drop in the price of raw wool, although he fears that any) further increase could lead to such a situation. But he does see changes in world buying patterns, with ( Communist countries taking a greater proportion of the ( world clip and wool products] becoming a premium or] (luxury product in the Western hemisphere. He said that because Corhimunist countries tended to consider raw materials in terms of the employment they generated rather than their monetary value, wool would find a market there. Recent indications of reduced wool production in Russia meant the demand from that (quarter was likely to be J sustained, and possibly increased. Mr Roberts also indicated

that Japan would continue to (buy, particularly in view of [its improved competitive (position after recent move(ments in world currencies, (but he warned against Australia’s dependence on this market. Carpets, too •The high price of wool is also having a similar effect on the carpet industry, and the director of the Federa tion of British Carpet Manufacturers (Mr Geoff Davidson) said yesterday that : whether to “stick with wool” was becoming a major pre- ■ occupation of many of his members. “It looks like the carpet made from wool will become the cream on top of the ■ milk,” he said. “The rest of the market will just have to ;(settle for plain old milk.” :( The “plain old milk” is I synthetics.