"Extra choice” for sale of wool

Press, 23 July 1976, Page 8

"Extra choice” for sale of wool

On Thursday and Friday of next week appraisers of the Wool Marketing Corporation will be valuing wool in Timaru and Christchurch offered to the corporation for purchase under its new "extra choice" scheme.

The Timaru wools will be valued on Thursday and the Christchurch wools on Friday. A.- the name indicates, the scheme offers growers another alternative for selling their wool to sale by auction, private selling or shipping their wool for sale in England. At present, however, it will be confined to only crutchings, second-shear wools and lambs wool. In total over the country these represent about 650,000 bales, but at the moment it is not known how much of this wool will be disposed of in this way, and clearly it may vary from season to season and" even within seasons. It is a type of private selling system, but it differs quite considerably from making a sale to a private wool merchant. The grower sends his wool into his broker or to a licensed private wool merchant or to the grower co-operative, the New Zealand Co-operative Wool Marketing Association. As his agents he must give these people authority to sell his woo! to the corporation, so long as they regard the price offered is fully equated with the most recent auction rates. For the wool to be offered in this way specifications for the wool also have to be forwarded in advance of the wool or with it. and corporation

spokesmen stress that unless there is the signed authority for the sale of the wool through the corporation and also the full specifications for the wool available they will not be prepared to do business. They are going to be very particular about this. A separate authority is required for each delivery cf wool for sale in this way.

The corporation has set down a series of dates through the season on which wool offered under the scheme will be valued in each wool selling centre. These are partly co-ordi-nated with auction sales. In Christchurch and Timaru in the 11 months from the end of July these will fall at between two and four weeks intervals — there will be 17 such occasions in Christchurch and 16 in Timaru.

In Christchurch the wool will be seen in the stores of each of the brokers, at the two wool scours and in each centre the private merchants and the New Zealand Co-operative Wool Marketing Association will display wools sent to them under the scheme in a common centre, which is up to normal woolstore standards for the display of wool.

The corporation will be basing its offers for this wool on the most recent market rates using the most recent wool sales. It will also have access to market information from overseas primary markets, and while it is still holding stock wools and is receiving offers for it it should be in a good position to assess the market accurately, even where there is a gap between sales. Normally by 5 p.m. on the day on which the wool is valued the corporation should have advised the agent for the wool of its offer, and the agent acting

for the grower and in consultation with him has until midday the following day to accept the corporation’s offer or not. One of the attractions of the system is that within 10 working days after acceptance of the corporation’s'offer payment will be made to the agent for it.

value this wool so it is likeiv that there will be some expansion of both secretarial and appraising staff.

At the moment no-one really knows how much interest there will be in the scheme. At the start of the new season with prices having recently been at high levels it is expected that interest will not be very marked. At the beginning of this week Christchurch brokers had only 94 bales from' clients for offering to the corporation. When prices are high and markets rising growers may be less inclined to offer their wool to the corporation. They may prefer to go after a higher price. But when prices are low and falling ther“e could be a lot more interest in the scheme. If growers can get their money earlier in such circumstances they will' reduce their overdraft, if they have one, earlier and save themselves some interest.

In the peak of the season where wool might be shut out of an auction because of the weight of wools coming forward use of the extra choice scheme couid also lead to much earlier realisation. It could be expected that there would be most interest in the scheme in those areas where private selling is most frequently done. In the South Island this is in Invercargill and to a lesser extent in Timaru. But interest in this scheme may not necessarily follow private buying patterns. Here the grower will not be sticking out his neck so much in making a sale to the corporation, as he is assured that the price offered is market related, and as well he will be able to call on his agent to advise him as to the validity of the price be is being offered, and this may persuade more to give the scheme a try. For the corporation’s staff it is going to mean much more travelling to

Where the wool would normally have been sold by auction the corporation will also sell it through auction being committed tb maintain auction offering figures But where wool would have been sold privately in any case it may aiso sell it privately. The scheme may make itj possible to spread offerings! at auction more evenly so! assisting woolstores ’ to make better use of space and labour and it could also help to strengthen the market. Although private buyers may regard it as another competitive element in their field, it could also offer them a convenient outlet for wool at times when markets are weak and they would prefer not to handle any wool at all but have a wish to maintain business contacts with grower clients. To acquaint interested parties with the scheme the cotporation has been holding meetings with brokers and stock agents, who are in close contact with farmers, wool scourers and private merchants. Corporation staff taking part have included Mr A. W. Patterson, operations manager, Mr R. E. W. Buchanan, deputy operations manager, Mr R. Jaray, projects manager, and in the South Island the corporation team has had with it the South island supervising appraiser, Mr! S. P Street. The dates on which wool; offered for sale under the! extra choice scheme will be valued in Christchurch; and Timaru are:

Christchurch: .July 30, August 26, September 14 and 30, October 15, November 3 and 18, December 3 and 21, January 17-19, February 8 and 24, March 16 and 31, April 27, May 19 and June 17.

Timaru: July 29, August 23, September 14, October 1, 15 and 29, November 23, December 8 and 21, January 26. February’ 11, March 11 and 31, April 22, May 25 and June 21.