Poor wool market

Press, 1 April 1981, Page 16

Poor wool market

PA Wellington The Wool Board has bought more than 20 per cent of all wool auctioned this selling season because of a limited demand from overseas buyers and inadequate prices. The board has stockpiled almost 300.000 bales, which it has bought at a cost of about $9O million. It still has over $l6O million available to purchase wool at coming auctions. The managing director of the board, Mr H. L. M. Peirse, said it was capable of buying all the remaining 500.000 bales rostered to be sold for the season. “I would not be surprised •if we did buy them all,” he said. The situation is approach-

ing that, of 1966 and 1967 when the board’s predecessor, the Wool Commission, stockpiled 706,000 bales weighing 100,000 tonnes. In spite of the criticism at the time, the wool was sold during the next few years at favourable prices. More than 90 per cent of the stockpiled wool was sold in its original state through auction in New Zealand. Storage was a problem and the commission had to use social halls, old picture theatres, drill halls, and railway goods sheds. Officers of the board were again looking for storage throughout New Zealand. Mr Peirse said wool stores were almost full but there was plenty of other storage available “at a price.”

He said that because the market fluctuated so much, it was hard to say when the wool might be sold. However, the board had stored wool for up to five years in the past. In this case, he envisaged a pickup in the market next year and possibly by the end of this year. The main reason behind the stockpiling was .record levels of wool production over the last three seasons, Mr Peirse said. This was a result of farmer confidence, good growing seasons, and Government incentives.

Unfortunately, the boom coincided with a price decrease of almost 10 per cent on last year's price and a lack of demand in the main market countries.