Optimism over future of N.Z. wool

Press, 1 May 1981, Page 17

Optimism over future of N.Z. wool

The managing director of ’no International Wool Secretariat. Dr Gerald Laxcr. is confident that wool prices are going to move upwards again soon and that in real terms in the longer' term they are going to be as good as those obtained in 1979-80 and perhaps slightly better. The secretariat is setting out to see that this indeed happens. In Christchurch this week for the fiftieth conference of the International Wool Textile Organisation Dr Laxer said that in the secretariat they had done a very hardnosed assessment of the present situation and also looked ahead by about six years taking into account all the threats and opportunities that would present themselves to wool in that period. “We firmly believe that over the long haul wool prices will be maintained or slightly increased in real terms - that is taking 197980 prices as the base. "The fact that New Zealand wool prices are down at present is a temporarv situation."

Even with the increase in production that there had been in New Zealand, the fact that about as much wool had been sold to the trade this season as last season was good in the present marketing situation. "I think that prices will turn around in a year or two.”

Dr Laxer then proceeded to give his reasons for believing that there were going to be brighter days for crossbred wool again. The secretariat had developed a whole new group of strategies that would deal with the increased supply of stronger wools in New Zealand. he said. More resources would be allocated to stimulate the demand for these wools in end products such as carpets, home furnishings, knitwear and special products like protective clothing and uniforms.

The efforts would be directed at markets which . had not been particularly good — the United States in particular — and also many . of the major markets of ■ Western Europe. Also contributing to extra

demand would be the greater take-up of wool and use domestically in countries of Eastern Europe and China. New technologies were also going to make New Zealand crossbred wools more attractive for production and also in the end products. These developments would include yarn felting for carpets, printing technologies, flame-resist systems and novel yarns, and perhaps most important of all the secretariat was now planning to increase the amount of effort that was put into getting these technologies into widespread use by the wool textile manufacturing industry and the tufted carpet industry throughout the world.

So it w’as possible, in spite of the slightly gloomy outlook at present, to have a “realistic optimism” based on good evidence and hardnosed forecasting, including that of the economies of the major wool consuming countries.

This was all part of the secretariat's strategic plan and goals for the next five or six years. He believed it was a realistic plan with achievable goals.

Has the secretariat the resources to carry out this

plan? Dr Laxcr believes that they will have if they can maintain about the present level of purchasing power over the next five or six years. Because of inflation that would mean that the secretariat would require more dollars. Today Dr Laxer said he believed that the secretariat was about as lean and as cost-effective an organisation as it had ever been in its history. With the board's authority he had just totally restructured the organisation and in the course of doing so had reduced the payroll by 10 per cent. Most of these cuts had taken place in Western Europe and werecarried out so that the secretariat could retain its cost efficiency and have the necessary thrust. So if growers would maintain the secretariat's purchasing power the organisation because of its structure, leanness and professionalism would be able to achieve the goals that he had mentioned.

The staff had been involved in determining these goals and believed that they could be reached.

He hoped that both the growers and the New Zealand Government would understand this position. It was something that he believed the Government should give careful attention to. It was the Government’s policy to encourage increases in rural production and this had had a decided effect on wool supplies. He believed that it was important now for the Government to be aware that something had to be done to see that there was a demand for these extra supplies, which would return viable prices.

As well as Australia, New Zealand and South Africa, the secretariat also includes Uruguay.