Poor outlook for wool

Press, 7 August 1982, Page 19

Poor outlook for wool

PA Wellington Wool prices are likely to continue to fall in real terms during the next decade, according to the Reserve Bank. Synthetic fibres are likely to improve in quality and may also decline in price, the bank’s bulletin said.

"Disposing of the wool resulting from the recent build-up in sheep numbers producing coarse wool at an economic price may pose some problems," the bulletin said. ‘

Prices for coarse wools — which make up the bulk of the national clip — were expected to remain low relative to fine wool prices in the next 10 years. Another factor which could adversely affect demand for carpet wools was the increase in production of tufted wools, made mainly

from synthetic fibres. There had been a decline in production of woven carpets, which tend to be wool-rich.

Wool production in New Zealand in the 1982-83 year was forecast at 395,000 tonnes — 40.000 tonnes more than was sold to the trade in the last two seasons, said the bank.

“World consumption of wool at present is still below what it was in 1968-69 and, while the end of the current international - recession should bring increased consumption, it may still face severe cpmpetition from synthetics."

Economic growth in the advanced western countries between 1974 and 1980 had averaged four per cent, while world consumption of wool increased by 2.7 per cent a year.