Better outlook for wool

Press, 19 August 1983, Page 19

Better outlook for wool

Wool exports may continue at the higher levels reached in 1982-83 according to the Economics Division of the Ministry of Agriculture and Fisheries.

Reviewing the current situation of the wool industry, the division said business confidence appeared to have improved in several countries.

Activity in the world textile industry in general did not appear to have benefited yet from higher business confidence levels.

“However, there are signs that interest in retail sales has picked up in some countries and may soon be reflected back through wool processing pipelines,” the division said.

Such signs were most evident in the United States, West Germany and Britain.

“With stocks in manufacturing countries still at low levels, any wool used for processing will have to be replaced. An increase in wool consumption should, therefore, be quicky reflected in a greater demand for raw wool.”

The division predicted New Zealand wool prices at auction would average close to the supplementary minimum price in the 1983-84 season.

This was because of the higher levels of exports expected and less coarse wool available due to lower production and lower stocks held in producing countries.

The S.M.P. for wool in 1983-84 has been set at 320 c per kg greasy, unchanged -from the previous season. The average price for wool sold at auction is forecast to rise to 315 to 320 c per kg — a rise of about 11 per cent on prices achieved at auction in the last months of the 1982-83 season.

Wool production in the

1983-84 season is expected to drop somewhat, largely because of the lagged effect of the widespread drought last season.

Sheep numbers at June 1983 were estimated to have been about the same as a year ago, at about 70.3 million.

“Production per head is expected to fall to 5.16 kg on average, so that total production this season (1983-84) should be about 363,000 tonnes — the same as in 1981-82,” the division said.

Production is also expected to decline in Australia, again because of last season’s weather and because of reduced sheep numbers.

“The Wool Board’s minimum price scheme is estimated to have cost about $32 million during the 1982-83 season. During the same period about $lO million was collected at minimum price funding levels to finance the board’s minimum price scheme.”

The total cost of the S.M.P. scheme in 1982-83 was estimated to be about $176 million, of which about $144 million (82 per cent) was paid in the first eight months of the season.