Widespread markets for N.Z. wool

Press, 21 October 1983, Page 29

Widespread markets for N.Z. wool

While the United Kingdom, China. Japan and the Soviet Union dominate our wool export markets, New Zealand is well served by a broad spread of demand over more than 50 countries, the president of the Council of Wool Exporters, Mr Michael Moss, has said. He was speaking after the recent conference of the organisation, where its name was changed from the New Zealand Wool Buyers’ Association.

Wool exporters could take great satisfaction at the recovery in the important Iranian market where they had more than doubled sales to a record level . last season, he said. The drop in the previous year’s total had been caused by economic stringencies in Iran.

“If some 5000 tonnes of wool that we exported to Pakistan for processing before re-exporting to Iran is added to the 16,000 tonnes we shipped direct to Iran, the total is a record,” Mr Moss said. “We should, however recognise that some of this represents restocking, but nevertheless we can take great satisfaction from having rebuilt that market after the problems of the previous year in which

many of our members lost heavily on contracts that were frustrated by the inability of Iranian importers to obtain foreign currency.

“Very few people outside the wool industry appreciate the problems of exporting to a country where there is such a long and complicated delay between our establishment of a sale contract to supply at a fixed price at a future date and their issuing of letters of credit to pay for the wool. In many cases the wool stocks must be bought and processed and held in expectation of the contract being honoured by due date and enabling the wools to be shipped. If the letter of credit does not arrive in time, the exporter is holding expensive processed stock which is eating its head off in interest charges and for which another market must then be found,” he said. “New Zealand is fortunate that our wool markets are spread over so many countries. Our wool exporters are selling into more than 50 different markets and are servicing them directly or through their own agents employed in these countries. Over recent years we have seen the changing patterns of de-

mand as a slackening in one country has been matched by a lift in another.

“Our total exports have increased in each of the last three years and in the season just ended we, in fact, exported some 12 per cent more than was produced. “The Wool Board stockpile which built up as sheep numbers were increased dramatically is now being built up as sheep numbers were increased dramatically is now being reduced with equal rapidity and with sheep numbers now slightly lower than they were a year ago, we can expect to see a further demand for those remaining stock wools if we are to fully service our overseas markets.

“A broad spread of markets serves us well and in many cases the smaller developing markets are those which can stimulate an improvement in prices. We should never lose sight of the importance of these smaller markets for the competition they provide, even though individual shipments may not be large and may involve, at times, more expensive shipping or special trading facilities,” Mr Moss said.