Wool price recovery yet to peak — Board

Press, 2 May 1984, Page 26

Wool price recovery yet to peak — Board

Parliamentary reporter The Wool Board expects a stronger recovery in prices next season, possibly higher than the supplementary minimum price level. Prices have already surged ahead this season, showing an improvement of 20 per cent over last season’s levels. After inflation is taken into account, the cumulative average auction price, with 75 per cent of the 1983-84 clip sold, is more than 15 per cent higher than last season. The Wool Board’s economists believe that the lower stockpile of wool and a stronger overseas recovery than had been expected will push prices up even further next season. In the board’s latest monthly newsletter, the chairman, Mr D. McHraith, said he hoped that the

S.M.P. level of 320 c a kilogram could be “slightly exceeded” by market prices next season.

“Our economists view the outlook as quite promising,” he said.

The stockpile is expected to be down to about 120,000 bales when the selling season ends in June, compared with 285,000 bales at the start of the season. This would reduce the stockpile to its lowest since 1980, at a time when overseas demand has picked up significantly. “The board reports that stronger expansion has occurred in the United States, Britain, West Germany and Japan than was thought likely six months ago. The economic buoyancy is reflected in the continuing high level of New Zealand wool exports, according to the board’s economists.

Demand lifted in the last Srier of 1982-83 as the ted States economic recovery became firmly established.

“Whether this will be repeated in 1983-84 is the leading question, but certainly the major economic indicators suggest that there ought to be a continued finning in price over the next 12 months,” they say. Moreover, some countries have increased their purchases of New Zealand wool and total shipments for this season to February are still above the record level of a year ago, in spite of a drop in sales to China, a big buyer. While China has bought just over a half of its last season’s total, Russia, Iran, France and the United States have bought substantially more.