More overseas inquiry for wool reported

Press, 2 December 1985, Page 45

More overseas inquiry for wool reported

PA Wellington The wool market appears to be stabilising near present market levels and with greatly reduced Wool Board activity at auction, says the Council of Woo! Exporters in its weekly wool sale preview. It says its members have reported increased inquiry from overseas in the last week. Much of that strength in the market requires the filling of orders for shipment before Christmas against a background of uncertain wool weights on offer through December. .Already quantities for the first four December sales (covering both islands) have been revised sharply downwards, and indications are that further reductions are likely to offerings in the second round of December sales, just before Christmas. Thursday’s offering from Wanganui, Wellington and Auckland has been reduced from a two-day fixture to a single day, and in the next week the two-day Napier offering rostered for 55,000 bales has been reduced to 32,000. In that same week the Dunedin offering has been reduced from 20,000 to 13,000 bales. Some of this reduction relates to weather affecting shearing dates, but the main factor seems to be wool production much below early predictions. Official estimates put the

total clip between 7 and 8 per cent lower, but present indications are that this level was much too conservative. Mr Xavier Droolers at the export house of Masurel Fils counts this season as the worst deviation from official clip estimates. “Even with bales weighing 3 or 4 per cent heavier, we must be facing at least 10 per cent drop in the clip — the lowest production in six or seven years,” he said. The Wool Board has made further adjustments in intervention levels over the last two weeks, and the market indicator has eased slightly. Exporters have been buying to satisfy a fairly wide range of orders, in particular wool for China which at this time of the year requires good colour, sound wools for hand knitting yarns. These wools have tended to be a little firmer in auction price over the last week. Nevertheless, Chinese purchases to date would total between 8000 and 10,000 tonnes, only about half their level at this time last season. The exporters’ council’s executive manager, Mr Bill Carter, returned from China last week to comment that there will obviously be a strong, continuing demand for New Zealand wool in the rapidly expanding Chinese textile industry.

“While disparity in exchange rates have created ! major difficulties for their purchasing this year, given a return to “normal’ rates we should expect a rebuilding of our former export levels,” he said. “The Chinese are also looking to greatly expand their synthetic capacities. While I was in China they announced the building of seven large polyester and acrylic factories which will compete directly with wool and cotton in the apparel trade. “But wool continues to be recognised and sought by the Chinese as the premium fibre for a number of end uses, particularly carpets.” Substitute wools in targeted use areas are proving difficult for the Chinese to find in Australia, according to Australian trade sources. Australian prices for these types have risen sharply, which could narrow the gap between Australian and New Zealand market levels. Russia is back in the market, and over the last few weeks has been steadily placing orders with New Zealand exporters for shipment in January and February. West European carpet manufacturers are reported to be buying reasonably significant amounts for forward shipment next year. They seem to require a steady supply of crossbred as a basis for yarn blends,

and by buying forward are able to take advantage of forward exchange discounts. The Japanese had been exceptionally quiet, said Mr Peter Marshall of John Marshall and Company. He said their heavy buying last year had left them still holding stocks: “And with the United States dollar moving down 40 per cent in the last eight months, sales into the United States have been stifled. “European carpet manufacturers have also been constricted in the United States, as have Shetland wool manufacturers, though there have been some trade barriers put against their access. “The American dollar is creating flow-on patterns which are interesting to say the least, and current philosophy does not foresee a rapid strengthening of the United States economy in the next six months.” The slow inquiry for lambs’ wool is a disappoint- ■ ing feature of the New Zealand wool market This wool traditionally is sold into a number of specialist areas, particularly for Shetland knitwear and blankets. To date there has not been a great deal of inquiry for these wools. In “normal” seasons a substantial proportion would have already been sold, thus creating a firm under-pinning of the market.