N.Z. wool prospects ‘sound’ for while

Press, 9 December 1985, Page 22

N.Z. wool prospects ‘sound’ for while

PA Wellington Trading prospects for New Zealand wool look sound for the next few months, says the New Zealand Council of Wool Exporters in its weekly review.

The council said crossbred sales were steady at present prices and that there was reason to believe this pattern would continue early next year. Prices at this week’s Napier and Dunedin sales would continue at the firm levels paid at Christchurch and Wellington last week, as exporters filled contracts for pre-Christmas shipments.

Late November, December and January normally were the peak wool selling months. So far this year, however, wool volumes were thought to be down about 19 per cent on the quantities rostered for sale. “While rostered quantities may have been set a little

optimistically, there does appear to have been a significant drop in wool production this season,” said the council’s executive manager, Mr Bill Carter. The effects of last year’s droughts, of several years falling fertiliser use, and an increase in slaughter of old ewes and ewe hoggets before the termination of the S.M.P. scheme were reasons for the drop, he said. “It seems inconceivable that wool production would fall more than 10 per cent in a year, so with a third of the season gone we expect auction offerings to return to normal after Christmas,” Mr Carter said. Overseas demand for New Zealand wool early in the season was weak but the production decline was a Godsend for the industry.

Exporters were reporting steady sales at present price levels, even though New Zealand wool was, on average, about 5 per cent

more expensive in American dollar terms than at the corresponding time last year. New Zealand wool was still more expensive than similar wool from Australia. New Zealand’s main wool markets were Britain, Western Europe, the Soviet Union, China, Iran, Japan, Australia and the United States.

United Kingdom and Western Europe customers normally entered into contracts with exporters several months in advance of delivery but mills at present were tending as far as possible to buy hand-to-mouth. Exporters were entering into contracts for August and September delivery of greasy and processed wool, as was normal for this time of the year, but a greater proportion of contracts for Western Europe purchases this season had been for shipment within the month.