Dollar strength hits wool exports

Press, 8 February 1986, Page 30

Dollar strength hits wool exports

The continued strength of the dollar and lower wool production levels limited the value and quantity of wool exports in the last half of 1985, the Wool Board said.

Wool exports, at 104,000 clean equivalent tonnes, were down 7 per cent compared with the same period last season. Export earnings from wool, however, were not so badly affected. The total value of wool exports for the six months was $534 million (f.0.b.), 3 per cent below 1984-5 levels in spite of predictions that lower auction prices would seriously affect values.

The pattern of export figures largely reflected the currency relativities of other countries to the United States and New Zealand dollars. Some increases resulted in markets where exchange rates were relatively favourable, the Board said. Increased exports of wool were achieved to Britain, up 11 per cent to

17,300 clean equivalent tonnes; to the Soviet Union, up 37 per cent to 9500 tonnes; and to West Germany, up 14 per cent to 7900 tonnes.

Increased exports to smaller markets such as Greece, Hong Kong, and South Korea were achieved also.

During the period, the weakness of the Australian dollar gave some Australian wools a price advantage over comparable New Zealand types. This, coupled with the continued strength of the New Zealand dollar, led to decreases in some leading markets. Exports to Japan, the top customer last season, were down 24 per cent to 11,000 clean equivalent tonnes; China, third last season, fell 13 per cent to 8900 tonnes; Italy, .down 16 per cent to 4700 tonnes; the United States down 15 per cent to 4900 tonnes; and the Netherlands, down 16 per cent to 4400 tonnes.

Exports of greasy wool

reflect the lower production levels this season with a large drop, down 24 per cent, in tonnage to 38,500 tonnes, and down 26 per cent in value to $l4B million (f.0.b.).

In comparison, added value scoured wool exports held up. They increased 7 . per cent in value to $339 million. Scoured wool made up 63 per cent of total wool export value.

“In spite of the continuing decline in exports so far this season, trends would seem to indicate that, even, in many of the markets most affected by the strength of our dollar, there is a firm demand for our wool,” said the board’s managing director, Mr B. K. Knowles.

“With that level of international demand, it is extremely unfortunate that the situation in regard to our dollar has restricted the export returns from wool for New Zealand.”