Poor wool preparation costing growers dearly

Press, 21 April 1986, Page 15

Poor wool preparation costing growers dearly

PA Wellington Many farmers are missing record prices because of poor wool preparation at shearing, the Council of Wool Exporters says in its weekly market preview. For farmers with wool of good style and colour, 20 seconds spent preparing each fleece could mean a price difference of as much as 40 or 50c a kilogram. The council’s executive manager, Mr Bill Carter, says the present auction market is heavily influenced by the varying availability of good style wool, pressure from New Zealand mills and the demand for specialist wool for export sales. Over all, however, world demand for wool is relatively quiet, and average prices at auction are being bolstered by the limited quantities of good wool available during the final eight weeks of the season, says the report.

At this week’s auctions in Christchurch there will be much exporter interest in a release of some preChristmas shorn Dunedin wool of good style and colour from the Wool Board stockpile. Currency continues to dominate the thinking of most exporters, especially during a time of commodity recession when auction prices are being kept above prevailing world levels by a floor price system. Throughout the

season, exporters specialising in the finer end of the crossbred clip have seen their Australian competitors beat them time after time, Mr Carter says.

Mr Charles Hall, of J. S. Brooksbank and Company, of Wellington, says he lost a 150-tonne contract to Australian competitors last week because his ability to supply was broken by a strong New Zealand dollar and a weak Australian dollar. Exporters who have invested heavily in the further processing of New Zealand wool are far from happy. In recent years the proportion of the clip that has been scoured, carded and spun before export has increased dramatically. This season, however, in spite of a further increase in manufacturing capacity, this proportion will not have grown as much as the investment would have warranted. For most of the season, our competitors overseas have had access to cheaper raw wool, says one exporter.

“While we have imported some wool from overseas, we still have to pay to get it here, which still leaves us behind. “If the dollar and interest rates stay anywhere near they have been this year, the only investment we will make in further processing in the future

will be offshore. There is no alternative.” For some exporters with big processing capacity, lower world prices for yarn have been offset by the efficiency of their factories. Some of these plants are working round the clock.

Exporters see big opportunities for expanding sales of processed and semi-processed New Zealand wool in the years ahead. But the successful development of these markets will depend on the relative costs of alternative sources of raw wool supply, Mr Carter says.

The limited quantities of better-style carpet wool and blanket wool available in New Zealand are finding steady interest round the world, especially from China.

At the middle of the market — for BC wool of medium style and colour — the Soviet Union is buying steadily, a factor in the increase in price of this type of wool at the Dunedin sale on April 17.

At the bottom of the market, there is virtually no international demand for poorer style wool of poor colour, says the report. Some of this wool is being bought by the Wool Board and stockpiled. Mr Peter Marshall, of John Marshall and Company, Christchurch, re-

ports some sales of scoured carpet wools to Japan, not large quantities, but nevertheless significant because of Japan’s virtual absence from the market for the last six months.

This lack of demand from Japan and the problems faced by Iran, formerly a large customer of scoured carpet wool, has reduced demand for scoured wool this season. Positive indicators of long-term market prospects are hard to find. But, Mr Marshall says, he has been heartened by the number of specialist wool carpet manufacturers that have set up business in the United States during the last year or two. “These manufacturers are quite different from the traditional American carpet manufacturer who has switched from wool to synthetics with every fashion whim,” he says. “They have confidence in wool and see a permanent place for woollen carpets in the marketplace. They have been consistent purchasers of New Zealand wool during recent months and we expect them to build on this base in the coming year.”