Wool Board was de facto banker —Mr Mcllraith

Press, 19 June 1986, Page 30

Wool Board was de facto banker —Mr Mcllraith

PA Wellington The Wool Board had become the “de facto banker” to the wool trade in a volatile and uncertain season, said the board’s chairman, Mr Doug Mcllraith. Mr Mcllraith, in a speech to the International Wool Textile Organisation in Belgium, said the 1985-1986 season had been the most difficult and disturbing experienced by wool growers in a long time. The problems — a combination of the aftermath of last season’s drought and the Government’s firm monetary policy — meant wool production was likely to decline to its lowest level in seven years. Wool prices on average were nearly 10 per cent lower than last season. "We (the Wool Board) seem to have become the de facto banker to the trade, holding stocks at a time when most others in the industry are reluctant to operate beyond a hand-to-mouth existence,” Mr Mcllraith said. “In such an environ-

ment, we have been able to spread the supply of wool to the trade and maintain a bridge across the chasm.”

The board’s strong presence in the market meant that its stocks had increased by just under 40,000 bales, peaking at 170,000 and reducing to 136,230 bales at the end of May, he said. “These figures do, however, disguise the very high turnover in our stocks that has occurred.” Mr Mcllraith said the board had its highest turnover of new-clip stocks for many seasons, with total sales reaching almost 109,000 bales, “reflecting the banker role to the trade we are now playing.” The one bright light on the horizon was that with sheep-meat returns at only 50 per cent of those of last season, farmers were looking to wool as their No. 1 priority this season.

“Wool is making an increasingly significant contribution to most sheepfarm incomes, estimated to be 41 per cent of their

total income,” he said. In export markets, there had been a notable drop in exports to two of New Zealand’s most important wool customers, China and Japan.

“Other notable decreases were seen in Belgium, Italy and France,” he said.

“But while exports to most of our destinations have declined this season, there have also been some significant increases — most notable being the 58 per cent increase to the Soviet Union, which now stands as our No. 2 customer in terms of quantity this season.”

The challenges of the last year had also highlighted the need for greater input into global marketing strategy and research and development programmes.

“It is a golden rule of marketing that in times of pressure, research and development should always be maintained to ensure market leadership — and it is a rule that we at the board take very seriously,” he said.