Wool at special sale expected to sell well

Press, 21 July 1986, Page 6

Wool at special sale expected to sell well

PA Wellington Wool on offer at the special off-season wool sale on July 24 should meet a ready demand, according to the Council of Wool Exporters. In a market preview the council said exporters would be buying to maintain throughput at their scours and mills. They would also be seeking to cover shipments to China and Eastern Europe during August . Mr John Botting, of Ca-valier-Elco, Auckland, said there were normally no wool auctions during July. However, an unusually high carry-over of wools from last season and severe financial pressures on growers had prompted the Wool Auction Sale Committee to hold a sale on July 24 rather than August 8. “Shifting the sale two weeks earlier will have no effect on the market on

this occasion,” said Mr Botting.

“Exporters who would have bought their wool on August 8 will now purchase on July 24 and growers and brokers will get paid a fortnight earlier.

“It is our expectation that demand will be fully firm on the last sale Of the season.”

Some other exporters see the change as somewhat. risky an apprehension based on the fact that Western Europe, the destination of 40 per cent of New Zealand wool and a major price-setting market, is on holiday during July.

“These exporters are concerned that if prices at an off-season sale differ greatly from recent trends this could undercut the opening sale of the new season on August 28,” said Mr Patrick Desbonnets, acting president of

the council. “This is why wool exporters traditionally have been reluctant to see a New Zealand sale held in isolation from, market demand and from sales in other grower countries. "Unexpectedly high or low prices could make overseas markets very stand-offish. The last thing you want at the opening sale is a wait and see attitude.”

With a healthy offering of 22,000 bales covering a range of wool types, the council’s general manager, Mr Bill Carter, does not believe that anything untoward will happen at the special sale. He also pointed to steady interest In New Zealand wools from China, Eastern Europe and South-East Asia, a point which was reinforced by Mr Botting who said demand from Western Europe had been so

weak in recent monins that it did not really matter whether they were on holiday or not “As a council, we recognise that this is something of a freak year,” said Mr Carter.

“While we believe that there are sound marketing reasons for planning the wool action year well in advance, it appears that the market is strong enough to stand a little juggling in sale dates.

“The latest statistics from the Meat and Wool Boards economic: service show that sheep numbers are at a record high, even though ewe numbers are sharply reduced. This is a result of the late lamb killing season and the large numbers of lambs held over for live shipment to the Middle East,” said Mr Carter.

“When you add the wool from these sheep to the unusually high'carryover from last season, you get quite strong pressure from, growers for an early sale.”

Nr Desbonnets said he expected demand from South-East Asia and China to remain firm during coming months, with the only cloud on the horizon being the continuing slide in the Australian dollar. “There is so much demand and so many forward orders in the pipeline that currency will have very little effect on the July 24 sale. But once the new season begins, the relative values of the Australian and Kiwi dollars will have a very big bearing on the price of our fine wools in particular. “Even at the moment, we are selling wools of 32 microns and- finer at a premium onsimilat Australian wools. One wonders how long that can last”