Wool minimum maintained

Press, 25 July 1986, Page 14

Wool minimum maintained

The average minimum price for wool has been maintained for the 198687 season with some changes in relativities between wool types reflecting market conditions,- the Wool Board has announced.

Although price relativities between fine and coarse wools have been narrowed, reductions in fine Merino wool minimums have been balanced with increases in coarse crossbred minimum prices, leaving the over-all average minimum price at 443 cents per kilogram clean (330 cents greasy). The board’s chairman, Mr Doug Mcllraith, said the narrowing of relativities reflected prevailing market prices, with the increase in coarse wool minimums, especially for second shear wools, possible because of the continuing strong international demand for these

He warned that currency fluctuations and other factors in the forthcoming season could force the board to seek approval from the Minister of Agriculture to alter minimum prices during the season, under the “exceptional circumstances” clause.

“Over the last season we have seen the dramatic impact currency movements can have on overall wool price levels, particularly on the relative prices for individual types,” Mr Mcllraith said.

“With the continued free float of the New Zealand dollar, there is little to suggest that wide currency fluctuations will not continue in the future. The board could then find itself in an intolerable situation whereby minimum prices fixed for the season on a market basis became unsustainable.

“Accordingly, the board would consider seeking ministerial approval for a change in minimum prices during the season under the exceptional circumstances clause of the Wool Industry Act, if warranted by the state of the minimum prices funding account, currency relativities or other circumstances.” Under the terms of its act, the board cannot vary the average minimum price by more than 10 per cent higher or 5 per cent lower than the previous season’s average or change the average minimum price during a season, without the minister approving.

The accumulated funds for the scheme have always been in credit, currently totalling $9O million, following supplementation to growers of $18.5 million during the last season.

Minimum prices apply

to all grower owned greasy or scoured wool sold for the first time at auction in New Zealand or at Bradford, and to privately sold greasy wool where the buyer has arranged with the board for valuations. The 1986-87 minimum price table will take effect at all wool auction sales as from and including the combined North Island sale on July 24. To assist woolgrowers in evaluating specific type minimum prices, the board will provide a comprehensive list of minimum prices on both a clean and a greasy basis. These will be expressed in tables showing the clean (on the auction floor) price, average yield and greasy equivalent price at this average yield. Individual prices will vary considerably according to the actual yield as valued by the board.