Price support for wool in U.K. dropped

Press, 1 August 1986, Page 28

Price support for wool in U.K. dropped

PA Wellington The Wool Board will no longer provide market or minimum price support for New Zealand wool sold at auctions in the United Kingdom as from the start of the 1987-88 season.

“Now that only 1.5 per cent of New Zealand’s wool production is sold annually at Bradford, the high cost of providing market support and minimum price supplementation in the United Kingdom can no longer be justified,” said the chairman of the Board, Mr Doug Mcllraith.

As a result of restricted demand, the board had consistently been required to support the Bradford market at much higher •levels than at auctions in New Zealand.

In the 1985-86 season, the board was requiring to bid on 63 per cent of offerings at Bradford, more than double local bidding activity, while purchase levels of 38 per

cent were more than three times the level at New Zealand auctions.

With grower shipments for sale in the United Kingdom having steadily fallen away, the Bradford sales were no longer of any significant strategic or fundamental importance to the marketing of New Zealand wools.

The board recognised that shipping wool for direct sale at Bradford auctions was an important option for a small number of growers. However, the costs of board support were too disproportionate to rank as a priority allocation of growers funds.

After the discontinuation of Wool Board support and minimum price supplementation at Bradford, auctions effective from June 30, 1987 (the end of the present 1986/ 87 seaason), woolgrowers would still be able to ship their wool to Britain for sale there without board support.