Western Europe buying N.Z. crossbred wool

Press, 1 September 1986, Page 4

Western Europe buying N.Z. crossbred wool

PA Wellington 1■ ■ ■ A long-waited increase in demand for b|ew Zealand crossbred iwool is now taking place in Western Europe, according to the New Zealand; Council of Wool Exporters. In its market preview, Mr Simon Kitto of Masurel Fils, Wellington, said this was the one bright spot on the rural scene.

Western Europe is the market for 40 per cent of the New Zealand wool clip, but for several months its mills have been extemely quiet — delaying wool purchases and running down stocks. i

Western Europe had returned as a big customer of New Zealand wool, said Mr Bill Carter, executive manager of the council.

“This means the underlying demand for wqollen textiles is sound and that mills, faced with running out of raw or scoured wool stocks are being forced to place orders for forward delivery even though they are unhappy with the volatile state of the dollar,” he said. ! Mr John Botting of Cavalier Elco, Auckland, said Western European mills had in the last two years been buying wool up to several months ahead of delivery. ! This meant that present wool auction activity reflected contracts with European mills which had

been written some months ago, plus contracts with mills in other countries where business tended to be for immediate shipment Mr Botting said a lot of business was placed with Western European mills for delivery between October and March, 1987. The September to November period was, he said, a time when a lot of orders were placed for the New Year delivery. “There will be plenty of demand for the smallish offerings which will be coming up at auction in the next couple of months,” Mr Botting said. “The fact that European buyers are interested in buying for shipment several months ahead suggests their ready acceptance of present prices and the likelihood that prices will possibly firm, especially if we continue to get good demand from Eastern Europe and South-East Asia.”

Masurel Fils’ representative in Western Europe was writing a lot of business for crossbred wools and the company was getting much more inquiry. Prospects for fine wools were not so good, according to the exporters, though present prices were likely to be maintained at auction unless the Wool Board changes its price support policies. "The Wool Board is in

effect setting, prices for wools 31 microns and finer,” said Mr Don Quested of Hart Wool NZ, Ltd, Christchurch.

“These sorts of wools are readily available in Australia and overseas customers always get quotes on both sides of the Tasman before deciding to buy. The differential In price was now about 10c a kilogram, which was certainly better than last year when the differential in favour of Australia was 50c a kilogram. While local mills did not want to pay any differential, at least at 10c a kilogram they were getting it cheaper than they would by buying in Australia and shipping it across the Tasman, Mr Quested said. “In the end it all depends on the cross-rate between the Kiwi and the Aussie dollars,” Mr Quested said. “If the Aussie dollar goes up or we go down a little the fine wool market will be a whole new ball game.” The fine wool market was heavily influenced by Australia, where most of

the clip was auctioned between September and November each year. So much was offered that the Australian Wool Corporation tended to take up to a third into stock before Christmas and then put it back on to the market in the New Year, Mr Carter said. The New Zealand clip was much better spread, but fine wool production coincided with Australia’s. “This last week, for instrance, the A.W.C. bought 41 per cent of the offering in Brisbane and 25 per cent of the offering in Melbourne,” ■ Mr Carter said.

At the next wool sale in Dunedin on September 4, exporters predict demand for the 24,000 bales on offer would be firm on recent sales. The finer wools which make up the bulk of the Dunedin offering would be subject to any movements in currency and Wool Board support policies.

The crossbred wools would enjoy continuing strong demand from Asia, Eastern Europe', New Zealand mills and now Western Europe.