I.W.T.0. delegation looks over N.Z. Wool Board

Press, 9 October 1987, Page 31

I.W.T.0. delegation looks over N.Z. Wool Board

The task of the Wool Board was to bottom-out the wool market on behalf of growers rather than push the market up, believes the International Wool Textile Organisation. The organisation’s president, Mr Jean-Marie Segard, said in Christchurch last week that artificial support might maitain prices for a short time. But the drop when it came would be much greater. The organisation had recently criticised some of the actions of the Wool Board and a delegation, led by Mr Segard, last week visited New Zealand at the invitation of the board. The board wanted the wool trade to understand

the present marketing and technological developments within the industry as well as investigate at first hand the initiatives being undertaken by the board. The 1.W.T.0. represents the interests of the wool textile industry throughout the world. It has members in 29 countries. Mr Segard said the wool tade needed the confidence of an assured supply of wool. If the wool could not be bought at auction because of artificial support mechanisms, then the trade would be squeezed. The confidence could be reduced also by direct exports of wool by the board. Mr Segard said at the

end of the tour that he was sure the board would try to comply with the requirements of the wool trade, while at the same time maintaining the interests of wool growers. The board’s chairman, Mr Pat Morrison, said the intervention policy of the board was critical for farmers. But it was important not to intervene at a level which would stop .the flow of wool to the market. A 30 per cent rise in the value of the New Zealand dollar compared with United States currency during the last 50 weeks was just one problem associated with organising intervention levels, said Mr Morrison. Mr Segard said the

delegation, made up of representatives from 11 countries, believed there should be a continuing dialogue between grower, countries and their customers. Unless this dialogue was maintained and strengthened, misunderstandings would arise. The organisation felt growers must be able to produce in an environment that gave them an adequate return; the trader and exporter must be able to market the wool to the world without artificial constraints; and the customer must have confidence that there will be free and equal access to the raw material. Mi; Segard emphasised three points he made to the board:— • The international marketplace could not be

held responsible for the monetarist policies of the New Zealand Government; • There is a need for a clearer understanding of the objectives and the factors that determine the level of market intervention exercised by the board; • The board must avoid the risk of appearing to confer some favourable advantage on its partners in joint ventures and other investments. Although the carpet wool industry would face strong competition from cheaper, synthetic carpets, Mr Segard said he was optimistic about the future. The high value of the New Zealand dollar, however, was distorting the flow of wool to the market.