The Gisborne Herald. IN WHICH IS INCORPORATED “THE TIMES.” GISBORNE, THURSDAY, MAY 1, 1947. WORKING OFF THE WOOL SURPLUS

Gisborne Herald, Volume LXXIV, Issue 22318, 1 May 1947, Page 4

The Gisborne Herald. IN WHICH IS INCORPORATED “THE TIMES.” GISBORNE, THURSDAY, MAY 1, 1947. WORKING OFF THE WOOL SURPLUS

THE substantial reduction announced in the accumulated wool stocks must give further satisfaction to an industry already well pleased with the prices received for wool at this season’s sales. According to the latest returns released by the New Zealand Wool Disposal Commission on behalf of the Joint Organisation in London, the stocks at the end of last June amounted to 5,786,700 bales, but at the end of January of this year the stocks stood at 5,018,400 bales—a reduction of 768,300. The welcome reduction is also reflected in the figures for New Zealand alone. Although it was felt before the selling season opened that the results could be awaited with confidence, it is unlikely that even the most optimistic people expected so strong a demand as has been shown at the auctions. The consistent firmness of the market indicates that the restocking movement in these post-war years is well under way throughout the world. The extent of the progress so far made with the disposal of the stocks carried over may be gauged from the fact that 12 or 13 years was the estimated period required for full liquidation of the surplus, if this task was to be accomplished without the depression of prices. Notwithstanding the likelihood that the remaining stocks, which may contain much inferior quality wool, will be more difficult to place, the start made in this first year of the new organisation is distinctly reassuring. An Australian authority recently expressed the opinion that the rapid inroads being made upon stocks would be sufficient to establish the confidence of buyers by removing the danger of a slump and prolonged stagnation due to stocks being thrown on to Ihc market. It can be added that the sale of so much wool at high prices has also made the operation of the Joint Organisation a heartening financial success to date and one that should prove lucrative to the participating countries. Despite the probability that manufacturers’ stocks will shortly be restored and that the tremendous amount of buying during the present season will case, there is no reason to expect a recession in prices. The chairman of the Australian Wool Realisation Commission has pointed out that wool is still not a dear commodity by comparison with other raw materials or in relation to the general changes in price levels. If there is any lingering uncertainty over long-term prospects, it is due to the competition from artificial fibres. But it is clear from the remarks made in New Zealand by Dr. Edgar Booth, chairman of the Wool Secretariat, that the industry is alive to the steps which must be taken to meet rivalry of any kind. In the meantime the good start made with relieving the market of the disadvantages of the huge wartime accumulation is a most welcome development. Because of the keen demand the Joint Organisation has been able to feed out surplus stocks at a rate unforeseen a year ago.