The Gisborne Herald IN WHICH IS INCORPORATED “THE TIMES.” GISBORNE, TUESDAY, JULY 25, 1950 WOOL PRICES EXCEED ALL EXPECTATIONS

Gisborne Herald, Volume LXXVII, Issue 23314, 25 July 1950, Page 4

The Gisborne Herald IN WHICH IS INCORPORATED “THE TIMES.” GISBORNE, TUESDAY, JULY 25, 1950 WOOL PRICES EXCEED ALL EXPECTATIONS

THE sensational demand for wool continues, with exceedingly repercussions for the Gisborne-East Coast district. The most unpredictable element in the wide variety of New Zealand overseas transactions, according to the latest messages, is going from strength to strength. In the annual report of the'New Zealand Wool Board just received there is an interesting graph showing prices over the past 38 years. It is like a row of mountain peaks and valleys with the lowest depression in the 1932-33 season when the average price of wool fell to fivepenee a pound. There was a minor depression in 1938-39, but since then prices have gone on climbing until today the line has run off the graph. The demand for wool in London this month has been insatiable. Wool now is rivalling the dairy industry as New Zealand’s greatest earner of overseas credits. More than any other commodity, because of the unexpectedly high demand, it is serving to puli the Dominion out of a very difficult financial position, as reflected in the balance of overseas funds. The part that growers in the Gisborne-Last Coast district arc playing in this aspect of our financial recovery is indicated in the estimated clip yield for 1949-50 published recently. This district’s wool earnings last season were put at approximately £2,750,000. Quality Not Exceptional

The average price per bale of New Zealand wool sold at auctions in this country, according to the Wool Board, was £53 in 1949-50 compared with £l3 in 1938-39 and £36 in 1948-49. Was this the result of improvements in quality? The Wool Board says the clip was a good average one for condition and colour and, in the main, was well grown. A dry spring favoured earlier and uninterrupted sheaving with the result that a proportion of the crossbreds offered at the first round of sales was inclined to be short in staple and thus a little disappointing for topmaking requirements. The end of the season selection was mostly better than normal and included some attractive wools. Second shear showed an all-round increase, while the production of lambs’ wool was up by 10 per cent. The season opened at Auckland with prices 55 per cent up on 1948-49. They eased slightly in early December but soon recovered. Sharp upward and downward movements occurred until mid-March, and by early May peak prices established in January were fully eclipsed. What are the main sources of this extraordinary demand? Bradford bought freely till mid-January, but competition from this source thereafter at New Zealand auctions was only spasmodically effective. The Continent and the United States were consistently in the market. American competition for crossbreds lias been a feature of the sales and purchases have increased considerably. Canadian buying fell off and French demand was somewhat restricted. Germany, Holland, Belgium and Italy took quantities comparable with previous seasons. Russian purchases were limited but Poland, Czechoslovakia and Yugoslavia gave useful support to the market from time to time. The bulk of the buying on Japan’s account occurred before Christmas. U.S. Output Fall Greatest Factor

Generally speaking, the greatest factor in the increased demand is the United States where the domestic production of wool lias declined considerably. There were fewer sheep in the United States at the beginning of this year than at any time since 1867, and only a little more than half the number in the average for 1939-48. This downward tendency, if corrected, cannot be remedied immediately and it would seem that for some time the United States must continue to be a heavy buyer. This docs not take into consideration the possibility of the outbreak of war on a large scale. In that event the demand would be much greater. There is evidence already of additional purchases for military purposes by a number of countries. This was made clear in a cablegram on the London sales published on Saturday: “The uncertain international situation is the background reason for this demand owing to the potential value of crossbreds as raw material for military uniforms.” Anyone who would attempt to predict the future of wool would be a bold person. It is extremely unlikely that he will be found among the experts whose outlook appears to be very much on a day-to-day basis. Meanwhile, encouraged by the success of the Joint Organisation in disposing of surpluses, efforts are being concentrated on the formation of a marketing scheme for the future. So far the proposals have been complicated by the fact that all the British Commonwealth countries are signatories to the Havana Charter, and it may be that the obligations they have accepted under that charter will necessitate the placing of the marketing proposals before the International Trade Organisation Wool Study Group to secure international assent. New Zealand’s future and, in particular, our future in this district is interwoven with the wool industry. Good as prices are today, the consensus of qualified opinion is that they will not last. Sensational prices may even accentuate the forces that have in the past caused violent fluctuations. A temptation to be lulled into a false sense of security will need to be resisted. Instead, present conditions should be a stimulus to tlic achievement of a joint marketing arrangement for the future.