DOMINION WOOL CLIP

Otago Daily Times, Issue 23940, 16 October 1939, Page 6

DOMINION WOOL CLIP

PURCHASE BY BRITAIN NEGOTIATIONS COMPLETED RETURN OF 12*d TO PRODUCER (Per United Press Association; WELLINGTON, Oct. 14. The Minister of Marketing (Mr W. Nash), announced today that, following .lengthy negotiations, the price had been fixed for the purchase of the New Zealand wool clip for the period of the war and one year thereafter. The price is 9.8 d sterling, which is equivalent to 12RJ in New Zealand currency, with the provision that New Zealand shall share with the United Kingdom on a basis of half the profits on the sale of wool outside the United Kingdom. “The negotiations have necessarily been lengthy,” said Mr Nash, “ the Government’s endeavour being to procure a price that would ensure a reasonable return to all New Zealand’s wool producers. The price is well above last year’s realisations, and compares favourably with the Australian price of 10.75 d sterling for the Australian clip. “There are still many details to be arranged between the Governments concerned,” the Minister said, “as to brokers’ and other charges, and it is impossible at this stage to estimate the probable return from the profits on sales outside the United Kingdom. The Government has, been in frequent conference with the representatives of the wool-brokers arid buyers with the object of making all the necessary arrangements for the handling and appraisement of the wool as soon as deliveries are made to the stores.” Mr Nash added that final arrangements in this connection would be announced later. The Marketing Department, he said, was charged with the responsibility of carrying out all the necessary work in connection with shipping and payments, and the staff was now being organised to fulfil these functions efficiently and without delay. LONDON ANNOUNCEMENT SHARE IN PROFITS FROM RESALE (United Press Association? (By, Electric Telegraph—Copyright) LONDON, Oct. 13. It is officially announced that an agreement has been reached among the British, Australia, and New Zealand Governments for Britain’s purchase of the wool clips for the duration of the war, and one clip thereafter as far as it is not required for domestic consumption. The agreed, price is lOfd for Australian and 9.8 d for New Zealand. Each dominion shares equally with Britain any profit made by resales outside the United Kingdom. Other details are still being discussed. , THE AUSTRALIAN PRICE A £12,000,000 INCREASE GROWERS WELL SATISFIED (United JPress Association) (By Electric Telegraph—Copyright) SYDNEY, Oct. . 14. (Received Oct. 15, at 6.30 p.m.) Confirming the completion of negotiations for the acquisition of the Australian wool clip the Prime Minister (Mr R. G. Menzies) said the basis agreed upon by the British Government assured to Australia an advance of more than 3d a lb compared with the average of last year, representing an aggregate increase in the Australian wool cheque of £12,000,000. In other words, wool growers will receive 3 3.4 d per lb (Australian currency), compared with 10|d (Australian currency) last year. Mr Menzies added that the position of neutral countries had been under sympathetic consideration, and it was anticipated that arrangements would be made to enable normal trade to be carried on. Representatives of the woolgrowers have expressed the opinion that the price Britain is paying is in all circumstances fair and reasonable. Indeed, it is as much as they had expected. AN INADEQUATE PRICE UNPAYABLE TO FINE WOOL GROWERS RISE IN FARMING COSTS The chairman of the Dunedin Stock Agents and Wool Brokers’ Association (Mr A. Miller) states that the price of per lb in New Zealand is equal to 9.8 d per ,lb sterling. It can be assumed, Mr Miller says, that the commandeer will be on the basis which obtained on the occasion of the previous commandeer, when the Imperial authorities accepted delivery in store and paid all charges from this point, including storage. Sheep farmers during the last commandeer paid the charges to the store, and also the cost of classing and binning. The British Government was responsible for the cost of appraisements, which included the offering charge of id per lb commission, all costs to f.0.b., as well as freight. “ The average price of 12-id per lb for the New Zealand clip is below the figure anticipated by farmers,” Mr Miller said, “ and is considerably lower than that paid und,er the previous commandeer. The price was then slightly better than 15d per lb. “It must be remembered,” Mr Miller continued, “ that this price was in sterling, which has since depreciated in value, as has also New Zealand currency to a further extent. This makes the difference, in price more marked than the figures would, at a first glance, indicate. The depreciation in money values has also caused a steep rise in farmers’ costs.

“It is considered by farmers and also by those directly interested in primary production,” Mr Miller said, “ that, with the increased costs of farming, 12d per lb is required for crossbred wools and 15d for fine wools in order to show a small margin of profit. Unfortunately recent events show that costs will be still further increased. All growers are

faced with increased prices for goods imported from overseas, where values have risen, and freights, in addition, have been increased 50 per cent.”

The average price realised for the Otago clip last season was 9.46 d per lb, Mr Miller stated. This represented the gross return to growers, and in the event of the coming commandeer being on the same basis as the previous commandeer, due allowance would have to be made for some of the costs, as previously mentioned, being paid by the British Government instead of by the growers. ■ Based on this assumption* the percentage of. rise in the commandeer would be approximately 37 per cent. A good many farmers in the Otago district would not, however, benefit fully, as the quantity of wool to come in this season would.be affected seriously op account of the adverse weather conditions during the winter. “ No announcement has been made in regard to the range of prices to be paid to growers,” Mr Miller said, “ but in order to meet the position of fine wool growers it is possible that more than 12|d will be paid for fine wools, and a corresponding reduction be made for crossbreds. This method was adopted in the last commandeer, and is again necessary. Growers of crossbred wools-have the advantage of returns from their lambs which in the majority of cases are fattened by them.” Mr Miller added that In view of the arrangement made with the British Government to share half the profit on the surplus wool not required by the United Kingdom, the extent of the final return to the farmer above the average price of 12jd was largely a matter of conjecture, as it would depend on the result of these sales. ' A SATISFACTORY PRICE IMPORTANT PROVISO LAMB AND MUTTON VALUES (Per United Press Association) WELLINGTON, Oct. 15. Provided the prices for lamb and mutton were satisfactory, he thought the farmers would be satisfied with the price announced, said the president of the New Zealand Farmers’ Union (Mr, W. W. Mulholland) an an interview by telephone front his Home at Darfield, Canterbury, tonight. i Mr Mulholland said that as. he understood it, 12£d would be the average price; oyer the whole of the New Zealand clip, but the range would, of course, be according to quality. Lamb and mutton were important constituents of the sheepfarmer’s return, and would have to be taken into. consideration along with’ the price of wool. If the prices for these were satisfactory,-Lbem the farmers would probably; be satisfied with that for wool. u , , It had to be kept in mind, however, Mr Mulholland said, no margin was apparently , being , allowed for possible rising costs,, and if these did increase the wool- price might not be satisfactory. The actual price to be paid for each lot would be appraised on the quality and condition of the wool so that it was as important as ever for farmers to give -careful attention’ to skirting, .classing and - the general get-up of clips. Any slackness in these respects would result in a depreciation of the price paid.