WOOL MARKETING

Otago Daily Times, Issue 25458, 12 February 1944, Page 6

WOOL MARKETING

POST-WAR PROSPECTS HUGE STOCKS ACCUMULATED <N.Z.P.A. Special Correspondent) (Rec. 7 p.m.) LONDON. Feb. 10. The post-war prospects of the wool Industry were soberly reviewed by Lord Barnby, the British wool authority, in an interview with the visiting New Zealand journalists, Messrs P. H. N. Freeth (editor of the Christchurch Press), W. A. Whitlock (editor of the Hawke’s Bay Herald-Tribune), and E. V. Dumbleton (literary editor of the Auckland Star).

Lord Barnby outlined the difficulties that will arise when the huge stocks of wool held in store in various countries become available, and discussed means of overcoming them. He is convinced that a measure of controlled direction of wool marketing will be necessary for a considerable period after the war, but thinks a return to the auction marketing system of prewar days must be the aim if the manufacturing industry is to meet the capricious demands of fashion and changes of custom for home and export. He is convinced, also, that there must be widespread publicity for woollen textile products, that the International Wool Secretariat is doing good work, and that New Zealand growers should continue to support it. Extensive Research Advocated

Lord Barnby also advocates much more extensive research by the United Kingdom wool industry into new uses for wool and improvements in manufacturing practices. To this end he suggests a statutory levy on the whole of the manufacturing industry. Discussing the difficulties of liquidating the accumulated wool stocks, Lord Barnby said he estimated that if the German war ended in 1944 there might well be an accumulation in various countries of up to 8,000,000 bales,

including about 3,000,000 bales in the United States belonging to both the United States and the United Kingdom Governments. There vfrere also accumulations in Argentina and South Africa. Much of this was fine wool, which was largely used for war purposes only in the United States. It was absolutely essential in order to avoid a ruinous slide in prices, that these stocks should be liquidated gradually. He suggested that the only way to achieve this end was for control and disposal to be carried put through an international organisation representative of the Governments of Britain, the United States, Australia, New Zealand, South Africa, Argentina, and the other producing countries. This could operate in much the same way as B.A.W.R.A. after the last war. By establishing ceiling and floor prices the outflow of. existing stocks could be regulated to fit the absorptive capacity of the textile industry without delaying a return to private enterprise and the traditional auction practice. Effect of State Control

Lord Barnby said he thought it was very likely that much of the machinery of Continental mills would have been destroyed by the end of the German war, and the necessity of replacing it would delay the absorption of wool stocks. Assuming that tne mills of the United Kingdom were running at their maximum capacity after the German war, they would not cope with all the wool coming in.

An Interesting point in this connection was that the united Kingdom nulls were at present running at only 40 to 50 per cent, of their capacity, while United States mills were running at 90 per cent., Lord Barnby said. The present consumption in the United States was largely ephemeral, being stimulated by the production of military uniforms, while the United States could not well become an exporter of wool textiles because of the high raw wool duty.

Lord Barnby said he considered that the continuance of Government control after the accumulated stocks had been liquidated would be all to the disadvantage of the New Zealand grower. As an example of what, might happen under Government control he mentioned that in 1942 the attitude of the New Zealnad Government towards buyers from the United States resulted in a considerable loss of goodwill. New Zealand, unlike Australia, denied American buyers the privilege of employing their own brokers in New Zealand to select the wool they required. The result was that the American buyers turned to Montevideo for their requirements. These buyers might or might not return to the New Zealand market after the war. Protests had been made to the New Zealand Minister at Washington Mr W. Nash, who had replied that all the qualified brokers in New Zealand were already employed under the commandeer. The matter had since been adjusted but irreparable harm might have been done. As the Agiencan requirements were about 80,000 bales, it would be seen that New Zealand acted very unwisely.

While making this criticism, Lord Barnby said, he could not speak highly enough of Mr Nash’s unfailing courtesy and meticulous attention to detail, but at the same time he believe that marketing on Socialistic lines would imperil the interest of New Zealand woolgrowers. He added his belief that the technical part of the appraisal scheme had been very well carried out by the Marketing Department and Mr George Duncan.

Question of Prices Discussing prices, Lord Barnby said it was important to remember that three prices had to be considered first, the price paid to the New Zealand grower, which, he thought, was now reasonable, though perhaps on “he low side: secondly, the price at which the British Government issued wool to the United Kingdom manufacturer, which was 80 per cent, above the prewar level; thirdly, the price at which the British Government sold wool to overseas countries, which was 15 per cent, above the United Kingdom issue price. Lord Barnby said he considered that the price charged to United Kingdom manufacturers had. been set too higii by the British Government, though it was currently in line with the general commodity price index. He thougnt the price of wool in the post-war years would be checked by the price of artificial fibres, which, he pointed out, had remained constant during the war period, while prices for natural wool had considerably increased. The competition of artificial fibre might prove less serious than was widely feared, because new uses for it were being sought and developed. Its role could be complementary to natural wool rather, than injuriously competitive with it.