RAISING PRICE OF WOOL

Timaru Herald, Volume CXXXVIII, Issue 19941, 27 October 1934, Page 13

RAISING PRICE OF WOOL

ARGENTINE’S BOLD PLAN

MEETING UNSOUND MARKET

United Press Association— By Electric

Telegraph —Copyright (Received October 26, 7.10 p.m.)

BUENOS AIRES, October 25,

In an effort to raise wool prices the Government agreed to-day to forego profits on exchange operations arising from wool exports. This will give exporters approximately 13 per cent, more than they are receiving now for drafts. The Government’s action is intended to ensure that the increase will be passed to the farmers. Under the controlled economy regime instituted last November, exporters were forced to sell drafts to the Government at fixed rates of exchange. The Government then auctioned drafts to importers wanting to remit funds abroad. This system piled up huge profits enabling the Government to finance its recovery plan. In view of the low wool prices, the Government has agreed to buy drafts from exporters at the average of rates bid each day by importers, less five per cent. This deduction guarantees the Government against loss in a falling exchange market. Exporters cannot avail themselves of the new measure until they have sold all their present stocks as well as the wool already purchased from producers, but not yet delivered. It is hoped that this will increase wool prices on farms.