THE WOOL INDUSTRY

Wanganui Chronicle, Volume 88, Issue 36, 12 February 1944, Page 4

THE WOOL INDUSTRY

SOBER BRITISH VIEW RETURN TO AUCTIONS IN POST-WAR TRADE LARGE ACCLWtULATICNS (Special CorrMpondant— N.7..P.A.) Recd. 7.40 p.m. London, Feb. 10. Post-war prospects of Che wool industry were soberly reviewed by Ix>rd Barnby. in an interview with three New Zealand newspaper editors visiting Britain. Messrs. W. A. Whitlock (Hawke's Bay>. E. Dumbleton (Auckland) and P. H. N. Freeth (Christchurch). Lord Barnby outlined the difficulties that will arise when huge stocks of wool held in store in various countries become available, and discuss'd 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 he thinks a return to the auction marketing system of pre-war days must be the aim if the manufacturing industry is to meet the capricious demands of fashion changes of custom for Home and export. He is convinced also that there mus. 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. He also advocated a much more extensive research by the United Kingdom of the wool textile industry, into new uses for wool and imprvements of manufacturing practices. To this end he suggests a statutory levy on the whole manufacturing industry. liquidating wool in store Discussing difficulties in liquidating accumulated wool stocks, Lord Barnby estimated that it 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 were also accumulation's in Argentina and South Africa. Much of this was fine wool, which only in the United States is largely used for war purposes. It is absolutely essential. in order to avoid a ruinous slid* in prices, that these stocks should he liquidated gradually. He suggested that the only way to achieve this end was for control of disposal through «n international organisation, representative of the Governments of Britain. United States, Australia. New Zealand, South Afrca, Argentina, and other producing countries. This could operate in much the same way as Bawra (British. Australia Wool Realisation Association, Ltd.) after the last war. By establishing ceiling and floor prices, the outflow of existing stocks could be regulated to fit. the abortive capacity of the textile industry without delaying return to private enterprise, and traditional auction practice. GERMAN MILLS DAMAGED Lord Barnby thought it very likely that much of the machinery of the Continental mills, bv the end of the German war. would have been destroyed and the necessity of replacing it would delay absorption of woo” stocks. Assuming that the mills of the United Kingdom were running at maximum capacity after the Germhn war. they would riot cope with all the wool coming in. An interesting point in this connection was that the United Kingdom mills at the present were running at only 40 to 50 ner cent, of capacity, while the United State* were running at 90 per cent. The present consumption in the United States was largely ephemeral, being stimulated by the production of n»l)i--tary uniforms, while the United States could not. ~svell become an exported of wool textiles because of its high raw wool duty.

Lord Barnby considered that a continuance of Government control, after accumulated stocks had been liquidated. would be all to the disadvantage of the New Zealand grower. As an example ot what might happen under Government control, ha mentioned that in 1942 the attitude of New Zealand Government towards buyers from the United States resulted in a considerable loss of goodwillNew Zealand, unlike Australia, denied American buyers the privilege of employing tbeir own brokers in New Zealand to select the wool they required. The result was that 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 Mr. Nasn (New- Zealand representative in Washington), who replied that all qualified brokers in New Zealand were already employed under the commandeer. The matter had since been adlusted. but irreparable harm might have been done. As American requirements are about 80.000 bales, it will be seen that New Zealand acted very unwisely. While making this criticism Lord Barnby said he could not speak highlv enough of Mr. Nash’s unfailing courtesy anti meticulous attention to detail, hut. at the same time, he believed marketing on socialistic lines would imperil the interest, of the New Zealand woolgrowers. He added a belief that the technical part of the appraisal scheme had been very well carried out by the marketing department, and Mr. George Duncan. the director. Discussing prices. Lord Barnby said it. was important to remember that three prices had to be considered. Firstly, the price paid New Zealand growers, which he thought was nqw reasonable, though perhaps on the low side: secondly, the price whereat the British Government issued the wool to the United Kingdom manufacturer, which was 80 per cent, above pre-war level and. thirdly, the price whereat the British Government sold the wool to overseas countries, which was 15 per cent, above the United Kingdom issue price. He considered the price charged to the United Kingdom manufacturers had been set by the British Government too high, though it was currently in line I with the general commodity price index He thought the price of wool In post-war years would he cheeked hv the price of arlificial fibres, which he nointed out remained constant during the war period, while prices for natural wool had eonriderably Increased. Competition of artifiral fibre might prove less serious than was widely feared, because new uses fr-r it were being sough', and developed. Its role could be complementary to natural wool, rather than injuriously competitive with it.