DISPOSAL OF N.Z. WOOL

Press, Volume LXXXII, Issue 24911, 26 June 1946, Page 9

DISPOSAL OF N.Z. WOOL

Appraisements End This Month

CONTROL OF NEW AND STORED STOCKS

The decision of United KingdomDominions Wool Disposals, Ltd., to resume auction sales of wool this year WiU not surprise many of those connected with the industry. A return to auctions was generally expected, and generally desired. The appraisement system served its purpose well during the war, but recently there have been plenty of indications that the finer types of wool which Canterbury produces so well, have not commanded the premium over lower grades that the demand overseas seemed to war-

rant. A return to the auction system will mean to the grower chiefly that he Will again have to resume respond bility for paying for the handling of his clip, and, more important, will to produce a further amount as his contribution to the expenses of the new organisation. How much this is likely to amount to is npt at present known, but it is believed that a decision will be made within a very few weeks. The amount is likely to be fairly substantial. The operating expenses pf the New Zealand portion of the new organisation will be borne equally by the wpolgrowers and the organisation itself. The growers’ contribution will be deducted from the proceeds of sales at auction, or of sales to the organisation when the upset price is not reached. The share of the organisation will be paid from proceeds of sales of the wool it holds.

Stocks of old wool held in New Zealand were announced this week as being approximately a million and a quarter bales. An official estimate made some weeks ago was that the liability of the New Zealand wool “pool” for stocks of New Zealand wool, at its original cost, would be about £12,750,000 sterling at the opening of the new scheme. Interest on part of this amount will be a liability on the grower. Auctions will not Start until September. Until they have gone some distance it will not be possible to make an accurate estimate of what the world’s requirements are for new and old wools.

The new system was decided upon by the Uondqn Wool Conference held in April last year, which was attended by representatives of the United Kingdom, Australia, New Zealand, and South Africa. Its recommendations were that the commandeer arrangement Should terminate on June 30. 1946, and that a Joint Organisation representing the four governments concerned should be set up with power to buy. sell, aqd hold wool; to determine the quantities of wool to be offered from time to time; and to fix reserve prices at which it would be willing to buy wool. It further recommended that auctions should be resumed as soon as conditions enabled buyers to attend the sales freely.

Full Powers The New Zealand agent of the new organisation is the New Zealand Wool Pisposal Commission, which consists of a Government-appointed chairman, three Government members, three members representing the wool-grow-ers. and one associate member representing the Wool Brokers’ Association. The Commission has full power to organise the disposal of New Zealand wool, and to provide for finance, has power to levy a contributory charge on all wool produced in New Zealand to provide funds for the Dominion’s share in the operating expenses of the new mter-Governmental organisation, to pay interest on the wool disposal account, and to cover the levy payable to the Wool Board. At the end of May thip year, the programme was carried a step further by the formation of United KingdomDominion Wool Disposals, Lftd., which is the new name of the suggested Joint Organisation, and has the same powers.

The most difficult decision will undoubtedly be on the amounts of wool that are to be offered to buyers. Certain trends are very obvious in the market, and have been for some months, but until auctions start, it will be impossible to make an accurate estimate of the wool requirements of a world upset by several years of war. All overseas comment, and advices received here from overseas, indicate that there will be a considerably wider difference in price between fine wools and coarse wools than there was under the commandeer. Finer wools went ipto consumption during the war more freely than did the lower counts, and there is a very strong demand for finer wools for civilian consumption. The new system will make a considerable difference to the producer in this country. For a start, it is possible that there will be a return to the days of high premiums for superfine wools. Wool accounts, too, will be different. During the war, the farmer received a price which took- into consideration storage and other costs. He received, in fact say 14d. for wool which was actually sold to the United Kingdom at 15d, the extra penny being accounted for by the usual charges. Under the auction system the grower, will have to pay the charges he paid before the war, and in addition, will have to pay his share of the expenses of the new organisation. In addition, there is a possibility that brokers’ charges may rise, qs they have for a number of years remained unaltered in spite of rising wages and costs in brokers’ stores. It is certajn tflat the grower will have to receive more at auction than he did under the commandeer to achieve the same net result. It seems certain that growers of fine wools need have little fear. Growers of lower grades will be protected by the minimum price which will be fixed.

The BAWBA Scheme The difference between the scheme which will come into operation next month and the BAWRA scheme after, the first world war is that the present authority will handle all wool to be disposed of, whereas BAWRA handled only the accumulated clip bought during the commandeer but still undelivered to users. The accumulation which threatened the stability of the current clips after the first World War amounted to almost 3.000.000 bales, which included 1.800.000 bales of Australian. 800.000 bales of New Zealand, and 300.000 of South African. BAWRA was not the first scheme Suggested. Early in the 1919-20 season the United Kingdom announced that it would not carry on the war-time commandeer beyond the agreed one season after the cessation of hostilities. An organisation known as the Australian Wool Council was formed, consisting of five representatives of the growers, and five of the wool selling brokers. This body formulated a scheme which would have controlled the sale of all wool during the 1920-21 wool year, and was submitted to a vote of the growers. A two-thirds majority was required before the scheme could be considered as approved, but this majority was by a small margin not reached. However, the vote was very small in relation to the number of growers, and the scheme was dropped altogether. Various negotiations were then entered into, in which the United Kingdom and Commonwealth Governments participated, and in 1920 a meeting representing growers, brokers, fellmongers. scourers, and others interested formed a body that became the British Australian Wool Realisation Association, or BAWRA. The objects of the association were to take over a half share of (a) all Australian wool bought by the British Government through the Commonwealth Government and still undisposed of. and one half of all real and personal property acquired in connexion therewith and still undisposed of; and (b) one half share of any surplus profit on resale of Australian wool so bought still undistributed. BAWRA came into existence in January. 192 X. 'The last bale of wool em-

braced in the acquisition scheme was not shinped until May. 1923, and the last bale of wool sold in London in Mav. 1924. Payments distributed by BAWRA amounted to £28.775.000 between July 1921. and March, 1927,, when the last payment was made. The final winding up of the association was delayed until 1932 by litigation which involved appeals to the privy Council