Continued premiums for tidy wool likely

Press, 27 January 1986, Page 4

Continued premiums for tidy wool likely

PA Wellington Fanners who bothered to prepare their wool carefully for sale are enjoying a price premium of up to 40 cents a kilogram for their clips at auction, says the Council of Wool Exporters in its weekly wool sale preview. The premium looks likely to be maintained for the rest of the season, it says.

While the trade is having a lull until the outlook for the United States dollar clears, exporters expect demand to remain steady at this week’s wool sales in Christchurch and Wellington. Many export houses will buy to fill firm contracts, and a lot of wool will go into scours and further processing to meet expected strong overseas demand during the next two months.

Exporters also predicted the demand for Halfbred and Merino clips will continue to firm at Thursday’s Dunedin sale, with the strengthening of the Australian dollar. However, only small quantities of this type of wool are available.

Much poorly-coloured

crossbred wool has been presented at auction this season, resulting in - a large premium for better style wool of good colour.

The fashion dictates of pastels in both carpets and fabrics strongly suggest farmers should spend more time on their clips, the report says.

Some mills were not keen to buy poorly skirted or shed-stained fleeces, at any price, said Mr Peter Whiteman, an export buyer for Wellington wool export house Masurel Fils (N.Z.), Ltd. “People making pastel carpets are not going to attempt to bring poor fleeces up to standard on the factory floor,” he said. Poorly-coloured fleeces, caused by lush growth and high humidity in many districts this summer, are also discounted by some mills and avoided by others. The yellowing would not scour out and, Mr Whiteman said, it would be a "disaster” for a mill to dye stained wool a pastel colour. Wool colour is largely beyond the farmers’ control. But pen stain and skirting are not.

Mr Peter Marshall of

John Marshall and Company, Christchurch, said that two or three years ago some farmers stopped skirting their wool because there was little or no premium paid for well presented lines, the result of a lack of interest in pastels.

“This year, in contrast, will probhbly be the classic. Good coloured, well prepared lines will collect a 30c to 40c premium,” he said.

“A lot of it will be climatic. But much of it will relate to good shedwork.”

Mr Marshall said any grower who always prepared his clip well was likely to win eventually. Not only would he collect the fashion premiums, but buyers did tend to seek out the larger lines known to be well prepared and which would perform well on the machines. Mr Whiteman said the biggest premiums for fleece style were paid after Christmas, when lush spring growth and summer heat tended to hurt average fleece styles. “With so many BC style clips around, exporters tend to seek out the Bs,” he said.

Most' exporters believe the colour, soundness and preparation of the fleece will, along with weight, chiefly determine a farmer’s wool income.

It is important, they said, that farmers should grow wool that suited their country, rather than passing fashion trends. Mr John Crichton, a Christchurch wool exporter, said farmers must be prepared to overlook the one or two year distortions in the wool market.

He believed the long term future for good style New. Zealand crossbred was excellent and he questioned the wisdom of farmers trying to cash in on fine wool prices, particularly if their land was unsuitable for growing fine wool.

“It is best to grow wools which grow well under your own conditions,” said Mr Crichton. “While there will be fluctuations in demand for crossbred, it will be sought for carpets and other uses as far into the future as anyone can see. “Prospects for fine wool are also sound, but we are only a small producer of

fine wool on the world scene, so prices here are very subject to fluctuations in the currencies of Australia and South Africa. In contrast, we dominate world crossbred wool production and prices are much less volatile.”

As a final caution, Mr Marshall asked growers to remember that fashion dominated everything in the wool Industry. “If you go back four years, Merino wool was right out of fashion and prices for growers were nothing short of disastrous. In the last three years Merino has been in favour and prices are excellent.

"It’s my belief that the grower of good crossbred wool has probably done better over the years than the grower of good fine wool.

“The choice is up to the grower. Many are desperate to diversify. But they should look at a 10-year trend, not a three-year trend. It is going to take them longer than that to change their flocks over anyway.”