POVERTY AT BACK OF WOOL SURPLUS

Chronicle (Levin), 13 September 1946, Page 4

POVERTY AT BACK OF WOOL SURPLUS

PROSPERITY DEPENDS LARGELY ON U.S.A. "If tlie United States of Ameriea yan remain prosperous, free from boom and slump, it will prove the greatest contribution to world prosperity which, in turn, will help to reduce the huge piles of surplus raw wool iu the stores of producing .count'ries. World poverty is at the back of the probleni of disposal of the wool surplus." This summing-up of the future possibilities of the wool trade was made by Mr. II. B. Low, lecturer in economics at IMassey Agrieultural College, in an address at the College to a gatliering interested in the wool industry. Mr. Low, who has represented New Zealand on the agrieultural committee of the Far Eastern section !of IJnrra, said that when the wool auctions were resumed German and Japanese bidding, which in pre-war years 'liad collectively com.manded 22 per cent. of the wool exports of producing countries, would be absent for some time. Those two eountries, however, might be allowed to import raw wool in order that, by exporting .woollen goods, they might pay the eost of tlleir minimum needs of imported food. Though the live exporting countries had almost doubled their own pre-war consumption of wool, production had also increased. The world production of apparel wools in the 1943-44 season was 10 per cent. above the average for the period 1934-38. Crossbred wool had increased even more tlian that. The percentage increase for crossbred wool in Australia and Argentina was 40 or more, al though recent drought had temporarily reduced those figures. New Zealand 's increase of 14 per cent. was about the world average increase for crossbred wool. Absorption of the world wool pile, plus current clips, in 12 years, would necessitate at least a 20 per cent. increase in the buying of Dominion wool by the main consuming countries other than Germany and Japan. That extra buying would represent an increase of about 12 per cent. in the pre-war consumption of wool. The speaker said that one useful proposal whicli had been made was that some of the wool should be used in the creation of "buffer stoeks" — perhaps oue year's normal supply. That would, ou the face of it, lialve tlie stoeks whicli might be truly regarded as "sur-

plus." The difhculty of putting that suggestion into praetice lay in the fact that the stoeks had "had tlie eyes picked out of them," and so were not really a representative sample. If the missing parts of tlie typical year's production were added to the buffer stock pool from current clips, the market would be very poorly supplied with just those classes of wool wliich had the readiest sale. New Zealand 's chance of disposing of extra wool on the United States market depended on the extent to which the American Government lowered its present liigh import duty. The consumption of wool pef' head in the United (States was less tharf half that of Great Britain, due to some extent to eentral heating. American use of wool might® eonceivably increase from 600 million pounds to 750 million, which would mean a doubling of pre-war imports. Those pnrchases, averaged over the five-year period, 1934 to 1938, had represented only 6 per cent. of the saleable surplus from the main producing coun'tries, compared with Great Britain 's buying of 27 per cent., France and Belgium 29 per cent., Germany 12 per cent., tlie rest of Europe 12 per cent., Japan 10 per cent., and other countries 4 per cent. When asked later to comment on the recent statement tliat the disposals of stoeks of wool in the past 12 months liad exceeded all expectatio.ns, Mr. Low pointed out tliat most of that was merely a change of ownersliip of the wool. The problem of actually getting the wool manufactured and consumed still remained.