WOOL PRICES

Wairarapa Times-Age, 25 May 1939, Page 3

WOOL PRICES

SERIOUS OBSTACLES SEEN TO STABILISATION MR H. M. CHRISTIE’S SURVEY. MR MULHOLLAND'S PROPOSAL. (By Telegraph—Press Association.) WELLINGTON, This Day. Difficulties in the way of stabilising wool prices were referred to by the chairman of the New Zealand Wool Publicity Committee, Mr H. M. Christie, in an interview last evening. A suggestion that stabilisation might be accomplished, at least on an Empire basis, by the establishment of a special pool like the exchange equalisation fund in England, was made in Auckland last week by the Dominion president of the New Zealand Farmers’ Union, Mr W. W. Mulholland.

Mr Christie said that the question of stabilisation of prices had been considered after the Great War by the Australian wool producers. The late Sir John Higgins, who had been chairman of B.A.W.R.A. (British Australian Wool Realisation Association), had advocated that the very substantial funds held by B.A.W.R.A. should be retained and a board established to control the funds and purchase wool when the prices fell below a certain point: tne stock of wool would then be slowly liquidated when prices rose. The matter was brought up again at a recent conference in New South Wales, but so far no action had been taken. Mr Mulholland had stated that action in similar lines had been taken to control other world commodities. Wheat, sugar, coffee and other foodstuffs were in this category. “The position is entirely different with wool, the market for which is probably the most sensitive of any primary product,” said Mr Christie. “Commodities such as wheat and sugar require very little processing to prepare them for the retail market, but with wool very extensive processing is necessary. Wool is used for the manufacture of such a wide range of articles that the handling of stocks by a board or council would be very difficult to say the least of it. “It should also be remembered that whereas wheat and sugar have no substitutes competing with them, wool is faced with heavy competition from cotton, rayon, wood fibres and zellwoollee. It has been very noticeable during recent years that the sale of fibres rapidly expands as wool prices rise. This is very marked in the case of the finer merino and cape wools, for the artificial fibres are nearly all fine, generally ranging fr<sp 75 count upward.”

Mr Christie said the question of making some recommendation which

would tend to stabilise wool prices was given very full consideration by the executive committee of the Australian, South African and New Zealand Wool Councils, and by the secretariat and advisory committee when they met in London last year. However, it was felt at that time that qo satisfactory solution could be found.

“In the United States of America the future market is very extensively used in connection with cotton, and this method is widely used by individual wool-growers in Australia," said Mr Christie. “To use successfully the futures market, is it necessary for the producer to make a very careful study of the statistics and prospects generally., The main weakness in the futures market has been that people who are not directly interested in the trade have gambled on the market in a similar way to that on the Stock Exchange, but nevertheless many producers who have used this method extensively have praised it.”

Mr Christie said that no stone should be left unturned to iron out at least some of the greater undulations in wool prices.