SOUTH AFRICAN WOOL

Wairarapa Times-Age, 20 February 1940, Page 6

SOUTH AFRICAN WOOL

AGREEMENT WITH BRITAIN

OPEN MARKET ASSURED. MINIMUM UNION PRICE FIXED. Negotiations between the Governments of Ihe Union and Great Britain about the disposal of the Union wool clip have ended successfully, according to a statement issued recently by the Secretary for Agriculture at Pretoria. The statement adds that the two Governments have worked out details of the scheme foreshadowed some time ago whereby Great Britain will be prepared to buy most of the South African clip at an average price of lOijd a pound in the grease. The statement is as follows:— Previous announcements on the marketing of this season's wool clip indicated the general arrangements for the disposal of the present clip. Wool producers were informed that the Government had decided to maintain an open market in the Union but that in order to prevent a possible collapse of open sales had made an agreement with, the British Government whereby Great Britain would continue active participation in our market, at’the Australian contract price up to a material percentage of our clip. The negotiations with the British Government have now been concluded. TYPES AND PRICES. While the negotiations may have appeared to be somewhat protracted, I feel sure that wool farmers will appreciate .that in order to arrive at a general average for the Union’s clip in the grease, type classifications had to be agreed upon. We had to price individually scores of types, and reach complete understanding with the British Government oh each type. The types and prices have now been agreed upon, and the department will place at the confidential disposal of all brokers a complete price list involving all the various types. The British Government has finally accepted the average price of lb in the grease which was foreshadowed in my previous statement. In view of the percentage differences in types, qualities and clean-scoured yield between the wools of the Union and Australia, and even allowing for geographical situation, we must consider as extremely satisfactory an average grease price for the Union clip equal to that for Australia. BUYERS TO BE APPOINTED. As regards the practical operation of the scheme, buyers appointed by the British Wool Control Board will take part in the auction sales in the ordinary way and bid at least to the limits of the agreed prices for the various types. As is customary in the trade, representatives of the British buyers, will appraise all wool before sale, but will naturally do so on the basis of the agreed type and price schedule. In order to enable brokers to protect the interests of producers fully, the British Government has agreed to instruct its buyers to give individual selling brokers the basic appraisement values for their personal and confidential information before the auction sale. To meet any diftereneb of opinion on the appraisement, the agreement provides for arbitration. The necessary machinery will be created at each port but it is felt that the procedure outlined should work smoothly. The agreement concerns wool purchased by Great Britain only, and does not include purchase for or on behalf of the French Government. For the time being, at least. French buyers will operate independently; in fact, they are already doing so. This will undoubtedly strengthen competition, and as Great Britain will also come into the market within the next few days there is every prospect, that sales in the near future will be fully supported. ACTIVE DEMAND. Although competition from neutral countries may at times have been somewhat disappointing during the past few months, I am optimistic that now that the minimum levels at which Great Britain will operate have been established, demand from those countries will become more active. The return to the Union producer has been protected to at least the minimum of the Australian contract price, but I hope that under free competition the average price will actually be higher. The arrangement with lhe British Government will apply for the present season only. Next season’s clip will be considered in the light of the experiences gained and the circumstances then ruling.