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Thursday, 30 September 1971
Page: 1830

Mr Grassby asked the Minister for Primary Industry, upon notice:

(1)   What is the Australian average market price for greasy wool covering all wool sold from 1st July 1970 to the commencement of operations of the Australian Wool Commission on 17th November 1970 and for all wool sold since that date to the end of the 1970-71 series of wool sales.

(2)   Has his attention been drawn to the provisional figures released by the Joint Wool Selling Organisation and quoted in the Sydney Morning Herald of 6th July 1971 stating that the average price for the last week of the 1970-71 season was 25.44 cents.

(3)   If so, what is his attitude to this figure, when it is associated with the information available in relation to part (1) above and the reported statement of Sir William Gunn, Chairman of the Australian Wool Board, on the programme' This Day Tonight' on Wednesday, 4th August 1971, that since commencement of operations of the Australian Wool Commission, in that 8 month period, the average market price for wool has gone up by 6 cents a pound.

Mr Sinclair - The answer to the honourable member's question is as follows:

(1)   The average greasy price for wool sold at auction from the commencement of the 1970/71 wool selling season until the commencement of operations by the Australian Wool Commission on 16th November 1970 was 29.69 cents per lb.

The average greasy price for wool sold at auction from 16th November 1970 until the end of the 1970/71 wool selling season was 29.24 cents per lb. (2)I am aware that the average greasy price realised at wool auctions in the final week of the 1970/71 wool selling season was 25.44 cents per lb.

(3)   A comparison of average greasy wool prices as suggested by the honourable member does not reflect the true picture of wool price trends during the 1970/71 wool selling season. The average price of greasy wool for any given period is greatly affected by the marked variation in the types of wool sold at different times of the season. It is also affected by the varying clean yield of greasy wool, as the prices paid by buyers for greasy wool are determined on the estimated clean fibre content. Because of this variation in yield and types, the greasy wool price averages tend to obscure actual movements in prices for various types of wool.

In the present case, the average greasy auction price of 25.44 cents per lb for the final week of the last season gives the impression of a heavy fall when compared with the other two averages mentioned in (1) above. In fact, wool prices during the week in question eased only fractionally, and the low greasy average price for that week reflects largely the normal end-of-season offering of poorer types.

To show the actual trend of wool prices, undistorted by variations in the types and yield of wool offered at individual auction sales, the Australian Wool Commission publishes each week the prices for a range of standard grades on a clean basis. Traditionally, the clean price of a grade designated as 64's Average has been used as a reasonable guide to market trends. Prior to the establishment of the Australian Wool Commission late last year, the price of 64's Average had declined to 58 cents per lb clean while at the close of the 1970/71 wool sales it was quoted at 64 cents per lb clean, i.e., 6 cents higher. I do not know whether this is the figure which Sir William Gunn had in mind in his reported comments on wool prices.

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