World Bank Document

Report No. EC-109

Public Disclosure Authorized This report may not be published nor may it be quoted as representing the view of the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized

WOOL,

TRENDS AND PROSPECTS Public Disclosure Authorized

August 30, 1962 Public Disclosure Authorized

Economic Staff Prepared by: Frank Lowenstein ILE COPY WOOL. TRENDS AND PROSPECTS

Table-of Contents Pages

SUMAY ...... 1-

ChapterI - Wool Production ......

Distribution of Production ...... 4 - Sheep Numbers ...... 8 - Output of Wool per Head of Sheep ...... 9 - Effects of Prices and Cost of Production . . . . 10 - Future Production ...... 13

ChapterII - Consumption Trends ...... 14 -

Growth of Wool Consumption in the Past . . . . 14 Data on Wool Consumption and Data on Forces Affecting Wool Consumption ...... 15 - Causes of Changes in Wool Consumption in the Free World ...... 16 - Wool Consumption in the Communist Bloc . . . . 24 Future World Consumption .9 24 -

Chapter III - Prices ...... ,..... 28 -.

Projection of Prices ...... 31 -

Chapter IV - Trade ...... 33-

Anne,c A - Growth Rates ......

Introduction ...... 35 Measurement of Growth . . . . . 35 &ipirical Proof ...... 37- Continued TABLE OF CONTENTS (CONTtD)

Charts Included in Tort Page

1. World: Wool Production, Number of Sheep and Output per Sheep 5

2. Free World: Wool Production, Number of Sheep, and Output 6 per Sheep

3. Communist Bloc: Wool Production, Number of Sheep, and Output 7 per Sheep

4. World: Synthetic Fiber Production 20

5. Selected Areas: Synthetic Fiber Production 21

6, United States: Prices for Orlon, Dacron, and Wool 30

A-1 Wool Production: Actual and Trend Values for Selected 38 Countries

STATISTICAL APPENDIX 40 - SUNNARY

Since the end of World War II production of wool has grown at an annual rate of about 3.3% a year, while consumption of wool has grown at about 1.9% a year. Much of the growth in production and the growth in consumption has occurred in the Communist Bloc. Free World Production of wool has grown at a rate of about 2.6% a year while consumption has growm at about 1.3%, compared with growth in population of about 1.8%. Per capita consumption of wool in the Free World has declined during the post World War II period from about 3.1 pounds in 1948 to 2.7 in 1960.

Despite the rapid increase in production in the Communist Bloc, about 7% a year, consumption has grown even faster - rising at a rate of about 8.5% a year. As a result of the more rapid growth of consumption, imports by the Communist Bloc from the Free World have increased rather steadily since 1948. Although little is known about the forces which affect wool consumption within the Communist Bloc, it appears likely that wool consumption will continue to increase more rapidly than wool production.

Synthetic fiber consumption grew very rapidly during the 1950's and will continue to grow rapidly during the 1960's. The growth in synthetic fiber consumption is primarily responsible for the decline in per capita wool consumption in the Free WJorld. Consumer income has increased rather steadily since the end of World War II and wool prices have tended to decline rather steadily since the end of the Korean War. The effects of these forces, which otherwise would have caused higher wool consumption, were more than counter-balanced by the rise in synthetic fiber consumption.

From 1950 to 1960, world production of synthetic fibers increased by almost 900% - rising from 153 million pounds to 1,565 million. By 1963 production is expected to be more than double that of 1960. More than 93% of the world's production has been, and through 1963 will continue to be, manufactured in the Free World.

Costs of manufacturing synthetic fibers in relation to selling prices are quite low. The low cost-price ratio has stimulated rapid expansion of manufacturing capacity. In addition, prices for synthetic fibers have been maintained at a competitive level with prices for wool. Because the synthetic fiber producing industry has many elements of monopolistic competition, prices for synthetic fibers have shown only moderate declines. With the low cost-price ratio, sharper declines probably would have occurred if the industry were not characterized by relatively few firms and administered prices. Much of the increase in Free World wool production was caused by higher efficiency in sheep raising. The higher efficiency has resulted in more sheep per acre of pasture land and, in some of the lower yielding countries such as South Africa, more wool per head of sheep. Further improvements in the efficiency of producing wool probably will be developed in the future. Improvedefficiency in wool production has largely offset the rise in the prices paid by sheep farmers in Australia and New Zealand. Despite the steady rise in the prices paid by farmers, sheep farming has continued to be the most profitable farming enterprise in the sheep ranching areas of these two countries.

Prices for wool generaIly have declined since the Korean War. Actual prices reached their peak in 1951 and real prices were at their high point in 1950. In 1960, the annual average price for 64ts/70's at London in real terms was 48% of the 1950 average. The actual price was 44% of the 1951 average. Prices increased slightly in 1961 and the real price was 49% of the 1950 average.

In general, the differentials between the lower quality and higher quality wools have been narrowing since 1952. At Australian auctions in 1956, for example, 50's were about 49% of the price of 64bs good combing. In 1960, this proportion was about 75%. A similar movement occurred for prices for 56's, rising from about 60 to 81% of the price for 64ts from 1952 to 1960. It appears, however, that this narrowing of differentials has about run its course. Additional narrowing of significant proportions probably will not occur.

By 1970 per capita consumption of wool in the Free World may be slightly higher than in 1960. In general, this projection assumes relative increases in consumer income of the same or somewhat smaller magnitudes than occurred during the 1950's, some decline in wool prices, and synthetic fiber production in the Free lTorld three to four times that of 1960. Although synthetic fiber consumption will rise rapidly in the decade of the 1960's, its percentage increase is expected to be only about 1/3 of its percentage increase in the 1950's. The rising consumption of synthetic fibers in the 1960's probably will not depress the consumption of wool as much as it did in earlier years.

Under these circumstances wool consumption per capita would increase slightly. Increases in Free World population would cause considerably larger wool consumption. By 1970 Free W4orld wool consumption would be 3,002 to 3,206 million pounds (clean basis) compared with 2,h72 million pounds in 1960. In addition, exports to the Communist countries probably will be more than 200 million pounds. Total wool requirements from Free World producers would be about 3,200 to 3,h00 million pounds, 23 to 31% above 1960 and would have a growth rate of 2.1 to 2.7% a year. Production in the Free World would increase at a rate of about 2.5% per annum. Thus, production is expected to increase at approximately the same rate as demand for wool. By 1970, production in the Free World would be about 5,700 million pounds, greasy basis, or equivalent to approximately 3,300 million pounds, clean basis. In 1961, production was approximately 4,5 80 million pounds, greasy basis, or 2,637 million, clean basis. - 3 -

Prices for wool will tend to decline, principally because of the pressure from synthetic fibers. Declines in prices for synthetic fibers are expected to be moderate because of the very limited competition within the synthetic fiber producing industry. Large capital investments are required for expansion and there are relatively few firms engaged in producing synthetic fibers. Therefore, the industry probably will continue to be one characterized by many elements of monopolistic competition, one of which is administered prices.

The decline in prices for wool probably will be mild. The fall probably will be close to 1% a year. Thus by 1970, in terms of the 1961 general price level, prices for 6hts/70's at London may be around 90 pence. This price compares with 99 pence in 1961e - 4 -

CHAPTER I

Wool Production

World production of wool has been increasing steadily since the end of World War II. Production in 1961 of 5.7 billion pounds was the largest production since the end of World War II and was 49% larger than average annual production from 1934 to 1938. (See table lo) From 1948 to 1961 wool production in the world increased at an annual rate of about 3.3?/1 a year. (See table 2.)

For the world, as a whole, sheep numbers increased at an annual rate of about 2.1% and output per head of sheep increased at a rate of 1.3% a year. (See tables 3 and 4, and Figure 1.) Rapid rates of increase in sheep numbers occurred in the Communist Bloc, the United Kingdom, Australia, and New Zealand. Australia and New Zealand have relatively high yields of wool per sheep while the Communist Bloc and the United Kingdom are below the world average.

Distribution of Wool Production

Wool production in the Communist countries expanded more rapidly than in the Free World, rising by about 132% or 0O6 billion pounds (greasy basis) from 1948 to 1961. In 1948, the Communist countries produced about 12/o of world production, but by 1961 their share had grown to about 19%, The rate of growth in the Communist Bloc from 1948 to 1960 was about 7.0% per annum, compared with 2.6% in the Free World. Despite the faster rate of growth in the Communist Bloc production in the Free World in 1961 was still more than 4 times that of the Communist countries. (See table 1.)

Production of wool in the Free Wnorld increased by 36% or 1.2 billion pounds from 1948 to 1961. (See Figure 2.) Seven countries produce about 80% of the Free World's wool output. These seven countries are Australia, New Zealand, Union of South Africa, the United Kingdom, the United States, Argentina and Uruguay. Of these countries increases in wool production were most rapid in Australia and New Zealand, about 4.0% a year in each country. Production expanded at rates of 2.8, 3.4, and 1.1% a year in the Union of South Africa, the United Kingdom and the United States, respectively. It showed no significant trend in Argentina and Uruguay. In 1961, Australia, New Zealand, the United Kingdom and the Republic of South Africa had larger shares of Free World production than in 19488, but the shares of other major producing countries were smaller or the same. (See table 5.) g/ Growth rates throughout this report are derived from fitting an exponential curve y = arx. In this equation r is the rate of growth. A comparison of this method of measuring growth with the terminal point method is given in Annex A. -5- FIGURL I WORLD: WOOL PRODUCTION, NUMBER OF SHEEP, AND OUTPUT PER SHEEP 8,000 a

7,000

,, 6,000 z o 5,000 0 z-n . ~WOOL PRODUCTION _ (MILLIONS OF POUNDS) J ____JS' < ~~~~~~~~~~~LEFTSCALE

40001f -0

3,000~~~~~~~~~~~~~~~~~I~ ~

9 _07

800 -NU MBE'---NMBR OF SHEEP8 a. __^SMILLIONS OF SHEEP) J 70 ,. -- LEFT SCALE 7

__ en 700 _ __ z 6 o ~______. ______-___ , (n 600 6 50 ~~~~~~~~~~~~~~~~~~~5 WOOL PRODUCTION PER SHEEP (POUNDS) RIGHT SCALE --

400 4

300 1 I I 33I '48 '49 '50 '51 '52 '53 '54 '55 '56 '57 '58 '59 '60 '61 (Prelim)

IBRD -Economic Staff 2013 -6- FIGURE 2 FREE WORLD: WOOL PRODUCTION, NUMBER OF SHEEP, AND OUTPUT PER SHEEP 6 ,500 I I I I ' I 6,000

5,000 2 0 o 4,000

200

0 ,0

3,000 1 0~~~~~~~~~~~~~ (MILLIONS OF SHEEP}S) / < ~~~LEFT SCALEI

900 9

800 S____ NUM8ERE OFSHEEP _____NM 8 (MILLIONS OF SHEEP) 700 SCALERGLEFTA7E

u- 600 --- 6

0 a-400 WOOL PRODUCTION PER SHEEP 7

-' 500 I (POUNDS) 1 __

'48 '49 '50 '5I '52 '53 '54 '55 '56 '57 '58 '59 '60 '61 (Pre5m.) IBRD - Economic Staff 20141 - 7- FIGURE 3 COMMUNIST BLOC: WOOL PRODUCTION NUMBER OF SHEEP, AND OUTPUT PER SHEEP 1,500 1 1 X | l X | | u _ 15

WOOL PRODUCTION (MILLIONS OF POUNDS) \ ,

i,000 LEFT SCALE to

900 9 z8 0 8005 5

IL o 700 7 zto 0 -J

500 5~~~~~~~~~~~~~~~

400 44_ WOLPRODUCTION PER SHEEP l (POUNDS) RIGHT SCALE

300 3

NUMBER OF SHEEP _ (L (MILLIONS OF SHEEP) . w 200 2 z 0

100II I I II I I II '48 '49 '50 '51 '52 '53 '54 '55 '56 '57 '58 '59 '60 '61 (Prelim.) IBRD - Economic Staff 2015 - 8 -

Minor producing countries as a group produced around 20a of Free World production from 1948 to 1961. All of the minor producing countries produced less than 100 million pounds of wool a year each, with the exception of Turkey from 1959 to 1961.

Production in Turkey increased rather steadily during the post- World WrTar II years and reached 105 million pounds in 1961, compared with a low of 67 million pounds in 1950. The rate of growth in wool production in Turkey from 1948 through 1961 was about 3.3%. a year.

Production in Brazil also has shown an upward trend, rising from about 40 million pounds in 1948 to approximately 67 million pounds in 1960. The rate of growth was about 4.7% a year. (See table 6.)

In Spain, production declined from 1948 to 1951, but production has stabilized at the lower level in recent years.

Production in other minor producing countries has not shown a persistent upward trend. In some of these countries data are not very good. Some of the apparent changes in wool output may simply reflect efforts to improve the accuracy of data rather than a true change in production.

Data on production by country within the Communist Bloc are not available before 1953, but most of the enlargement of output since 1953 occurred in the U.S.S.R. The U.S.S.R.'s output increased by about 253 million pounds or 50% from 1953 to 1961. China's output was up about 52 million pounds or 42% over the same period. There may be some over-estimation of production, particularly for China and Eastern Europe. The increase in production in the Soviet Bloc was caused principally by larger sheep numbers. (See figure 3.) Nevertheless, there were significant increases in the output of wool per sheep (discussed below).

Sheep Numbers

About 2/3 of the growth in world wool production in the 1948-60 period was caused by larger sheep numbers. The number of sheep in the world has been increasing at an annual rate of about 2.1% a year, compared with the growth rate for production of wool of 3.3%. The rest of the growth in wool production was caused by larger output per head of sheep, discussed below. (See figures 2 and 3).

The Communist Bloc has shown a more rapid increase in sheep numbers than has the Free World, 5.8 and 1.1% per annum, respectively. (See table 3.) Despite the rapid rate of growth in the Communist Bloc, the number of sheep in this group of countries in 196 @ was only about 35% of the number in the Free World. (See table 7.)

The growth in sheep numbers in the seven major wool producing countries of the Free World falls into two distinct groups. Sheep numbers in Australia, New Zealand, and the United Kingdom have been

I/ No data are available for subsequent years. increasing at an annual rate of better than 31% since the end of Wlorld War II. Sheep numbers in the other four major producing countries have shown erratic movements, but there were no persistent trends toward larger sheep population.

Among the minor producing countries, sheep numbers have shown a persistent upward trend in Turkey, Brazil and Spain. In the first tlwo, wool production has also tended to increase (as explained above), but the increase in sheep population in Spain has not caused larger wool production. Apparently, there has been a shift in this country toward sheep which produce meat but which are not large wool producers. (See table 8.) Sheep numbers in other minor producing countries have not shown a persistent upward trend.

For the countries which are not large enough wool producers to have data shown individually in Tables 7 and 8, sheep numbers declined from 1948 to 1960. However, the sheep population increased from 1948 to 1954, and declined rather sharply thereafter.

Output of Wool Per Head of Sheep

In recent years world output of wool per head of sheep has averaged around 6 pounds. (See table 9.) Average output in 1960 was about 13% above 1948 and output has tended to increase by about 1.3% a year./ (See table 4.)

The output per head of sheep has varied widely from country to country. The Communist Bloc had an average production of about 4.7 pounds per head, compared with 6.6 pounds for the Free World, in 1960. The average rate of increase for the Communist Bloc of 1.6% was slightly above the average rate for the Free World. However, statistical errors in the data probably are larger than the difference. For all practical purposes, the two rates of increase are about the same. (See table 4.)

Among the seven major countries of the Free World, New Zealand has consistently shown the highest production per head of sheep, followed by Australia, the United States, and the Republic of South Africa. The United Kingdom has the lowest production per head of sheep of any of the seven major producing countries. (See table 9.)

The fastest rate of increase has occurred in the Republic of South Africa with an average yearly increase of about 2.8%. (See table 4.) In 1948, the output per head in the Republic of South Africa was smaller than in Argentina and the United States. Because of the rapid rate of increase, output per head in 1959 in South Africa was about the same as in Argentina and the United States.

/ The growth rate for the world does not fall between the growth rates for the Free World and the Communist Bloc because of the algebraic relationship of averages. -10 -

The rates of increase in Australia and New Zealand have been small. The slow rate of increase is, however, associated with a high starting level. In 1948 the output per head of shsop in New Zealand was above the 1960 rate for any oLher country and Au:tralials 19h8 level was above the 1960 level of any country other than New Zealand and the United States.

Among the minor producing countries, wool production per head declined in Iran and Spain and increased in Brazil and the "Others" category. (See table 10.) As indicated above, the decline in output per head in Spain occurred at the same time that the number of sheep increased. Such a situation indicates that the additional sheep were meat producing rather than wool producing types. The declines in Iran and Spain were at rates of about 2.7 and 3e0% a year, respectively. The increases in output per head in Brazil and "Others" were at rates of about 1.6 and 2.6% a year.

Effects of Prices and Cost of Production

So far as can be determined, prices for wool have had little effect on the production of wool in the post-World War II period. Logically, declines in prices for wool would be expected to cause smaller wool production. However, Free World wool production has increased rather steadily since 1948 and real prices for wool have tended to decline rather steadily since 1951. As is true for wool production, the number of sheep in the Free World did not decline as prices for wool fell. To the contrary, wool production and sheep numbers in Australia, New Zealand, and the United Kingdom increased rather steadily during the post-World War II period at the same time that real prices for wool declined.

Prices for wool may not be highly correlated with wool production because of the joint product nature of wool production and because of the growth in sheep numbers caused by steadily increasing efficiency in sheep farming. Although many sheep are raised primarily for their wool, there are many others which are raised primarily for their meat. Both types, of course, produce wool and eventually are slaughtered for meat. Theoretically, higher prices for lamb carcasses would cause larger sheep numbers and vice versa.

Prices for lamb increased from 1951 to 1960. Wholesale prices for New Zealand lamb carcasses in the U.K. increased by about 52% over this period. The peak price of 26.8d. per pound was reached in 1957. Declines occurred in 1958 and 1959, but there was a substantial recovery in 1960. (See table 11.) Preliminary data for 1961 indicate lower carcass prices than in 1960. The price increases for carcasses during the 1950's should have had a tendency to cause larger sheep numbers. -11 -

Wool prices increased sharply to 1951 when 64ts/70ts (clean basis) at London Auctions sold for an average price of about $2.63 (U.SO) per pound. In contrast to prices for lamb carcasses, prices for wool have tended to decline since 1951 but have been somewhat erratic in their downward movement. In 1960, the price for the quality mentioned above was 56% below the 1951 price.

In an effort to determine the relative effects of prices for meat and wool on sheep numbers multiple regressions were run using the following variables:

X1 = sheep numbers X2 = real price for wool at London X3 = real price for lamb carcasses at London X4 = time Separate analyses were made for the world, New Zealand, and Australia. Analyses were tried with both prices (X and X3) leading sheep numbers (X1) by one year, with one price (X2 or X) leading by one year, and with all variables covering simultaneous time periods. The coefficients (effects of) for prices for wool and lamb carcasses were not significant or the coefficients showed illogical signs in all of the analyses. Time accounted for about 90% of the variation in sheep numbers in the world, Australia, and New Zealand.

The high relationship between time and sheep numbers was probably caused by increasing efficiency in sheep growing. The large correlation coefficient also indicated that the use of past growth rates for forecasting changes in sheep numbers would be a relatively sound procedure. Historical series showing changes in efficiency of sheep ranching, which are suitable for use in regression analyses, are not available.

The effect of changing cost of production on wool output is not clear for several reasons, including scarcity of data on the cost of producing wool and the profitableness of alternative opportunities. There has been some work done in Australia and New Zealand on the cost of producing wool on a few farms with specified characteristics, but it is doubtful if the results of studies in these two countries are applicable to other countries. In addition, studies which are made for selected farms in New Zealand may not be applicable to other farms unless the sample is carefully designed and drawn; and the same can be said of Australia. Nevertheless, a general idea of the changes in costs of production and alternative farm opportunities can be obtained by examining the Australian and New Zealand studies. New Zealand raises sheep for both meat and wool. Therefore, the prices for both products in relation to costs affect the profitableness of the sheep industry and its profitableness in relation to the profitableness of alternative farm enterprises. An annual index of the cost of production in the sheep industry is published by the New Zealand -12 -

Meat and Wool Boardfs Economic Service. / The index includes 15 items covering wages, operating costs, capital charges, and land charges. There are indexes for three types of farms - high country, low country, and fattening farms, From 1951 to 1961, the indexes increased each year. In the first quarter of 1961 the indexes were about 35 to 40% above the indexes ten years earlier. (See table 12.)

The index of prices paid by farmers in Australia shows the same type of data as the New Zealand index. It too has increased each year since 1951, rising about 40% from 1951 to 1960 and about 42.5% from 1951 to the first quarter of 1961. (See table 13.)

In a study of the cost and returnsfor sheep ranching in Australia, MouldenC/reports the costs for a merino wool growing property over a number of years. Net farm income per sheep in 1958-59, the last year covered by the study, was the lowest for any period shown. However, the cost per sheep was the lowest of all the periods covered except the very earliest, 1946-47 to 1949-50. The low net farm income per sheep in 1958-59 was primarily caused by low returns from wool sales. In a study in New Zealand, Warner._/found a similar pattern. The net income per head of sheep in 1958-59 was the lowest since 1953-54. Again, returns from wool sales were relatively low in 1958-59. Expendi- tures per sheep declined steadily from 1954-55 through 1959-60.

The two studies mentioned above indicate that expenses per head of sheep on the farms studied have declined over the past few years despite the rising indexes of prices paid by farmers. This phenomenon indicates that the efficiency of sheep farming in Australia and New Zealand has improved. Improved pastures, better breeding practices and better parasite and disease control are primarily responsible for the greater efficiency. Pastures now carry more sheep per acre and there is less cost in breeding. Formal statistical analysis measuring the effects of various economic fcrces on wool production and sheep numbers would require a variable measuring changes in efficiency of sheep farming. A time series measuring such changes for any major wool producing country, as a whole, is not

g New Zealand Meat and Wool Boards Economic Service, Annual Review of the Sheep Industry 1960/61, Publication No. 309, August 1961, page 36.

2 Moulden, J.O., "Merino Woolgrowing and Fat Lamb Production," Quarterly Review of Agricultural Economics; Bureau of Agricultural Economics; Canberra, A.C.T.; April 1960, Volume XIII, No. 2. / Warner, A.O.; Sheep Farming in Central Otago 1959-60; New Zealand Meat and Wool Board's Economic Service, Bulletin No. 10, December 19661. - 13 -

available. Furthermore, for other countries there are not even cost of production studies similar to those made for Australia and New Zealande

Future Production

Over the next several years the factors affecting wool production will probably continue to show the same trends as in the recent past. Therefore, the assumptions on which wool production was projected for 1970 are based upon the following qualitative judgments derived from recent experience:

1. Trends toward improvement of efficiency in sheep farming will continue;

2. Trends toward higher prices paid by sheep farmers will be more than offset by greater production efficiency;

3o Because of assumptions 1 and 2, trends toward larger sheep numbers per acre and in the aggregate in Australia, New Zealand, the United States, the United Kingdom and Turkey will continue;

4h The output of wool per head of sheep will not be greatly different in the higher yielding countries from that of 1960 but increases may occur in some of the lower yielding countries. World output per head will increase some, principally because of relatively larger numbers of sheep in the high yielding countries and, to some extent, because of higher yields per head in some of the other countries;

5. Prices for wool, in real terms, will decline slowly - about 1% a year. (See page 32,below.);

6. Wool production in the Communist Bloc will continue to grow, but at a somewhat slower rate than the 7% a year of the recent past. Since the Communist Bloc's consumption is also expected to grow at a rapid pace, the Communist Bloc will remain a net importer of wool from the Free World.

On this basis wool production in the Free World would increase at about the same rate as it has since 1948, about 2.6% a year. By 1970, production would be in the neighborhood of 5,750 million pounds, greasy basis, or 3,300 million pounds clean basis, - 14 -

CHAPTER II

Consumption Trends

Growth of Wool Consumption in the Past

Aggregate consumption of wool in the world in the post-World War II period showed a rising trend and in 1960 is estimated to have been about 3,214 million pounds (clean basis). / The 1960 consumption was about 26% larger than consumption in 1948 TSee table 15.), but, since world population increased by the same percentage, per capita consumption remained at the same level -- 1.1 pounds.

The lack of growth in per capita wool consumption is related to developments within the fiber and textile fields, Wool in any of its uses competes with the other major fibers used in textiles. These fibers are cotton, the cellulosic manmade fibers (rayon) and the non-cellulosic manmade fibers 2/ (called synthetic fibers in the rest of this paper). Other fibers used in manufacturing textiles, such as flax and silk, are only of minor importance.

WJool is used principally to manufacture apparel of various kinds and to manufacture house furnishing textiles, such as carpets, upholstery fabrics, and drapes. Although there are many qualities of wool, there are two main divisions of the commodity -- apparel wool and carpet wool. Carpet wool is used principally to manufacture floor coverings and apparel wool is used for all other uses. Unfortunately, data on the consumption of apparel and carpet wool are not separately available in most countries. Such data are available for the United States and the significance of the U.S. experience is discussed below. (See page l;.)

When wool is shorn from sheep it contains natural grease and foreign matter such as burrs and twigs. Before wool can be processed by mills, it must be cleaned through a washing or scouring process. The loss in weight from the greasy to the clean stage varies depending on the type of wool. All data on consumption in this paper are on a clean basis, unless otherwise noted.

2 The non-cellulose manmade fibers are considered in this paper as a group, but there are many chemical formulas which are included in the group. None of them use cellulose as a raw material. Data on WATool Consumption and Data on Forces Affecting Wool Consumption

The consumption of fibers in any one country is determined by several economic forces working simultaneously. The principal forces which appear to determine fiber consumption are consumer income; real prices for fibers and textiles; and, in the short run, the inventory position of textiles. The distribution of total demand between the various fibers is determined by relative prices and relative quality characteristics.

The qualities which wool possesses and which are generally considered desirable are warmth, resiliency, and durability. Cotton is not warm enough seriously to compete with wool. The cellulosic manmade fibers are not resilient nor do they wear well and they are not serious competition for wool. However, the synthetic fibers do possess qualities which make them serious competitors for wool. Many synthetic fibers have resiliency and have warmth retaining qualities. Furthermore, it takes fewer pounds of manmade fibers than wool to cover a specified area.

In analyzing the prospects for wool consumption, measures of the effects of variations in consumer income, wool prices, and synthetic fiber consumption i/ on wool consumption are needed. Logically, wool consumption should vary in the same direction as movements in consumer income and the opposite direction to movements in wool prices and synthetic fiber consumption.

Population growth has a tendency to cause aggregate wool consumpton and consumer income to increase simply because more people create more demand, other forces remaining equal. Thus, there is a tendency for wool consumption to increase over time. This trend tends to mask the effects of changes in economic forces. Therefore data on wool consumption and consumer income are expressed in per capita terms in order to eliminate the effects of rising population in analyzing the forces affecting wool consumption.

Data on mill consumption of wool in individual countries in the post4-World lWfar II period are available. (See table 14.) However, the mill consumption of wool within an individual country may not be a true indicator of the demand caused by economic forces originating within the country. WIool textiles are traded in fairly large volume between countries. In some countries, textiles manufactured from wool are exported in large volume and small quantities of wool textiles are imported. (See table 33.) In such cases the consumption of wool by consumers within the country is actually smaller than mill consumption. In other countries the reverse situation occurs. Mill consumption of wool within an individual country should be adjusted for imports and exports of wool textiles. Wool consumption after such adjustment is termed "domestic consumption" in the remainder of this report.

1/! It would be preferable to use prices for manmade fibers to indicate the competitiveness of such fibers with wool, but adequate price data are not available. - 16 -

The Food and Agriculture Organization of the United Nations has made such adjustments for most countries in the World. Data from FAO / are used to determine domestic consumption per capita for the various areas of the world except for the United States. Data on both domestic wool consumption and demand functions for the United States are published by the U.S. Department of Agriculture2/ and are used in this reporto (See page 18.)

The United States, Western Europe, and Japan manufacture about 80% of the Free World's wool textiles. (See table 15.) The Communist countries consumed another 742 million pounds in 1960, or 23% of the world's mill consumption of wool in that year. This percentage has been growing steadily since the end of lWorld War II. In 1948, mill consumption in the Communist Bloc comprised about 11% of the world total.

WIorld consumption of wool increased from about 2.6 billion pounds in 1948 to approximately 3.2 billion in 1960. The Communist Bloc accounted for 468 million pounds of the world rise of 662 million pounds. The increase in wool consumption in the Free W4orld from 1948 to 1960 was about 194 million pounds or about 8.5%. (See table 14.) Over the same period population in the Free World increased about 2L%. Because of the more rapid population increase, consumption of wool per capita in the Free World declined - falling from 3.1 pounds (clean basis) to 2.7 pounds.

Causes of Changes in Wool Consumption in the Free World

The decline in per capita consumption in the Free World has occurred despite increases in real GNP per capita in Western Europe, Japan, and the U.S. and despite generally declining prices for wool since the early 19>C)'s. (See tables 16 and 19.)

Furthermore the per capita consumption of all fibers in the Free World has also been increasing. Consumption of cotton, wool and manmade fibers increased from 9.8 pounds per person in 1948 to 11.6 pounds in 1960, an increase of 18.4%, about 1.3% per year. The consumption of

1/ FAO per capita data are 3 year centered moving averages. Such averages are not suitable for demand analysis. Therefore, the aggregate domestic consumption data published by FAO for each year were used to develop per capita domestic consurmption data for each year.

/ Donald, James R.; LaLienstein, Frank; and Simon, Martin S.; The Demand for Textile Fibers in the United States; in the process of being published by the U.S. Department of Agriculture. - 17 -

synthetic fibers increased more rapidly than consumption of all fibers, rising by about 29.5% a year. (See tables 17 and 18.) Synthetic fibers substitute for wool in many uses and their impact has probably caused wool consumption to decline.

Furthermore, there is evidence that a pound of manmade fibers substitutes for more than a pound of wool.

The U.S. Department of Agriculture states,i/ "In many cases, where competition exists among fibers for use in a given textile product, it is not on a pound-for-pound basis. Varying fiber characteristics and differences in processing loss tend to make this the rule rather than the exception. A case in point is fiber used in the manufacture of tire cord. For tire cord (x) pounds of one type and (x-y) pounds of another produce what may be considered an equivalent product from the standpoint of use. Hence, to assess more properly the competitive relationship and relative importance of the major textile fibers in the market place, it is necessary to express their consumption in comparable terms. Certainly such calculations are appropriate in making price comparisons and probably would be made by prospective purchasers. Moreover, this approach provides a means for studying fiber consumption in the aggregate on a more homoge- nous base and for measuring more closely the 'true' effect of fiber substitution."

For the Free World as a whole, consumption of manmade fibers has grown at an extremely rapid pace. Increases in the use of synthetic fibers, the type of manmade fibers which compete with wool, have been especially sharp since 1950.

Data on mill consumption of synthetic fibers are not available. However, producers of these fibers hold very small stocks and production data give close approximations of consumption. From 1950 to 1960, production of synthetic fibers increased by almost 900%o and by 1963 production is expected to be more than double that of 1960. Production in 1950 was about 148 million pounds or about 6% of wool consumption, clean basis. In 1960, Free World production of the non-cellulosic manmade fibers was approximately 1,475 million pounds, about 60% of wool production. In 1963 production of close to 3,100 million pounds is expected or approximately 650 million pounds more than wool consumption in 1960. (See table 20.) If the data on synthetic fiber consumption were adjusted for the utility concept, (i.e., the pounds of wool required to replace a given quantity of synthetic fibers), explained above, production of synthetic fibers in wool equivalent pounds in 1960 was about 70% of wool consumption and in 1963 would be about 47% larger than wool consumption in 1960.

/ See: Donald, Lowenstein, and Simon. The lack of grorth in per capita consumption of wool in the Free World has been largely caused by the rapid growth in synthetic fiber consumption. This growth has been so quick that it has overshadowed increases in income or gross national product and declines in wool prices.

A study published by the U.S. Department of Agriculturel/shows the followiing equations for apparel wool consumption in the United States:

(1) Log X1 = .18 + .34)log X2 - .32 log X3 - .28 log Xi (.09) (.13) (.o6)

- .31 x5 (.o4) Xi = Domestic consumption of apparel wool per clothing expenditure unit.J/

X2 = Deflated personal disposable income per capita.

X3 = Price of Australia 64's, 70's good top making clean basis at Boston deflated by the Wholesale Price Index leading 6 months.

X4 = Domestic consumption of non-cellulosic staple fibre per capita.

X5 = Deviations from normal of the ratio of stocks to unfilled orders for wool apparel fabric.

This equation explained 91% of the variation in apparel wool consumption in the United States. Another analysis gave good results for the carpet wool segment of wool consumption in the United States, accounting for about 88% of such consumption in the U.S. The equation is:

(2) Log X1 = -1.83 + .86 X2 - .41 log X3 - .26 log X4 (.10) (.07) (.05)

X= Domestic consumption of carpet wool per clothing expenditure unit../

X2 = Deflated disposable income per capita.

X3= Deflated annual prices per pound, Buenos Aires, 5's and 6's clean basis, leading 8 months.

X4 = Deviations from normal of the ratio of stocks to unfilled orders for wool apparel fabrics.

1/ See. Donald, Lowenstein, and Simon.

2 Clothing expenditure units are population adjusted for age and sex distribution. The weights for such adjustment were derived from relative expenditures for textiles by various age and sex groups. - 19 -

Since the wool consumption equations are in log log form, the coefficients also are elasticity coefficients. The equations give elasticity for income, price and substitution (substitution of synthetic fibers). The U.S. apparel wool equation shows that a 1% change in per capita disposable income caused, on the average, a 0.3b% change in the same direction in consumption of apparel wool per consumer expenditure unit. Similarly a 1% change in the price for wool caused a 0.32% change in the opposite direction in wool consumption. A 1% change in synthetic fiber consumption caused an 0.28% change in the opposite direction in wool consumption. Personal disposable income per capita increased rapidly from the end of IWorld War II to 1960 and prices for wool declined thus, giving a double barreled stimulus to larger wool consumption. At the same time synthetic fiber consumption increased so sharply that it depressed wool consumption and more than counteracted the stimulating effects of income and price. Synthetic fiber production in the United States increased from 122.4 million pounds in 1950 to approximately 677.2 million pounds in 1960. By 1963 production is expected to be about 86% above that of 1960. (See table 20.) Primarily, because of the rapid increase in synthetic fiber consumption, wool consumption per capita in the United States declined. WJool consumption/ per capita in the United States declined from 4.6 pounds in 1950 to about 3 pounds in 1960 and 1961. At the same time synthetic fiber consumption increased from 0.9 pounds per capita to 4.6 pounds.

In other countries and areas of the world experience seems to point to the same phenomena as has occurred in the U.S. Data are not available wl4oh permit the same type of demand analysis as that made for the U.S.-/ Nevertheless, the evidence indicates that wool consumption in the U.K., 14estern Europe, and Japan is and will continue to be strongly influenced by synthetic fiber consumption. j/ Apparel plus carpet wool. i/ Analyses similar to those described for the U.S. were tried for the U.K., France, Italy, WTestern Europe as a whole, and Japan. However, limitations of data for these areas prevented successful conclusion of the analyses. Some of the difficulties were: 1. Lack of data on wool consumption for the inter-war years limited the number of observations. Data for the post-war years did not provide sufficient degrees of freedom to permit statistically significant analyses. 2. Data on the consumption of carpet and apparel wool in countries other than the U.S. were not available even for the post-Wlorld War II years. The economic relationships for these two types of wool dif- ferred significantly in the U.S. and probably in other areas too. 3. Data on wool and synthetic fiber consumption may contain considerable error, which might make significant analyses impossible even if the other difficulties could be overcome. (See page 23, below.) -20- FIGURE 4 WORLD: SYNTHETIC FIBER PRODUCTION (MILLIONS OF POUNDS) 10,000 I I I I I I 10,000 9,000 9,000 8,000 8,000 7,000 7,000 6,000 6,000 5,000 5,000

4,000 4,000

3,000 3,000

2,000 | / 2,000

1,000 1,000 900 900 800 800 700 Z 700 600 ,o e!4 600 500 / 500

400 . / 400

300 oe ~~~~~~~~~~~~300

200 / 200

100 I I I Il 100 '50 '51 '52 '53 '54 '55 '56 '57 '58 '59 '60 '61 '62* '63*

*Estimated capacity. IBRD- Economic Staff 2016 -21- FIGURE 5 SELECTED AREAS: SYNTHETIC FIBER PRODUCTION (MILLIONS OF POUNDS) 2,000 2,000

U.S 1,000 J._S._7____1,000 800 800

600 - *e' v 600

400 400 300 _ 300

/ ~~~~WESTERN .000, 80o' f/ so

100 10

60 6

4 4

'50 '51 '52 '53 '54 '55 '56 '57 '58 '59 '60 '61 '62* 63* * Estimnoted capacity.

IBRDO- Economic Staff Z017 - 22 -

Synthetic fiber production in Western Europe, Japan, and the U*K., was at very low levels in 1950. Since 1950, it has increased at very rapid rates. From 1957 to 1960, production almost doubled in the U.K., better than doubled in Western Europe, and almost tripled in Japan. Plans for 1963 indicate continued rapid growth with production more than doubling in Western Europe and Japan and almost doubling in the U.K. (See figures 4 and 5.)

The rapid increases in synthetic fiber production and consumption during the 1950's probably account for the tendency in wool consumption per capita in the U.K. and Western Europe to level off in the latter half of the 1950's. (See tables 17 and 18.) In the U.K., synthetic fiber consumption per capita increased from about 0.2 pounds in 1950 to 2.6 pounds in 1960 and in Western Europe as a whole it increased from 0.1 to 1.5 pounds over the same period. These are increases of more than 1200 and 2200Wo, respectively, or annual rates of growth of 27 and 38%.

Real GNP in the U.K. increased by about 22% from 1950 to 1960 or at an annual rate of about 2.1%. In Western Europe the increase was about 43% or at an annual rate of approximately 3.6%. The growth in GNP would have tended to cause wool consumption per capita to increase, but the growth in synthetic fiber consumption was so much more rapid that it more than counteracted the effect of higher GNP.

Wool prices also tended to decline. In 1960 real prices for Australian 64ts/70's at London averaged 52% less than in 1950. Lower prices tended to stimulate wool consumption per capita.

However, the rise in synthetic fiber consumption was so sharp that it over-balanced the stimulating effects on wool consumption of both rising GNP and declining wool prices.

In Japan synthetic fiber consumption per capita rose from 0.1 pounds in 1950 to 2.6 pounds in 1960, an increase of more than 2500% or an annual rate of about 4V%a year. Despite the rapid increase in synthetic fiber consumption wool consumption per capita also increased rising about 425%, from about 0.05 to approximately 2.5 pounds per capita. (See table 16.) In Japan, GNP per capita more than doubled from 1950 to 1960 rising at an annual rate of 7.5%. Sharply rising income and perhaps some change in apparel styles within Japan probably account for the sharp increase in wool consumption in that country.l/ The combination of sharply rising income, falling wool prices and changes in apparel style probably caused wool consumption to increase despite the rapid rise in synthetic fiber production.

j/ Starting before World War II and continuing afterwards, the Japanese changed from their traditional style of dress to Western style. Western style apparel probably uses more wool than traditional apparel. - 23 -

As explained above, plans for the near future indicate a rapid rate of expansion in synthetic fiber production, particularly in Western Europe and Japan. It appears likely that additional expansion will occur in later years. Although the rate of growth may taper off in the late 1960's, production of synthetic fibers by then will be very large and, therefore, will continue to have a depressing effect on wool consumption.

Most of the world's synthetic fiber production occurs in the Free World. The Communist Bloc produced less than 6% of the world's output in 1960 and probably will produce less than 7% in 1962. Furthermore, most of the Free World's production occurs in the United States, Western Europe (including the United Kingdom) and Japan - about 96% in 1960 and an estimated 9b% in 1962. The areas which are large producers of manmade fibers also house most of the Free World's wool consuming capacity. Thus, synthetic fibers are expected to continue in sharp competition with wool in the foreseeable future.

Prices for synthetic fibers have generally paralleled those for wool. Prices for synthetic fibers in the U.S. generally have been more stable than prices for wool, but prices for both types of fiber have tended to stay at about the same level since the early 1950's. (See figure 6 and tables 23 to 25.)

At recent price levels, synthetic fibers provide handsome profits to producers. According to Butler,l/ the cost of producing acrylic and polyester staple fiber in the United States in 1959 was 0.59 and o.89 cents per pound, respectively. Average prices for acrylic staple fiber, 2 to 5 denier, in 1959 was about $1.02 to $1.28 per pound, depending on the producing firm. Prices for polyester staple fiber averaged about $1.36 per pound. Prices declined some in 1961 and in December 1961 prices for acrylic staple fiber were $0.75 to $1.18 per pound and prices for polyester staple fiber were $1.24 per pound.

Even after prices declined in 1961, profits were still considerable. Although similar data are not available for other countries, profits are probably substantial for synthetic fiber producers throughout the world.

The 1 a r g e profits earned by producers of synthetic fibers contributed to the very rapid growth in world output of synthetic fibers in the 1950's and the planned doubling of production from 1960 to 1963, and point to a probable continuation of rapid growth for several years after 1962. (See figure 4.)

Wlith the large profit margin currently involved in synthetic fiber production, prices for these fibers could be reduced without causing losses or unduly small profits for the producing companies. Under such circumstances, prices for synthetic fibers probably will be reduced to the extent required to hold and expand markets for such fibers.

1/ Butler, C.0., "Fiber Mlanufacturing Processes, Economics and Engineering," Man-made Textile Encyclopedia, Textile Book Publishers, Inc., New York; 1959, Chapter II, page 54. - 24 -

However, the synthetic fiber producing industry maintains a high degree of administered prices (See page 31.) so rapid price declines are not expected.

Wool Consumption in the Communist Bloc

Consumption of wool in the Communist Bloc increased from about 274 million pounds in 1948 to approximately 742 million pounds in 1960. This represents an increase of about 171%.

Wool consumption per capita about doubled from 1948 to 1960, but was still less than a pound per person. (See table 16.) The average rate of growth was about 4.8% per year. Little is known about the forces within the Communist Bloc which influence wool consumption. Production of synthetic fibers is not large enough nor scheduled to become large enough to importantly effect wool consumption. In recent years the Communist Bloc produced about 85% of the wool it consumed.

Imports in 1959, the last year for which data are available, were less than 100 million pounds or less than b% of Free World production.

Wool production in the Communist Bloc is growing at a rate of about 7.0% annually, compared with a growth rate for aggregate wool consumption of about 8.5%. If the disparity in rates of growth continues, the Commu- nist Bloc will become a more important factor in the world wool market in the future than it has been in the past.

Future Wool Consumption

Projections in this section are made under the following assumptions for the ten years ending in 1970:

a) Real gross national production or national income per capita in the United States and Western Europe will grow at the following annual rates:

United States - 1.9% Western Europe - 4.0%

b) Real gross national product per capita in Japan will grow at a somewhat slower rate than in the recent past -- probably at around 5.8% a year.

c) Synthetic fiber consumption in the Free Wrorld will grow at a rapid rate and will tend to level off after reaching a level of 3 to 4 times the 1961 level of about 1.7 billion pounds in the late 1960's. Consumption in Western Europe and Japan will expand more rapidly than in the United States. Consumption of synthetic fibers in the United States was larger, relatively, in 1960 than in other parts of the Free World. The history of rayon consumption was one of very rapid growth for a number of years with a gradual slowing down in the growth rate as time progressed. During the 1950's, growth slowed sharply. The growth rate was sharp in the early years as rayon moved into the uses for which its qualities were outstandingly good. As these uses were filled its growth rate slowed. It appears likely that the growth rate for synthetic fibers will parallel the history of the growth rate for rayon.

d) Free WJorld population will continue to grow at an annual rate of about 2.0% a year.

e) Communist Bloc population will continue to grow at an annual rate of about 2.4% a year.

f) Consumption of wool per capita in the Communist Bloc will grow at a somewhat slower rate than the 4.8% a year of the recent past -- perhaps at about 4W7a year.

The rate of growth in the Communist Bloc since the end of World War II has been very rapid. The rapid rate of growith has caused imports from the Free World of wool to show a steady upward trend. Probably the Communist Bloc will attempt to dampen the rise by bringing the rate of increase in consumption more nearly in line with increases in production. Nevertheless,consumption in the Communist Bloc probably will continue to grow somewhat faster than production. Therefore, imports from the Free World will continue to grow, but at a somewhat slower pace than in the past.

g) Real prices for wool will decline slightly from 1961 levels.

h) Prices for synthetic fibers will remain competitive with prices for wool.

The projections for wool consumption per capita do not adjust for technological improvements in fibers. There have been several improvements introduced for wool in recent years, such as resistance to shrinkage and permanent creasing. Such improvements will help wool retain some of its markets. However, synthetic fiber producers are constantly introducing new fibers and improvements in existing fibers. At this point in time it is most difficult to assess the relative ad- vantages of prospective technological improvements for wool versus those for synthetic fibers. At the best, improvements for wool probably will no more than offset those for manmade fibers.

Because of the inadequacy of data, regression analyses which could be used for forecasting wool consumption in areas other than the United States could not be developed. (See footnote 1, page 19.) Under such circumstances estimates of future wool consumption in areas other than the United States are based upon the economic relationships for wool consumption which were determined for the United States and upon the judgment of the author as to reasonableness of the projections. Projections for the United States are based upon the regression analyses published by the United States Department of Agriculture.(See page 18.) - 26 -

The very rapid rise in GNP assumed for Western Europe probably will cause wool consumption per capita to hold at about its 1960 level or perhaps increase slightly, despite the assumed rapid growth in synthetic fiber consumption, Analysis of wool consumption in the United States shows that personal disposable income (closely related to GNP) is more important in determining wool consumption than either prices or synthetic fiber consumption. If a similar relationship is true for Western Europe, wool consumption per capita willbe maintained at least at the present level of 3.7 pounds per capita in 1970 and could rise about 8% to about 4 pounds per capita, depending on the exact level of synthetic fiber consumption (4.5 to 6 pounds per capita). Also, Europe historically has consumed more wool than the United States. 1/ There is little to indicate that this traditional relationship will be changed.

The projections of per capita consumption of wool in Europe are somewhat lower than that indicated by an elasticity coefficient of 0.67 for consumer expenditures published in a study of the International Cotton Advisory Committee (ICAC)e / However, the ICAC coefficient is for all fibers and the rapid increase in synthetic fiber consumption would account for much of the increase in fiber consumption. The result- ing per capita consumption of all fibers would probably be very close to that indicated by the ICAC study.

Under the population assumed for 1970, aggregate domestic wool consumption in Western Europe would be 1,293 to 1,398 million pounds in 1970, compared with 1,171 million pounds in 1960.

The very rapid increase in GNP assumed for Japan would probably cause a continuation of the rise in wool consumption, despite an assumed tripling or quadrupling of synthetic fiber consumption in the 1960's. Although westernization of clothing styles has already occurred to a large extent, some continuation of this trend probably will continue. Additional westernization of clothing style, although relatively moderate in relation to the past, will probably cause some increase in wool consumption.

Consumption of wool in 1970 in Japan would be about 3.0 to 3.5 pounds per capita, depending on the size of synthetic fiber consumption, compared with about 2.5 pounds per person in 1960. Total consumption of wool in Japan in 1970 would be 327 to 382 million pounds. Consumption in 1960 was 231 million pounds.

1/ The reason for this relationship has not been proven, but a damper climate and less central heating are suspected as important causes. g/ Secretariat of the International Cotton Advisory Committee; Prospective Trends in Consumption of Textile Fibers, WVTashington, March 1962, page bl. - 27 -

United States consumption of wool per capita in 1970 would be about 3.4 pounds, compared with approximately 3 pounds in 1960. Aggre- gate wool consumption in the United States in 1970 probably would be about 731 million pounds, compared with about 534 million in 1960. Projected consumption is largely based on the regression analyses for the United States explained on page 18.

Rising synthetic fiber consumption would hold the rate of increases in wool consumption to a moderate pace. However, synthetic fiber consumption developed somewhat earlier in the United States than in the rest of the world. The rate of growth in synthetic fiber consumption in the 1960's is expected to be smaller in the United States than in the 1950's- In addition, chemical treatments which give wool permanent creasing, wash and wear qualities, permanent moth proofing, and resistance to shrinkage are now being used commercially.

The slower rate of increase in synthetic fiber consumption, the use of chemical treatments to improve the quality of wool products, and a moderate increase in GNP are associated with a projected slow growth in wool consumption per capita in the United States as contrasted with a declining tendency during the 1950's.

The three main wool consuming areas of the Free World (Western Europe, the United States, and Japan) would consume 2,351. to 2,511 million pounds of wool in 1970, compared with 1,936 million pounds in 1960. These projections involve increases of 21 to 30% or 2 to 2.6% a year. If consumption in the rest of the Free World increased at about the same rate, it would consume 651 to 695 million pounds of wool in 1970. Consumption of wool in the Free World in 1970 would total 3,002 to 3,206 million pounds, compared with 2,472 million pounds in 1960.

Even though the rate of growth in wool consumption per capita in the Communist Bloc is assumed to be somewhat slower than in the past, production of wool may not increase as rapidly as consumption. It appears likely that wocl impor ts from the Free World will increase wad many exceed 200 million pounds (clean basis) annually by 1970.

Total demand for wool from the Free IWorld (consumption plus exports to the CoTmamuniT-h countries) would be approximately 3,200 to 3,400 million pounds aboi.t 23 to 31% above demand in L960 or an annual growth ra-te of 201 to 2,,7' a year. - 28-

CHAPTER III Prices

Prices for wool, generally, have declined since the end of the Korean War. In both actual and real terms they reached a peak in the early 1950's. Since then prices for 64's/70's at London, deflated by the Export Price Index of the United Nations (1955-57 = 100), have shown somewhat erratic but generally declining movements. The low annual average was reached in 1960 when the average was only 48% of the 1951 average. The actual price was 4L% of the peak of 1951. Prices in 1961 increased slightly and the average real price was 49% of the 1951 average. (See table 21.) The grades of wool mentioned above designate high quality wool. Quotations for lower qualities, such as 56's and 50ts show movements of a similar nature. (See table 22.) In general, the differentials between the lower quality and higher quality wools have been narrowing since 1952. At Australian auctions in 1956, for example, 50's were about 49% of the price of 64's, good combing. In 1960, this proportion was about 75%. A similar movement occurred for prices for 56's, rising from about 60% to 81% of the price for 6 4's from 1952 to 1960. It appears, however, that this narrowing of differentials has about run its course. Additional narrowing of significant proportions will probably not occur.

Even though actual and real prices have declined substantially since the peak of the early 1950's, the actual and real prices in 1960 were still well above pre-World War II levels. Since 1960, prices for the higher qualities have increased slightly and prices for the lower grades have declined slightly.

Theoretically, prices, for wool should be, in large part, determined by the supply and consumption of wool. In addition, synthetic fiber consumption would be expected to exert downward pressure on wool prices. Because data on consumption and production of wool contain much statistical error and because data on consumption of carpet and apparel wool are not available separately in most countries, (see footnote 2 on page 19 ), the effect of wool consumption and supply and consumption of synthetic fibers on wool prices could not be formally measured. One piece of evidence showing the error in the wool consumption and production data is the imbalance which exists in supply and disappearance data. Stocks of wool were computed by subtracting consumption from supply. There are quite wide differences between stocks so calculated (computed stocks) and reported stocks. At the start of 1951 computed stocks were about 531 million pounds smaller than reported stocks. On the other hand, at the start of 1953, computed stocks were 433 million pounds larger than reported stocks. The mean of the reported stocks from 1948 to 1961 was 1,157 million pounds. The standard error of deviation of the differences between the two series is about 239 million pounds or about 20 per cent - 29 - of the average reported stocks. Formal statistical analysis shows the difference between the two series to be highly significantol/

Such analysis indicates that there is large statistical error in the data on supply and distribution. As a result, attempts to develop multiple regression analyses for price forecasting purposes were not successful.

As explained above (pages 17 to 23), synthetic fiber consumption has increased rapidly in the post-World War II period and probably will continue its rapid growth for several years. It has also been shown that synthetic fibers tend to depress consumption of wool. The question arises as to whether movements in prices for synthetic fibers are indi- cators of movements in wool prices.

Again we must turn to experience in the United States because it is the only country for which price data on synthetic fibers are readily available. Since 1953 prices for wool at Boston and prices in the U.S. for Dacron and Orlon staple fibers (two of the synthetic fibers which compete with wool) have tended to decline. In general, the price levels have tended to decline at the same time, but prices for wool have been much more erratic than prices for synthetic fibers.2/ (See figure 6 and tables 23 and 25.) Also as indicated above (See page 23.) costs of producing synthetic fibers are relatively low, leaving considerable room for declines in prices for these fibers. The large profits in synthetic fiber production give manufacturers of these fibers the ability to reduce prices to provide enlargement of their markets.

1/ The significance of the difference between the two series on stocks is indicated by a t ratio of 26,24. Such a ratio indicates that there is a probability higher than 99.9 percent that the differences are not due to random fluctuations in the data. g/ Although prices for synthetic fibers are undoubtedly more staple than prices for wool, the data shown may overstate the price stability for synthetic fibers. Synthetic fiber producers sometimes will sell their products below list prices and do not change the list prices for many months. Furthermore, the discounts from list prices change from time to time. Thus actual prices are more erratic than indicated by list prices, but data on actual prices are not available. -30- FIGURE 6 UNITED STATES: PRICES FOR ORLON, DACRON, AND WOOL (CENTS PER POUNDS) 220 M 1 1 1 1 1 1 1 1 220 MONTHLY

200 200

WOOL, AUSTRALIA, 64s COMBING, CLEAN BASIS, BOSTON DUTY PAID

180 /A 180

E E 160 *-@ ~~----1-- / 160 160rI _DACRON STAPLE FIBER AND TOW, I1 \ 3 DENIER

140 ...... '' '' ''ta 140

120 120 ORLON STAPLE AND TOW, 3 DENIER'...

100 100

80 8

D J D J D J D J D J D J D J D J D J D J D 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962

IBRD - Economic Staff 2018 - 31 -

The construction of synthetic fiber producing facilities requires large capital investment. As a result, there are relatively few firms which produce synthetic fibers, and most of the producing plants are large units. The number of firms producing fibers which compete with wool (principally acrylic and polyester fibers) in 1962 in five countries were:

Country Number of firms

United States 9 France 3 Federal Republic of Germany 8 Italy 3 Japan 9

Because of the concentrated nature of the industry, prices have been administered or controlled rather successfully by the producing firms. Prices for the synthetic fiber which compete with each other, in the United States, have tended to move in parallel directions and in similar magnitudes. Data on prices in other countries are not readily available.

Despite the large profits of the synthetic fiber producing industry, the monopolistic competition which characterizes this industry will probably prevent rapid declines in prices. Larger output probably will be associated with somewhat lower prices in the United States and other parts of the world. However, the price declines are not expected to be precipitous.

As shown by Figure 6, prices for synthetic fibers declined in recent months, but prices for wool did not fall at the same time. Experience of the 1950's indicates that wool prices will decline as synthetic fiber prices fall.

Projection of Prices

Since objective analyses of the effects of price making forces on wool prices could not be developed, the price projections shown below are based on judgment and on qualitative, rather than quantitative, forces. Projections made earlier in this report indicate the demand and supply for, wool in the Free World are expected to increase at about the same rates - about 2.6% a year for production and 2.1 to 2.7% a year for demand. Furthermore, the clean equivalent of wool production in 1961 was about the same as wool demand. Therefore, the projected increases would tend to keep the supply of, and the demand for wool about in balance. At the higher demand level, demand for wool might tend to grow slightly faster than supply, but errors in the data are such that the effect of the more rapid growth in wool demand on prices is doubtful. The same errors in data also would make any price depressing influence of the lower growth rate for demand doubtful. - 32 -

On the other hand, prices for synthetic fibers during the 1960's are expected to decline moderately with the assumed sharp rise in synthetic fiber consumption (3 to 4 times that of 1960 by 1970). A sharper decline in synthetic fiber prices would occur if it were not for the monopolisti- cally competitive nature of the synthetic fiber producing industry. The moderate price decline expected for synthetic fibers is expected to cause wool prices to decline some. If wool prices did not decline, the market for wool probably would be considerably smaller than that projected in Chapter II.

A real price for 64's/70's at London in 1970 of about 88 pence is indicated (1955-57 = 100). At 1961 price levels this would be about 90 pence, roughly 91 below the average prices in 1961. Thus, a decline in price of close to 1% a year would be expected. Prices for lower quality wools would decline in about the same proportions. - 33 -

CHAFTER IV

Trade

Five countries have shipped more than 85` of the Free World's exports of wool since 1948. The five countries are Australia, New Zealand, the Union of South Africa, Argentina, and Uruguay. These countries are among the seven which produce 80% of the Free Wlorld's wool output. The other two major producers, the United Kingdom and the United States, import sizable quantities of wool each year.

Free World exports showed an increasing but erratic upward trend from 1948 to 1960. The rate of growth for all Free World exports was about 1.8% per annum. (See table 26.) In 1959 and 1960, exports were 3.0 and 2.9 billion pounds compared with an average of 2.1 billion in 1934-38. (See table 27.)

Of the total, Australia exported an average of about 47% from 1956 to 1960, compared with 38% in 1934-38. Furthermore, Australia's wool exports tended to grow at about 2% a year from 1948 to 1960.

New Zealand's wool exports also tended to increase - at a rate of about 1.9% a year from 1948 to 1960. From 1956 to 1960, New Zealand's exports averaged about 17% of the Free WTorld total, compared with 13% in 1934-38. (See table 28.)

The proportions exported by the Union of South Africa, Argentina, and Uruguay were smaller in 1956-60 than in 1934-38. In other words, wool exports from Australia and New Zealand increased more rapidly than exports from the other main exporting countries. As discussed above, wool production in Australia and New Zealand also increased more rapidly than in the Union of South Africa, Argentina, and Uruguay.

Wool exports continue to be quite important to the five principal wool exporting countries. From 1950 to 1960 wool exports averaged 13.5 to 54.5% of all exports, by value, for the five countries. The relative importance of wool was highest for Uruguay and the lowest for Argentina. The relative importance was, in general, the highest in 1950 or 1951. However, wool exports from Uruguay were about as important in the late 1950's as they were in the earlier years. (See table 29.)

Better than 95% of world wool imports have been distributed among seven countries in the Free World and the Communist Bloc. By far the largest importer in the world is the United Kingdom. (See table 30.) Other major Free World importers are the United States, France, Japan, West Germany, and Belgium. These seven countries take better than 90% of Free World's imports. (See table 31.)

The Communist Bloc was a relatively small importer of wool in the early 1950's, averaging about 4.3% of the world's imports from 1950 to 1954. However, imports into this area have grown in recent years and in 1958 and 1959 (the last years for which data are available) they averaged 8.6% of world imports. (See table 32.) Because consumption - 34 - of wool in the Communist Bloc probably will increase at a slightly more rapid rate than production, imports are expected to increase also. Iaports from the Free World may exceed 300 million pounds (greasy basis) by 1970. In 1959 Communist Bloc imports were about 220 million pounds.

In Chapter II of this report, projections of future domestic consumption of wool were made. Mill consumption of wool in any country can be different from domestic consumption because of international trade in wool textiles. Exports of wool textiles from Japan have been growing at a rapid pace. In 1960 exports from Japan were about 14 times such exports in 1950. W4ool textile exports from West Germany, France, Italy, and Belgium have also been increasing, but not nearly as rapidly as such exports from Japan. (See table 33.) Wool textile exports from the United Kingdom have not shown a growth trend.

The United States exports small quantities of wool textiles and imports large quantities. In 1960, U.S. imports were equivalent to 132,132,000 pounds of raw wool. These imports were about double those of 1950 and 32% of U.S. mill consumption in 1960.

If the trends, described above, in the principal Free World consuming countries were to continue into the future, they would cause some changes in wool trade patterns. The United Kingdom and the United States would import smaller proportions of the Free World's wool imports and Japan would import a much larger proportion. Wool imports into all the large consuming countries in the Free World would probably increase because of slowly rising mill consumption, but the increases probably would be more rapid in Japan than in other countries and increases in the United Kingdom, and the United States would probably not be as rapid as in other large consuming countries. ANNEX A

Growth Rates

Introduction

The phenomenon known as economic growth has become exceedingly important during the post-war era. There is hardly a country today that does not consider the maxirmization of economic growth a prime domestic goal. Howrever, there is substantial disagreement as to the actual mechanics of measuring growth. There exist today about seven different methods for computing a rate of growth. Some of these are more widely accepted than others. It is the purpose of this annex to explain why one of these methods was chosen to be used in this paper and show its superiority over the most commonly used method.

Measurement of Growth

Fundamentally, growth is the ratio of the amount of change over a period of time relative to some base. In symbols, this definition of the basis of growth looks like this: a Xi (1) Rate of Growth (G) = x1

where: X is a base figure of variable X1

bX1 is the change in variable X1 from T to T+l where time changes from T to T+l.

In other words the rate of growth (G) is derived from the actual changes in the variable over time. The rate of growth then seeks to find some quantitative measure of the persistent anl sustained trend (amount of change) exhibited by the variable. Therefore, growth is the persistent or sustained trend in the variable over time.l/ Clearly, a method for computing growth should not yield an amount of growth different from that which did evolve in real life. Should a particular method yield an amount of growth different from that which actually occurred, the method measures a trend which is different from that which would reflect the actual amount of change. The theoretical values for each year obtained from the fitted equation should fluctuate around the actual values rather than lie consistently above or below. Any method which gives theoretical valuesof the latter type would certainly fail to yield the correct amount of growth. It is for these major reasons that the method used to measure the rate of growth should:

1/ Other authors define economic growth similarly. Phyllis Deane in the October 1961 issue of the Malayan Review in her article "The Long Term Trends in VWorld Economic Growth" argues that "Economic growth is defined as a sustained secular increase ... ". Professor Simon Kuznets in an October 1961 lecture at the Economic Development Institute defined economic growth in terms of a sustained trend exclusive of cyclical or annual ups and downs. - 36 -

(1) accurately reflect the trend, and (2) yield the same amount of growth as did actually occur in the variable over the time in question.

The method used in this paper is an axponential growth formula known as Gloverts Methodl/ and is of the form:

y = a rX

where: y is the variable,

a is a constant, the theoretical value of the variable in the first time period of the series,

r is the rate of growth,

x is the number of time periods fr m the origpn Ufirst year). Given the preceding definition of growth, this formula provides results consistent with it: a persistent trend (rate of growth) based upon the actual stream of data and a theoretical amount of growth equal to the actual amount of growth over the period of time under review. There are two other methods available. which provide precisely the same results as does Gloverts Method, but these were not employed because of the complexity of the calculation procedure required (one must be calculated on a computer) and the length of time needed to complete the operation. Glover's Method requires approximately ten minutes of computation time. Aside from these three methods, no other well-known technique provides results consistent with formula (1) and the definition of growth given above.

The mechanics of calculation for Glover's Method are as follows:

To solve for "r":

X M

where: y = actual data

x = as above; 0 thru n-l

Find r for M and n (number of observations) in Glover's Table of Mean Values.

To solve for "a":

r - /Cn - M) (r - 1)7 . y

1 Developed by James W. Glover and appears in "Tables of Applied Mathema- tics in Finance, Insurance, Statistics"., by James W. Glover, p. 470.

/ See "Economic Growth and Its Measurement", by Boris P. Pesek, Economic Development and Cultural Change, April 1961, pp. 295-315. - 37 -

Empirical Proof As evidence of the superiority of Glover's Method over those methods which do not meet the conditions for measuring growth, a comparison has been made between the results from Glover's Method and what is commonly known as the "terminal points" method. The latter method uses only the first and last values for a series of data, omitting all values in between from the calculation. It assumes therefore, that the trend is determined by the first and last values only. It was chosen for comparison since it is well-known and in widespread use. The comparison information is set out in Table I, which shows the results for wool production in the major producing countries, and Chart I, which shows the actual data and the theoretical values obtained from Glover's Method and terminal points. Table I: Wool Production Rate and Amount of Growth from Glover's Method and Terminal Method (Data cover the period 1948-1961)

Rate of Growth (%) Increment due to Growth (Mln. lbs7) Country Terminal Glover's Terminal Glover's Actual Points Method Points Method

Australia 3.7 3.9 4,143 4,4L1 4,412 New Zealand 3.8 4.0 1,483 1,460 1,,460 S. Africa 2.7 2.7 712 832 832 Argentina -0.3 -0.1 -116 -242 -255 Uruguay 2.4 0.7 396 546 550 United States 0.8 1.2 221 71 71 United Kingdom 3.h 3.3 288 326 326 Others 1.2 1.6 883 1,086 1,089 Free World 2.2 2.5 7,367 8,479 8,485 Communist Bloc 6.7 7.0 3,753 4,593 4,593 World Total 3.0 3.2 ll,845 13,096 13,078

Inasmuch as growth is defined as a persistent or sustained trend, the amount of growth produced by the growth rate should be equal to the actual amount of growth in the series. With this thoughtin mind note the difference in the terminal points growth amount and the actual. The reason for this disparity is that this method assumes that the trend derived from the use of the first and last values applies to the intervening years. This need not be true, and it usually is not. Hence, the trend values for the intervening years will bear no relationship to the actual values. -38- FIGURE A-I WOOL PRODUCTION: ACTUAL AND TREND VALUES FOR SELECTED COUNTRIES (MILLIONS OF POUNDS) 700 700

600 600

500 500 ARGENTINA

400 400

300 300

URUGUAY 200 0200

UNITED KINGDOM

100 100

90 _.90 90 7;0-- ACTUAL VALUES GLOVER'S TREND 80 TERMINAL TREND 80

70 I I I 70 '48 '49 '50 '51 '52 '53 '54 '55 '56 '57 '58 '59 '60 '61 (Prelim.)

IBRD - Economic Stoff 2019 - 39 -

Note also that the amount of growth obtained by Gloverts Method is the same as the actual., except for errors due to rounding in the calculation of the growth rates. Serious discrepancies can arise when a method of terminal points is used for computing a growxth rate. The addition to the total amount of World Wool Production during the period 1948 to 1961 was slightly over 13 billion pounds, whereas the terminal points method shows it to be just under 12 billion pounds. Glover's Method gives a very close approximation of the actual value and the small difference was caused by rounding errors. Applying the respective growth rate to obtain projected values will result in substantially different fore- casts. For example, in projecting World Total wool production to 1970, the terminal points method provides an estimate of 7.35 billion pounds, whereas the estimate from Glover's Method yields 7.71 billion pounds. This is a difference of some .36 billion pounds - approximately equal to or larger than the current production levels in Argentina, South Africa, Uruguay, United States and the United Kingdom. Examination of Chart I reveals that the Gloverts Method consistently provides estimates which fluctuate around the actual values, and conse- quently gives a reasonable estimate of the trend. On the other hand, the terminal points method does not exhibit a consistent pattern. Much of the time its theoretical values lie outside the range of the actual values. Other charts have been constructed showing the same kind of information. These are available in the Statistics Division. The actual amount of growth in the wool production series over the post-war period for each country is obtained in the following manner. Taking wool production for the first year of the period under review, that is, 1948, this figure is multiplied by the number of years covered by the period (n). Since the period is 1948 through 1961, the number of years is 14. This process yields a figure which is the total amount of wool production that would have occurred over the period 1948 through 1961 if production had remained at the level of 1948. In other words, had there been no growth in wool production, then production during the years 1949 through 1961 would have been the same as 1948. Next, the actual wool production during the period 1948 through 1961 is summed. The actual amount of growth is obtained by subtracting the result of the first year times n (the figure which assumes no growth) from the actual amount of wool production during the period. In the case of a positive growth the latter will be larger than the former, whereas with a negative rate of change the reverse will be true. The amount of growth for Glover's and the terminal points method is obtained similarly, that is, subtracting the sum of the no growth series from the respective theoretical values. Additional empirical evidence has been compiled by the Statistics Division using other variables and different time periods. The results are always the same: Glover's growth matches the actual, while the terminal points method rarely comes close to the actual.

Annex prepared by Donald Niewiaroski, Elconomic Staff, Statiatica Division - 40 -

LIST OF TABLES

Tables Pages

1. World Wool Production, Greasy Basis, Average 1934-38 and 1948 to 1961 . .. 0.a. .00* . 0. . 43

2. Wool Production, Greasy Basis: Annual Rate of Growth, 1948 to 1961 . a*a. . 00 *...... & fi4

3. Sheep Numbers: Annual Rate of Growth, 1948 to 1960 . . . . 45

4. Production of Wool per head of Sheep: Greasy Basis, Annual Rate of Growth, 1948 to 1960 . .. a ...... a. 146

5. Wool Production: Greasy Basis, Percentage Distribution by Country, Average 1934-38 and 1948 to 1961 ... . . 47

6. Wool Production, Greasy Basis, Minor Producing Countries, 1948 to 1961 ...... a. 148

7. Sheep Numbers: World by Selected Countries, 1948-1960 . . 49 8. Sheep Numbers in Minor Producing Countries, 1948 to 1960 .. 50

9. Pounds of Wool per Head of Sheep in Major Producing Countries, Greasy Basis, 1948 to 1960 . . a...... 51

10. Pounds of Wool per Head of Sheep in Minor Producing Countries, Greasy Basis, 1948 to 1960 ...... 52

11. Lamb Prices: New Zealand, Frozen, First Quality, London, 1948to1961 ...... 53

12. New Zealand: Index of Cost Movements, Sheep Fares, First Quarter of Each Year ...... 54

13. Prices Paid by Farmers in Australia ...... 55

14. Mill Consumption of Wool, Clean Basis . . . . . , . . . . 56

15. Percentage Distribution: Mill Consumption of Wool, Clean Basis, 1948 to 1960 . *.... a...... 57

16. Domestic Wrool Consumption per Capita: World and Selected Areas, 1948 to 1960 ...... 58

17. Domestic Synthetic Fiber Consumption per Capita: World and Selected Areas, 19148 to 1960 * ...... a. . . . . 59

18. Fiber Consumption per Capita: World and Selected Areas, 1948 to 1960 ...... 60 - 4L -

Tables ... (Cont'd.) Pages

19. Gross National Product per Capita: Selected Areas, 1948 to 1960 * ...... v . - 61

20. Synthetic Fiber Production: World and Selected Areas, 1950 to 1963 ...... * a * * * 62 21. Price of Wool: London Auctions, 64's/70's, Actual and Real ...... * * * 63

22. Average Wool Prices at Local Auctions: New Zealand and Australia, 1948 to 1960 ...... -* . a - 64

23. Australian Wool: 64's/70's, Good Topmaking, Clean Basis (American Yield), Price per Pound, Boston (Duty-Paid), by Months, 1952 to Date ...... 65

24. Orlon: Acrylic Staple and Tow, 3 Denier, Bright and Semi- Dull, Price per Pound, U.S., by Months, 1952 to Date . . 66

25. Dacron: Polyester Staple and Tow, 3 Denier, Price per Pound, United States, by Months, 1953 to Date . . . . . 67 26. Wool Exports: Annual Rate of Growth, 1948 to 1960 68

27. Wool Exports: Actual Weight, Free World . .&. . .* ..* 69

28. WTool Exports: Percent of Free World ...... 70

29. Value of Wool Exports: Proportion of All Exports from Principal Producing Countries, 1950 to 1961 . . . . 71

30. Wool Imports: Actual Weight, Average 1934-38 and 1949 to 1960 * * * * * * * * * * * * * a 72

31. Free World Percentages of Wool Imports ...... 73

32. Wool Imports: Percent of World Total, Average 1934-38 and 1949 to 1960 ...... 7

33. Exports and Imports of Wool Textiles for Selected Countries, 1948 to 1960 . . . .* ...... 75 TABLE 1: WORLD WOOL PRODUCTION, GREASY BASIS, AVERAGE 1934-38 AND 1948 TO 1961 (Million pounds)

Year Australia New South Argentina Uruguay United United Others Free U.S.S.R. China Eastern Communist World Zealand Africa States Kingdom World Europe 1/ Bloc Total

1934-38 995 300 261 376 114 446 111 750 3,353 450 3,803

1948 1,057 367 227 425 114 294 81 771 3,366 472 3,838 1949 1,142 390 230 415 163 273 88 741 3,442 494 3,936 1950 1,118 390 245 430 185 271 89 761 3,489 533 4,022 1951 1,080 407 251 408 188 272 93 791 3,490 614 4,104 1952 1,281 418 274 406 190 290 95 821 3,775 478 684 4,459 1953 1,246 426 283 397 203 304 100 862 3,821 507 123 118 748 4,569 1954 1,283 455 306 364 198 310 105 870 3,891 494 133 129 756 4,647 1955 1,417 462 314 390 195 305 102 891 4,076 553 137 138 828 4,904 1956 1,564 491 321 388 190 311 105 885 4,255 567 146 137 850 5,105 1957 1,434 496 299 409 200 296 114 879 4,127 631 153 139 923 5,050 1958 1,591 540 314 421 175 295 119 890 4,345 700 165 145 1,010 5,355 1959 1,689 577 319 423 159 319 124 901 4,511 774 180 148 1,102 5,613 1960 1,616 580 305 431 181 323 121 943 4,500 777 181 154 1,112 5,612 1961 / 1,692 599 322 400 195 318 130 924 4,580 760 175 158 1,093 5,673

J Includes Albania, Czechoslovakia, East Germany, Hungary, Poland and Rumania. / Preliminary

Source: Commonwealth Economic Committee. - 3 -

TABLE 2.- WOOL PRODUCTION, GREASY B3ASIS: AN1UAL RATE OF GROWTH, 1948 TO 1961

Country or area Growth rate (%)

Australia 3.95 Iew Zealand 4.01 South Africa 2.76 Argentina

Uruuay 1/

U.S.A. 1. '1 U.K. 3.44

Others 1.64

Free World 2.7- Covmumnist Bloc 7.01

Norld Total 3.30

1/ Less than 1%. - ha -

TABLE 3. - SHEEP NMIBERS: ANNUAL RATE OF GROVITH, 1948 TO 1960

Country or area Growth rate (%)

Australia 3.3

New Zealand 3.6

South Africa 1/

Argentina 1/

Uruguay

U.S.A. 1/

U.K. 3.9

Others

Free World TT

Communist Bloc 5.8

World Total 2.1

1/ Less than 1%. - 45 -

TABIE 4b.- PRODUCTION OF WOOL PER HMAD0F SOEEP: GCREASY BASIS, ANNUAL RATE OF GROWTH, 1948 TO 1960

Country or area Growth rate (%)

Australia 1/

New Zealand 1/

South Africa 2.6

Argentina 1.0

Uruguay 1.4

U.S.A. 1/

U.K. l/

Others 1-5

Free World 1.5

Communist Bloc 1.6

World Total 1*3

1/ Less than 1%. TABLE 5.- WOOL PRODUCTION: GREASY BASIS, PERCENTAGE DISTRIBUTION BY COUNTRY, AVERAGE 1934-38 AND 1948 TO 1961

Year Australia New South Argentina Uruguay United United Others Free U.S.S.R. China Eastern Communist World Zealand Africa States Kingdom World Europe Bloc Total

WORLD

1934-38 26.2 7.9 6.9 9.9 3.0 11.7 2.9 19.7 88.2 11.8 100.0 1948 27.5 9.6 5.9 11.1 3.8 7.7 2.1 20.0 87.7 12.3 100.0 1949 29.0 9.9 5.9 10.6 4.1 6.9 2.2 18.8 87.4 12.6 100.0 1950 27.8 9.7 6.1 10.7 4.6 6.7 2.2 18.9 86.7 13.3 100.0 1951 26.3 9.9 6.1 9.9 4.6 6.6 2.3 19.3 85.0 15.0 100.0 1952 28.7 9.4 6.2 9.1 4.3 6.5 2.1 18.4 84.7 10.7 15.3 100.0 1953 27.3 9.3 6.2 8.7 4.4 6.7 2.2 18.8 83.6 11.1 2.7 2.6 16.4 100.0 1954 27.5 9.8 6.6 7.8 4.3 6.7 2.3 18.7 83.7 10.6 2.9 2.8 16.3 100.0 1955 28.9 9.4 6.4 8.0 4.0 6.2 2.1 18.1 83.1 11.3 2.8 2.8 16.9 100.0 1956 30.6 9.6 6.3 7.6 3.7 6.1 2.1 17.3 83.3 11.1 2.9 2.7 16.7 100.0 1957 28.4 9.8 5.9 8.1 4.0 5.8 2.3 17.4 81.7 12.5 3.0 2.8 18.3 100.0 1958 29.7 10.1 5.9 7.9 3.3 5.5 2.2 16.5 81.1 13.1 3.1 2.7 18.9 100.0 1959 30.1 10.3 5.7 7.5 2.8 5.7 2.2 16.2 80.5 13.7 3.2 2.6 19.5 100.0 1960 29.1 10.4 5.5 7.4 3.3 5.8 2.2 16.4 80.1 13.9 3.3 2.7 19.9 100.0 1961 30.0 10.6 5.7 7.2 3.4 5.7 2.2 15.9 80.7 13.3 19.3 100.0 FREE WORLD 1934-38 29.7 8.9 7.8 11.2 3.4 13.3 3.3 22.4 100.0 1948 31.5 10.9 6.7 12.6 4.3 8.7 2.4 22.9 100.0 1949 33.2 11.3 6.7 12.1 4.7 7.9 2.6 21.5 100.0 1950 32.0 11.2 7.0 12.3 5.3 ?.8 2.6 21.8 100.0 1951 30.9 11.6 7.2 11.7 5.4 7.8 2.7 22.7 100.0 1952 34.0 11.1 7.2 10.8 5.0 7.7 2.5 21.7 100.0 1953 32.6 11.1 7.4 10.4 5.3 8.0 2.6 22.6 100.0 1954 33.0 11.7 7.9 9.3 5.1 8.0 2.7 22.3 100.0 1955 34.8 11.3 7.7 9.6 4.8 7.5 2.5 21.8 100.0 1956 36.8 11.5 7.5 9.1 4.5 7.3 2.5 20.8 100.0 1957 34.8 12.0 7.2 9.9 4.8 7.2 2.8 21.3 100.0 1958 36.7 12.5 7.2 9.7 4.0 6.7 2.7 20.5 100.0 1959 37.4 12.8 7.1 9.4 3.5 7.1 2.7 20.0 100.0 1960 36.4 13.1 6.9 9.2 4.1 7.3 2.7 20.3 100.0 1961 37.1 13.1 7.0 9.0 4.3 7.1 2.7 19.7 100.0

Sources Table 1. - 47 -

TABLE 6.- WOOL PRODUCTION, GREASY BASIS, M1INOR PRODUCImG COUNTRIES, 1948 TO 1961 (Mi'llion Pounds)

Year India Spain Turkey Pakistan France Brazil Iran Chile 1948 72 104 76 30 40 40 30 45 1949 72 90 71 30 41 39 25 45 1950 72 85 67 30 42 43 32 44 1951 72 85 73 30 49 45 35 45 1952 72 85 78 30 49 47 37 44 1953 72 85 81 30 53 53 38 40 1954 72 83 80 30 55 56 39 39 1955 72 85 81 30 55 61 41 46 1956 76 84 85 42 55 62 44 44 1957 76 81 88 42 56 62 43 46 1958 76 82 92 42 52 70 44 46 1959 78 83 102 42 55 67 43 48 1960 78 84 104 43 57 67 40 49 1961 78 88 '105 43 56 67 40 49

Source: Coimmonwealth Economic Committee. TABLE 7.- SHEEP NUMBERS: WORLD BY SELECTED COUNTRIES, 1948-1960

(Million head)

Year Australia New South Argentina Uruguay United United Others Free Communist World Zealand Africa States Kingdom World Bloc Total

NUMBERS

1948 108.7 32.8 32.6 48.0 22.6 30.9 18.2 292.2 586.0 120.0 706.0 1949 112.9 33.9 31.9 50.0 22.6 29.8 19.5 296.4 597.0 130.0 727.0 1950 115.6 34.8 31.4 54.0 23.4 30.6 20.4 301.8 612.0 142.0 754.0 1951 117.6 35.4 34.8 55.0 24.5 32.1 20.0 312.6 632.0 153.0 785.0 1952 123.1 36.2 35.5 54.7 25.7 31.9 21.7 324.2 653.0 158.0 811.0 1953 126.8 38.0 36.0 46.8 25.7 31.4 22.5 334.8 662.0 181.0 843.0 1954 130.8 39.1 37.1 43.8 24.5 31.6 22.9 342.2 672.0 188.0 860.0 1955 139.1 40.3 38.0 45.2 23.0 31.3 23.6 336.5 677.0 200.0 877.0 1956 149.8 42.4 34.4 45.9 22.9 30.8 24.8 304.0 655.0 202.0 857.0 1957 149.3 46.0 34.4 47.9 22.6 31.3 26.1 308.4 666.0 214.0 880.0 1958 152.7 46.9 33.7 48.1 21.4 32.6 27.6 311.0 674.0 231.0 905.0 1959 155.2 47.1 34.0 48.0 21.7 33.2 27.9 311.9 679.0 240.0 919.0 1960 152.7 48.5 34.0 46.0 21.5 32.9 29.0 313.4 678.0 235.0 913.0

PERCENTAGE DISTRIBUTION

1948 15.4 4.6 4.6 6.8 3.2 4.4 2.6 41.4 83.0 17.0 100.0 1949 15.5 4.6 4.4 6.9 3.1 4.1 2.7 40.8 82.1 17.9 100.0 1950 15.3 4.6 4.2 7.2 3.1 4.1 2.7 40.0 81.2 18.8 100.0 1951 15.0 4.5 4.4 7.0 3.1 4.1 2.5 39.9 80.5 19.5 100.0 1952 15.2 4.5 4.4 6.7 3.2 3.9 2.7 39.9 80.5 19.5 100.0 1953 15.0 4.5 4.3 5.6 3.0 3.7 2.7 39.7 78.5 21.5 100.0 1954 15.2 4.5 4.3 5.1 2.8 3.7 2.7 39.8 78.1 21.9 100.0 1955 15.9 4.6 4.3 5.2 2.6 3.6 2.7 38.3 77.2 22.8 100.0 1956 17.5 4.9 4.0 5.3 2.7 3.6 2.9 35.5 76.4 23.6 100.0 1957 17.0 5.2 3.9 5.4 2.6 3.6 3.0 35.0 75.7 24.3 100.0 1958 16.9 5.2 3.7 5.3 2.4 3.6 3.1 34.4 74.5 25.5 100.0 1959 16.9 5.1 3.7 5.2 2.4 3.6 3.1 33.9 73.9 26.1 100.0 1960 16.7 5.3 3.7 5.1 2.4 3.6 3.2 34.3 74.3 25.7 100.0

Source: Commonwealth Economic Committee. - 49 -

TABIE 8.- SHEEP MaUIERS IN MINOR FRODUCI'G COUNTRIES, 1948 TO 1960 (M!Eillion head)

Other Free Year India Spain Turkey Pakistan France Brazil Iran Clhi'le World 1/

1948 38.0 19.0 25.8 6.1 7.9 13.4 11.0 6.0 165.0 1949 38.0 20,0 23.1 6.0 8.0 13.5 13.5 6.0 168.3 '1950 38.0 21.0 23.1 6.o 8.0 14.3 14.5 6.2 170.7 1951 38.0 21.0 2h.8 6.0 9.8 15.9 15.0 6.0 176.1 1952 39.0 25.0 26.5 6.0 9.8 '16.3 16.2 6.5 178.9 1953 39.0 23.7 27.3 6.0 '11.0 '16.8 17.0 6.5 187.5 1954 39.0 24.2 26.8 6.0 11.0 17.5 17.7 6.0 194.0 1955 39,5 24.1 26.4 6.0 '11.0 18.5 23.0 6.0 182.0 1956 39.5 23.3 28.0 6.6 10.9 18.9 23.5 6.0 147.3 1957 39.5 23.3 29.2 7.4 11.1 20.2 24.0 6.0 1J46.7 1958 39.5 23.5 30.8 7.6 '10.6 19.9 24.0 6.1 '1h9.0 1959 39.5 2)4.1 33.6 7.8 10.8 '19.0 23.7 6.1 '1i7.3 1960 39.5 24.5 34.5 8.8 L1.5 19.5 22.0 6.1 147.0

1/ Other than countries shown in this table and table 7. TABLE 9.- POUNDS OF W1)OL PER HEAD OF SHEEP IN MAJOR PRODUCING COUNTRIES GREASY BASIS 19!8 TO 1960 (Pounds)

New South United United Free Communist WorH Year Australia Zealand Africa Agrentina Uruguay States Kingdom Others World Bloc Tot al

1948 9.7 11*2 7.0 849 6.4 10.0 4,5 2.6 5.7 3c9 5*4 19W1 101 11.5 7.2 8.3 7.2 9.2 4.5 2.5 5.8 3.8 5.4 1950 9.7 11,2 7v8 7.8 7.9 8.9 4.4 2.5 5.7 3,8 5.3 1951 9.2 11,5 7,2 7.4 7.7 8.5 647 2.5 5.5 4.0 5.2 1952 10.4 11.5 7.7 7.4 7.4 9.1 4.4 2.5 5.8 4.3 5.5 1953 9.8 11.2 7..9 8.5 7.9 9.7 4,4 2.6 5.8 4.1 5.4 1954 9.8 lle6 8,2 8.3 8,.1 9.8 4.6 205 5.8 4.0 5.4 1955 10,2 1,o5 8.3 8,6 8e5 9.7 4.3 2.6 6.0 4.1 5.6 1956 10.4 11.6 9.3 8.5 8.3 10.1 4.2 2.8 6.5 4.2 6.O 1957 9.6 10.8 8.7 8.5 8.8 9.5 4.4 2.9 6.2 4.3 5.7 1958 10.4 U1.5 9*3 8.8 8.2 900 4.3 2.9 6.4 4.4 5.9 1959 10.8 12e2 9.4 8.8 7.3 9e6 4.4 2.9 6.6 4.6 6.1 1960 10.7 12.1 9 3 9.4 8.4 9.8 14.2 2.9 6.6 4.7 6.1 - 51 -

TAELE, 10.- POUIDS OF WOOL PER HEAD OF SHEEP IN MINOR PRODUCING COUNTRIES, GMkASY BASIS, 1948 TO 1960 (Pounds)

Other Free Year India Spain Turkey Pakistan France Brazi'l Iran Chile World j

1948 1.9 5.5 2.9 4.9 5.1 3'0 2.7 7.5 2.0 1949 1.9 4.5 3.1 5.0 5.1 2.9 1.9 7.5 1*9 1950 1.9 4.0 2.9 5.0 5.3 3.0 2.2 7.1 2.1 1951 1.9 4.0 2.9 5.0 5.0 2.8 2.3 7.5 2.0 1952 1.8 3.4 2.9 5.0 5.0 2.9 2.3 6.8 3.3 1953 1.8 3.6 3.0 5.0 4.8 3.2 2.2 6.2 2.1 1954 1.8 3.4 3.0 5.0 5.0 3.2 2.2 6.5 2.1 1955 1.8 3.5 3.1 5.0 5.0 3.3 1.8 7.7 2.3 1956 1.9 3.6 3.0 6.4 5.0 3.3 1.9 7.3 2.7 1957 1.9 3.5 3.0 5.7 5.0 3.1 1.8 7.7 2.6 '1958 1.9 3.5 3.X0 5.5 4.9 3.5 1.8 7.5 2.6 1959 2.0 3.4 3.0 5.4 5.1 3.5 '1.8 7.9 2.7 1960 2.0 3.4 3.0 4.9 5.0 3.4 1.8 8.0 2.7

1/ Other than countries shown in this table and table 9. - 52 -

TABLE '11.- LAMB FRICES: NEW ZEALI-D, 'FROZENT, FIRST QTJALITY, LONDON, '1948 TO 1961 (Pence per pound)

Year Actual Real

1948 '12.75 17.4 1949 13.48 17.5 1950 14.8 16.2 1951 16.5 14.6 1952 2a.8 20.4 1953 24.0 23.3 1954 25.3 24.9 1955 25.4 24.4 1956 25.1 23.2 1957 26.8 25.4 1958 24.5 2h45 1959 21.0 21.0 1960 25.12 25.1 '1961 1/ 20.5 20.8

1/ Preliminary. 2/ Actual deflated by Sauerbeck index (1960 = 100). - 53 -

TABIE 12.- NEW ZEALANM: INDEX OF COST MOMEI4ENTS, SHEEP FARMS, FIRST QTJARTER OF EACH YEAR (First quarter 19'1 - 100)

Index Year High Country Hill Country Fattening Farms

1951 100.0 100.0 100.0 1952 113.8 1l4.5 '112.7 1953 116.8 117.5 '1)U.44 1954 121.4 121.5 17.4 1955 125.2 125.5 12105 1956 128.2 127.7 123.5 1957 130.9 '130.7 '126.6 1958 133.8 133.5 129.4 1959 135.8 '135.7 132.4 1960 '136.9 '136.5 132.8 1961 139*8 139.1 1314.9

Source: New Zealand Meat and Wool Board's Econoric Service, Annual Review of the Sheep Industry, 1960/61, Publication 1HTo. 309, Well, ington, August 1961, page 36. - 54 -

TABLE 13.- PRICES PAID BY FARI-MfRS Ii, AUSTRALIA Index Numbers (1945-50 = 100)

1947 90 1948 100 1949 112 1950 124 1951 160 1952 191 1953 198 1954 197 1955 201 1956 209 1957 217 1958 221 1959 218 1960 224 1961 228 (lst quarter)

Source: FAO. - 55 -

TABLE 14.- MILL CONSUMPTION OF WOOL, CLEAN BASIS (million pounds)

Other Total Com- / Western Free Free munis, World Year U.S.-a/y U.K., Europe Japan World World Bloc2/ Total

1948 705 483 1,206 8 359 2,278 274 2,552 1949 511 492 1,250 13 363 2,137 313 2,45k

1950 647 518 1,324 42 341 2,354 327 2,681 1951 445 397 1,036 64 371 1,916 355 2,271 1952 428 379 1,063 99 397 1,987 385 2,372 1953 452 488 1,260 125 391 2,228 429 2,657 1954 354 462 1,210 110 397 2,071 498 2,569 1955 380 475 1,280 127 370 2,157 507 2,664 1956 l/ 404 475 1,356 171 376 2,307 559 2,866 1957 1/ 339 481 1,438 188 372 2,337 614 2,951 1958 / 306 kkk 1,317 161 327 2,111 659 2,770 1959 / 394 509 1,424 229 387 2,434 717 3,151

1960 / 372 481 1,460 270 370 2,472 742 3,214

Notes: a Series revised from scoured to clean basis; includes consumption on other spinning systems and in batting and felt manufacture. i Excluding fine hair. i/ U.S.S.R., Poland, Czechoslovakia, Hungary, Rumania, Bulgaria, East Germany and China and Dependencies.

/ Estimate 1959 (Wool Outlook, December 1960). v Provisional.

Source: Australia, Bureau of Agricultural Economics The Wool Outlooks 1953 to 1960. TABLE 15.- PERCENTAGE DISTRIBUTION: MILL CONSUePTION OF WOOL, CLEAN BASIS, 1948 TO 1960

Year United United Western Japan Other Total Soviet World States Kingdom Europe / Free Free Bloc Total World World

WORID

1948 27.6 18.9 47.3 0.3 14.1 89.3 10.7 100.0 1949 20.9 20.1 51.0 0.5 14.8 87.2 12.8 100.0 1950 24.1 19.3 49.4 1.6 12.7 87.8 12.2 100l0 1951 19.6 17.5 45.6 2.8 16.4 84.4 15.6 100.0 1952 18.1 16.0 44.8 4.2 16.7 83.8 16.2 100.0 1953 17.0 18.4 47.4 4.7 14.7 83.8 16.2 100.0 1954 13.8 18.0 47.1 4.3 15.4 80.6 19.4 100.0 1955 14.3 17.8 48.0 4.8 13.9 81.0 19.0 100.0 1956 14.1 16.6 47.3 6.0 13.1 80.5 19.5 100.0 1957 11.5 16.3 48.7 6.1 12.9 79.2 20.8 100.0 1958 10.9 15.7 46.5 5.7 13.2 76.3 23.7 100.0 1959 12.4 16.1 45.1 7.2 12.6 77.3 22.7 100.0 1960 11.7 15.1 42.9 8.5 13.7 76.8 23.2 100.0

FREE WORLD

1948 30.9 21.2 52.9 0.4 15.8 1949 23.9 23.0 58.5 .6 17.0 1950 27.5 22.0 56.2 1.8 14.5 1951 23D2 20.7 54.1 3.3 19.4 1952 21.5 19.1 53.5 5.0 20.0 1953 20.3 21.9 56.6 5.6 17.5 1954 17.1 22.3 58.4 5.3 19.2 1955 17.6 22.0 59.3 5.9 17.2 1956 17.5 20.6 58.8 7.4 16.3 1957 14.5 20.6 61.5 7.7 16.3 1958 14.3 20.5 60.9 7.5 17.3 1959 16.1 20.9 58.3 9.3 16.3 1960 15.2 19.6 55.9 11.0 17.9

I/ Includes the U.K. Source: Table 14. - 57 - TABLE 16.- DOMESTIC WOOL CONSMiPTION PER CAPITA: WORLD KIND SEIECTED AREAS, 1948 to 1960 (Pounds)

Year United United Western Japan Free Commmnist World States Kingdom Europe World Bloc

1948 4.9 6.1 3.5 .1 1.4 0.4 1.1 1949 3.6 6.1 3.6 .2 1.3 0.4 1.0 1950 4.6 5.9 3.8 .5 1.4 o.4 1.1 1951 3.5 4.5 2.9 .8 1.1 o.4 0.9 1952 3.5 4.2 3.0 1.3 1.2 o.4 0.9 1953 3.5 5.9 3.6 1.7 1.3 o.5 1.0 1954 2.7 5.4 3.4 1.2 1.2 o.6 1.0 1955 3.0 5.5 3.3 1.3 1.2 o.6 1.0 1956 3.1 5.3 3.6 1.8 1.3 o.6 1.1 1957 2.6 5.4 3.8 1.9 1.3 0.7 1.1 1958 2.4 5.0 3.4 1.6 1.1 0.7 1.0 1959 3.1 6.o 3.7 2.2 1.3 0.7 1.1 1960 3.0 5.2 3.7 2.5 1.3 0.7 1.1

I/ Includes U.K.

Note: Computed from data published by FAO and U.S. Department of Agriculture. TABLE 17.- DOMESTIC SYNTHETIC FIBER CONSUMPTION PER CAPITA: WORLD AND SELECTED AREAS, 1948 TO 1960 (pounds)

Year United United Western Japan Free Communist World States Kingdom Europe World Bloc

1948 0.5 .1 1949 0.6 .1 .1 1950 0.9 .2 .1 .1 .1 .1 1951 1.2 .2 .1 .1 .1 .1 1952 1.5 *3 .1 .1 .2 .1 1953 1.7 .3 .2 .2 .2 1954 1.9 .5 o3.2 *2 .2 1955 2.6 .7 4 .4 .3 .2 1956 2.8 .9 05 .7 .4 .1 .3 1957 3.3 1.4 .7 1.0 .5 .1 .3 1958 303 1.3 .7 1.1 .5 .1 .3 1959 4.2 1.7 1.0 1.8 .7 .4 1960 4.2 2.6 1.5 2.6 .8 .1 .5

Note: Computed from data published by FAO and US Department of Agriculture

I/ Less than .05 pounds. - 59 -

TABLE 18.- FIBER'- CONSUMPTION PER CAPITA: WORLD AND SELECTED AREAS, 1948 TO 1960 (pounds)

Year United United Western Japan Free Communist World States Kingdom Europe World Bloc

1948 39e21 24.66 14.75 3.23 9.79 4.63 8.09 1949 32.84 24.63 15.74 3*43 9.37 4.63 7.81 1950 42.18 27.34 17.18 6.18 10,45 5.29 8.76 1951 41.52 26.79 17.21 9.92 10.78 6.17 9.24 1952 37.80 18.62 14.42 12.16 9.88 6.83 8.90 1953 38.47 24.11 16.51 14.69 10.57 7.27 9.50 1954 34.40 26.98 17.73 14.46 10.66 7.94 9.74 1955 38.25 25.77 17.54 13.64 10.99 7.72 9.93 1956 36.44 25.91 18.61 18.90 11.32 8.15 10.27 1957 34.03 27.99 20.32 19-15 11.29 8.82 10.23 1958 31.88 23.26 18.39 14.38 10.34 9.26 9.77 1959 36.46 27.34 19.40 18.85 11.10 9.70 10.41 1960 34.20 27.99 20.88 22.20 10.93 9.70 10.47

Note: Computed from data published by FAO and US Department of Agriculture.

v/ Cotton, Wool and man made fibers. - 60 -

TABLE 19.- GROSS NATIONAL PRODUCT PER CAPITA:I" SELECTED AREAS, 1948 TO 1960 (U.S. Dollars)

Years United States United Kingdom Western Europe Japan/

1948 1,797 1,072 464 103 4/ 1949 1,765 1,010 492 116 1950 1,886 801 528 134 1951 1,994 809 550 149 1952 2,031 806 561 161 1953 2,080 840 587 168 1954 2,011 876 61 171 1955 2,133 899 642 189 1956 2,137 918 663 203 1957 2,135 924 686 217 1958 2,069 918 697 224 1959 2,178 938 719 262 1960 2,202 980 753 292

/ At factor cost in constant prices.

/ National income.

3 Exchange rate used for 1948 is $4.031 = f1 and 1949, $3.687 f1; $2.80 = tl used thereafter. Not comparable to date for subsequent years.

g Estimated. - 61 -

TABLE 20.- SYNTHETIC FIBER PRODUCTION: WORLD AND SEIECTED AREAS, 1950 TO 1963 (Million pounds)

Year United United Western Japan Free Communist World States Kingdom Europe / World Bloc

1950 122.4 13.2 18.9 1.0 147.6 5.4 153.0 1951 170.6 19.6 34.6 7.0 218.9 8.7 227.6 1952 210.7 24.6 43.0 7.8 270.1 14.0 28h.1 1953 246.7 34.5 58.5 1h.4 330.3 19.9 350.2 1954 284.6 53.7 86.6 21.4 405.6 23.7 429.3 1955 379.3 8o.4 122.8 34.7 550.5 29.4 579.9 1956 400.3 100.7 157.3 63.5 637.2 37.4 674.6 1957 515.7 127.8 213.3 93.5 847.8 47.1 894.9 1958 490.5 159.2 238.9 102.2 864.3 56.2 920.5 1959 645.3 215.5 337.4 178.1 1,205,3 66.9 1,272.2 1960 677.2 290.0 475.8 260.8 1,475-4 89.5 1,564.9 1961 741 7 342.3 562.3 337.5 1,716.1 117.2 1,833.3 1962,1,1790 452.4 809.7 400.0 2,509.6 163.7 2,673.3 1963/21,260.0 571.7 1,035.0 637.0 3,136.4 229.7 3,366.1

1/ Includes the United Kingdom.

LI Estimated capacity.

Source: Textile Economics Bureau. - 62 -

TABLE 21.- PRICE OF WOOL: LONDON AUCTIONS, 64ts/7o0s, ACTUAL AiND REAL (Pence per Pound)

Year Actual London Price . Real Price 1

1948 106.9 105.8 1949 119.0 124.0 1950 185.3 212.7 1951 225.2 210.7 1952 1143.0 137.5 1953 166.6 168.3 1954 147.3 150.3 1955 121.9 124.4 1956 129.6 129.6 1957 138.5 135.8 1958 103.6 104.6 1959 99.6 102.7 1960 99.1 101.1 1961 100.4 103.5

1/ Actual Price deflated by U.N. Export Price Index (1955-57 = 100).

/ Source: U.S. Department of Agriculture. - 63 -

TABLE 22.- AVERAGE WOOL PRICES AT LOCAL AUCTIONS: NEf ZEALAND AND AUSTRALIA, 1948 TO 1960 (Pence per Pound)

New Zealand Australia 50's 50's 56's 56's 64's 64's Year average super average super 501s 56 s average good combing combing combing combing combing combing

1948 1949 37.36 55.78 86.11 92.75 1950 88.86 108.18 155.39 160.79 1951 126.68 153.68 196.19 206.99 1952 58.88 73.11 115.79 120.94 1953 71h421/ 74.571/ 89.114/ 92.571/ 75.17 90.60 138.68 1146.65 1954 69.53 72.75 85.18 87.21 81.08 94.88 125.05 130.96 1955 69,32 71.24 80.14 81.96 73.88 83,14 102.51 105.51 1956 68.89 71.67 76.71 78.96 71.69 80.26 108.38 111.65 1957 75.42 77.46 90.96 93.21 85.45 97.11 119.22 123.68 1958 52.81 55.39 65.24 68114 61.54 70.28 85.11 89.o5 1959 60.00 62.114 66.25 68.69 65.74 71.48 84.68 88.20 1960 63.85 66.12 69.43 72.24 66.14 71.35 84.64 88.00

/ Data not based on entire year in many cases, but based on months for which quotations were available.

Source: U.S. Department of Agriculture. TABLE 23.- AUSTRALIAN WJOOL: 64's/70s, GOOD TOPMAKING, CLEAN BASIS (AkERICAN YIELD), PRICE PER POUND, BOSTOi1 (DUTY-PAID), BY MONfTHS, 1952 TO DATE

(Cents per pound)

Year Annual January February March April May June July August September October November December Average

1952 175.5 198.0 181.7 163,0 163.0 168,0 168.0 168.0 168.0 168.0 179.0 188.0 193.0 1953 202.2 198.0 198.0 200.5 203.0 203.0 203.0 203.3 203.5 203.5 203.5 203.5 203.4 1954 197.6 203.0 203.0 198.0 198.0 198.0 198.0 198.0 198.0 198.0 198.0 193.0 188.0 1955 165.1 178.0 173.0 173.0 173.0 173.0 173.0 173.0 165.0 153.0 151.7 148.0 148.0 1956 164.1 155.5 158.0 158.0 158.0 158.0 163.0 166.7 168.0 168.0 16S.O 170.5 178.0 1957 181.3 178.0 183.0 183.0 183.0 185.0 138.0 188.0 188.0 188.0 186.0 168.0 158.0 1958 143.3 153.0 153.0 149.3 148.0 148.0 148.0 145.0 143.0 143.0 133.o 128.0 128.0 1959 133.4 128.0 123.0 123.0 129.0 133.0 133.0 137.0 138.0 13e'.0 138.0 138.0 141.7 crm 1960 142.1 143.0 143.0 143.0 146.7 148.0 148.0 148.0 143.0 143.0 133.0 133.0 133.0 1961 136.5 133.0 133.0 133.0 135.5 138.0 138.0 138.0 138.0 138.0 138.0 138.0 138.0 1962 138.0 138.0 138.0 138.0 139.0

Source: U. S. Department of Agriculture TABLE 24.- ORLON: ACRYLIC STAPLE AND TOW, 3 DENIER, BRIGHT AND SEMI-DULL, PRICE PER POUND, U.S., BY MONTHS, 1952 TO DATE

(Cents per pound)

Year Annual January February March April May June July August September October November December Average

1952 190.0 n.a. n.a. n.a. 190.0 190.0 190.0 190.0 190.0 190.0 190.0 190.0 190.0 1953 190.0 190.0 190.0 190.0 190.0 190.0 190.0 190.0 190.0 190.0 190.0 190.0 190.0 1954 152.5 180.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 1955 147.9 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 125.0 1956 125.2 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 128.0 1957 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 c\ 1958 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 1959 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 1960 128.2 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 128.0 130.0 1961 126.0 130.0 130.0 130.0 130.0 130.0 130.0 130.0 130.0 118.0 118.0 118.0 118.0 1962 118.0 118.0 118.0 118.0 118.0

Source: U. S. Department of Agriculture TABLE 25.- DACRON: POLYESTER STAPLE AND TOW, 3 DENIEP., PRICE PER POUND], UNITED STATES, BY MONTHS, 1953 TO DATE

(Cents per pound)

Year Average January February March April May June July August September October November December

1953 n.a. n.a, n.a. n.a. n.a# 180.0 180.0 180.0 180.0 180.0 180.0 180.0 180.0 1954 161.7 180,0 160.0 160.0 160.0 160.0 160.0 160.0 160.0 160.0 160.0 160.0 160.0 1955 157.9 160.0 160.0 160.0 160.0 160.0 160.0 160.0 160.0 160.0 160.0 160.0 135.0 1956 135.5 135.0 135.0 135.0 135.0 135.0 135.0 135.0 135.0 135.0 135.0 135.0 141.0 1957 141,0 141.0 141.0 141.0 141.0 141.0 141.0 141.0 141,0 1O41.0 141.0 141.0 141.0O 1958 140.6 141.0 141.0 141.0 141.0 141.0 141.0 141.0 141.0 141.0 141.0 141.0 136.0 | 1959 136.0 136.0 136.0 136.0 136.0 136.0 136.0 136.0 136.0 136.0 136.0 136.0 136.0 ON 1960 136.0 136.0 136.0 136.0 136.0 136.0 136.0 136.0 136.0 136.0 136.0 136,0 136.0 1961 127.0 136.0 136.0 136.0 124.0 124.0 124.0 124.0 124.0 124.0 124.0 124.0 124.0 1962 124.0 114.0 114.0 114.0 114.0

Source: U. S. Department of Agriculture - 67 -

TABLE 26.- WOOL EXPORTS: ANNUAL RATE OF GRlWTH, 1948 TO 1960

Country or Area Growth Rate (%)

Free World 1.8

Australia 290

New Lealand 1.9

Union of South Africa 2.3

Argentina -1.7

Uruguay -2.8 - 68 -

TABLE 27.- WOOL EXPORTS: ACTUAL WEIGHT-'W FREE WORLD (Million pounds)

New South Year Australia Zealand Africa Argentina Uruguay Other Total

1934 -38 806.2 269.3 232.8 288.8 94.7 427.2 2,119 1948 1,054.2 420.9 221.5 400.8 123.0 179.6 2,1400 1949 1,158.0 429.0 198.9 212.5 106.6 242,0 23347 1950 1,115-7 392.9 194.0 309.3 198.6 360.5 2,571 1951 913.7 315.4 181.0 126.1 74e1 264.7 1,875 1952 1,059.9 436.3 229*2 230.7 100.4 272.5 2,329 1953 1,100.0 390.2 221,0 339.7 174.4 325.7 2,551 1954 985.1 392.5 233.2 213.5 118e2 298.5 224L1 1955 1,143.7 416.9 259.1 239.0 109.0 327.3 22495 1956 1,162.4 427.9 253.5 239.5 140.6 374.l 2,598 1957 1,327.2 431.5 234.7 193.8 61.4 390.4 2,639 1958 1,154.8 456.9 214.4 229.9 129.6 326.4 2,512 1959 1,385.9 530.3 272.1 309.3 77.1 449.3 3,024 1960 / 1,339.0 521.5 242.1 302.8 84.8 422.8 2,913

1/ Mostly greasy. 2/ Preliminary.

Source: Commonwealth Economic Committee. - 69 -

TABLE 28,- WOOL EXPORTS: PERCEN¶iJ/OF FREE WORLD (Percent of total)

N.,rTew Solvuth Year Australia Zea and Af.ri-,a Argenti.naa UIruguay Other

1934-38 38.0 12.7 11.0 13.6 4l5 20.2 1948 43.9 17.6 9.2 16.7 5.1 7.5 1949 49.3 18.3 8e5 9.1 4.5 10.3 1950 43.4 15,3 7.6 12,0 707 140 1951 48.7 16.8 9.7 6.7 4.0 14.1 1952 45e5 18.7 9.9 9.9 403 11.7 1953 43e1 15e3 8.7 13.3 6.8 12.8 1954 44.0 17.5 104 9.5 5.3 13.3 1955 45.8 16.7 1Oe4 9.6 4e4 13.1 1956 44e7 16.5 9.8 9.2 5.4 14.4 1957 50.3 16.4 8.9 7.3 2.3 1h.8 1958 46.o 18.2 8,5 9.1 5.2 13.0 1959 45.8 17.5 9.0 10.2 2.6 14.9 1960 2/ 46 00 17.9 8.3 10.4 2.9 14h5

1/ Mostly greasy. 2/ Preliminary. Source: Table 27. TABLE 29.- VALUE OF WOOL EXPORTS: PROPORTION OF ALL EXPORTS FROM PRINCIPAL PRODUCING COUNTRIES, 1950 TO 1961 I/

Australia New Zealand South Africa Argentina Uruguay (pounds sterling) (pounds sterling) (Rand) (U.S. dollars) (U.S. dollars) Year Total Wool Total Wool Total Wool Total Wool Total Wool Export Value % of Export Value % of Export Value % of Export Value % of Export Value % of Value Total Value Total Value Total Value Total Value Total

1950 744.5 420.9 56.5 182.4 74.7 41.0 425.4 124.4 29.2 1,361.0 254.3 159.9 62.9 1951 909.8 548.9 60.3 247.3 128.2 51.8 553.8 149.4 27.0 1,169.4 176.4 15.1 236.3 117.5 49.7 1952 754.1 366.6 48.6 239.8 82.0 34.2 571.2 118.0 20.7 687.8 119.7 17.4 208.8 90.3 43.2 1953 882.5 434.3 49.2 235.3 84.4 35.9 592.6 132.0 22.3 1,125.1 187.0 16.6 269.5 164.7 61.1 1954 739.3 356.0 48.2 244.0 88.4 36.2 663.0 123.6 18.6 1,026.6 121.2 11.8 248.9 124.5 50.0 1955 780.1 354.4 45.4 259.0 93.8 36.2 738.2 117.9 16.0 928.6 124.0 13.4 183.1 105.5 57.6 1956 842.6 377.1 44.8 277.2 91.5 33.0 824.4 124.0 15.0 943.8 123.8 13.1 210.7 125.6 59.6 1957 983.3 491.7 50.0 276.3 105.6 38.2 902.6 134.2 14.9 974.8 117.4 12.0 128.1 63.9 49.9 1958 740.9 302.9 40.9 249.9 79.9 32.0 782.6 85.0 10.9 993.9 99.1 10.0 138.6 80.4 58.0 1959 893.9 352.6 39.4 293.3 89.5 30.5 856.5 105.4 12.3 1,009.0 120.5 11.9 97.8 54.2 55.4 1960 875.9 348.5 39.8 302.2 102.3 33.9 884.2 94.6 10.7 1,079.2 145.3 13.5 129.4 66.8 51.6 1961 9 56.9 d 328.0- 34.3 204.51k 76.5/ 37.4 941.3 135.9 14.4 700.5& 115.6W 16.5 156.9W 96.1-2/ 61.2

4 All value is in millions of units. / Eleven months. / Preliminary. v Eight months.

Source: International Monetary Fund. TABLE 30.- WOOL IMPORTS: ACTUAL WEIGHT, AVERAGE 1934-38 AND 1949 TO 1960

(million pounds)

Year United United France Germany Italy Japan Belgium Other Free Communist World Kingdom States (Federal Free World Bloc Republic) World

1934- 38 580 197 360 267 93 203 121 75 1,896 145 2,041

1949 665 435 395 138 157 41 154 165 2,150 134 2,284 1950 569 717 339 182 138 75 175 162 2,357 114 2,471 1951 420 557 271 107 111 120 94 88 1,768 79 1,847 1952 611 545 281 112 154 143 97 81 2,024 60 2,084 1953 745 449 333 204 197 197 147 86 2,358 63 2,421 1954 604 304 336 186 167 147 115 77 1,936 152 2,088 1955 647 355 353 226 153 198 128 89 2,149 127 2,276 1956 625 341 412 228 174 282 155 98 2,315 120 2,435 1957 604 274 437 244 246 275 155 84 2,319 155 2,474 1958 601 259 333 174 212 274 132 68 2,053 205 2,258 1959 690 396 358 228 231 369 159 78 2,509 220 2,729 1960

Source: Ccmmonwealth Economic Committee. - 72 -

TABLE 31e- FREE WORLD PERCENTAGES OF WOOL IMPORTS

Ger.many Other United United (Federal Free Year Kingdom States France Republic) Italy Japan Belgium World

1934-38 30.6 10.4 19.0 14.1 4.9 10.7 6.4 3.9

1949 30.9 20.2 180 4 6.4 7.3 1.9 7.2 7.7 1950 24.1 30.4 14.4 7.7 5 9 3.2 7.4 6.9 1951 23,8 31.5 15.3 6.0 6.3 6.8 5.3 5,0 1952 30.2 26.9 13.9 5.5 7.6 7.1 4.8 h.0 1953 31.6 1900 14.1 8.7 8.4 8.4 6.2 3.6 ,1954 31.2 15.7 17.4 9.6 8.6 7.6 5.9 4.0 1955 30.1 16.5 16.4 105 7.e 9.2 6.o 4,2 1956 27.0 14h.7 17.8 9.9 7.5 12n2 6.7 4.2 1957 26.1 llo8 18.8 10.5 10.6 11.9 6.7 3.6 1958 29.3 12.6 16.2 8.5 10.3 13.4 6.4 3.3 1959 27.5 15.8 14.3 9.1 9.2 14.7 6.3 3.1 1960

Source: Table 30. TABLE 32.- WOOL IMPORTS: PERCENT OF WORLD TOTAL, AVERAGE 1934-38 AN] 1949 TO 1960

Germany Other United United (Federal Free Free Communist Year Kingdom States France Republic) Italy Japan Belgium World lWorld Bloc

1934-38 28.4 9.7 17.6 13.1 4.6 10.0 5.9 3.6 92.9 7.1

1949 29.1 19.1 17.3 6.0 6.9 1.8 6.7 7.2 94.1 5.9 1950 23e0 29,0 13.7 7.4 5.6 3.0 7.1 6.6 95.4 4.6 1951 22.7 30.1 14.7 5.8 6.0 6.5 5.1 4.8 95.7 4.3 1952 29.3 26.1 13.5 5.4 7.4 6.9 4.6 3.9 97.1 2.9 1953 30,8 18.5 13.8 8.4 8.1 8.1 6.1 3.6 97,4 2.6 1954 28.9 14.6 16.1 8.9 8.0 7.0 5.5 3.7 92.7 7e3 1955 28.4 15.6 15.5 10.0 6.7 8.7 5.6 3.9 94.4 5.6 1956 25.7 14,0 16.9 9.4 7.1 11.6 6.4 4.0 95.1 4.9 1957 24.4 11.1 17.7 9.8 9.9 11.1 6.3 3.4 93.7 6.3 1958 26.6 11.5 14.8 7.7 9.4 12.1 5.8 3.0 90.0 9.1 1959 25.3 14.5 13.1 8.3 8.5 13.5 5.8 2.9 91.9 8.1 1960

Source: Table 30. TABLE 33.- EXPORTS AMD IMPORTS OF WOOL TEXTILES FOR SELECTED COUNTRIES, 1948 TO 1960 (Thousands of' metric tons)

Year U.K. .France Itpj.y Western Gernany Be'2iu Jagan Exports Imports Exports Imports Exports Imports Exports Imports Exports Imports Exports Imports

1948 93.9 12.6 33.9 3.6 11.4 6.2 2.6 0.5 24.6 15.9 0.9 0.1 1949 100.3 15.0 40.6 1.7 12.6 8.7 2.5 8.8 31.0 20,4 1.9 18s 1950 118.6 17.5 51.3 4.5 16,2 4.8 9.1 25.7 33,7 26.4 1.6 0.1 1951 94.8 17.0 41.0 6.7 20.2 6.1 6.4 17e0 29.2 16.5 1.6 3.1 1 9 5 2 84.1 7.9 38.4 4.6 15.2 8.9 5.4 20.8 24.3 16.8 0,9 5.0 1953 93.1 11.4 43a7 5.4 24.6 9.2 7.6 28.3 35.1 21.6 3.5 11.9 1954 96.1 11.9 49.1 6.7 29.3 8,3 10.1 32.0 38.1 26.7 9.8 5.8 1955 104.6 16.7 56,1 9.6 40.2 8.6 11.8 42.1 42.9 28.3 11.1 5.9 1956 108.8 16.6 57,1 12.7 48.3 8.2 13.8 48.2 48.9 31.5 11.7 9.4 1957 110.4 18.6 59.5 10.2 55.6 7.3 14.1 60.9 49.6 33.0 15.3 6.2 1958 103.2 17.9 54.0 5.4 49.2 6.1 12.9 54.8 43.8 29.1 14.1 6.3 1959 107.0 18.2 66.6 8.0 46.3 10.2 17.5 69.1 54.8 33.9 20.5 6 cs 1960 109.5 15.4 74.3 9.8 51.5 14.7 18.1 71.1 5".6 38.6 22.6 4.6

Source: FAO