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TABLE 1.-Wool tops: United States production, exports of domestic merchandise, and imports for consumption, specified years, 1937-51

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Source: Compiled from official statistics of the U. S. Department of Commerce.

United States production.-The production of wool tops in the United States has decreased considerably since the latter part of 1950. The worsted industry experienced a sudden upsurge in orders immediately after our troops went into Korea, when buyers increased their inventories to record levels as a hedge against expected shortages, and the individual consumer stocked up on clothing for the same reason. When it became apparent that clothing was going to be readily available, buying dropped off and fabric dealers and apparel manufacturers endeavored to reduce their inventories to normal requirements. For more than a year the top-producing industry has operated at considerably less than capacity, many plants have been operating on reduced shifts, and some have shut down.

Table 2 gives the production of wool tops in 1950-51, and in January 1952, by weekly averages.

TABLE 2.—Wool tops;1 United States production, by weekly averages, 1950–51 and January 1952

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Machinery activity.-Another indication of the depressed condition of the domestic top-producing industry is given by official data on the hours of operation of combing machinery. Combing activity in January 1952 was at a postwar low. Table 3 shows weekly averages of the hours worsted combs were operated, by months, 1950–51, and January 1952.

TABLE 3.—Activity of worsted combs in the United States, by months, 1950–51, and January 1952

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United States tariff.-The duty on wool tops was 37 cents a pound plus 20 percent ad valorem in the Tariff Act of 1930; the specific rate was intended to be compensatory for the duty on raw wool. Subsequent reductions were made as a result of the trade agreement with the United Kingdom (1939), and under the General Agreement on Tariffs and Trade at Geneva (1948) and at Torquay. The present rate, 274 cents a pound plus 64 percent ad valorem, became effective June 6, 1951. The ad valorem rate has been reduced the maximum allowable under present law.

United States imports.-Imports represented a negligible portion of United States consumption of wool tops until 1951, when they amounted to 10.4 million pounds and were equal to nearly 5 percent of domestic production, of which 7.6 million pounds, equal to 3.5 percent of domestic production, were from Argentina and Uruguay.

Before World War II, the United Kingdom, France, and Belgium were the principal suppliers, and those countries continued to be important suppliers in postwar years. Wool tops from Argentina and Uruguay, however, entered the domestic market in substantially increased quantities in 1950 and in much larger quantities in 1951; those two countries supplied 63 percent of the total imports in 1950 and 73 percent in 1951. United States imports for consumption, by principal sources, specified years 1937 to 1951, and January-February 1952, are shown in table 4.

TABLE 4.-Wool tops: United States imports for consumption, by principal sources, specified years 1937 to 1951 and January-February 1952

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2 Less than 500 pounds.

3 Includes 85,000 pounds, valued at $71,000, in 1943, and 143,000 pounds, valued at $146,000, in 1947, from Canada.

Includes 202,000 pounds, valued at $295,000, from Italy, and 156,000 pounds, valued at $132,000 from Canada.

5 Includes 275,000 pounds, valued at $398,000, from Italy, and 213,000 pounds, valued at $309,000, from the Netherlands.

Includes 213,000 pounds, valued at $267,000, from Italy, and 164,000 pounds, valued at $228,000, from the Netherlands.

7 Less than $500.

8 Calculated on the exact (i. e., unrounded) figures.

Source. Compiled from official statistics of the U. S. Department of Commerce.

In early 1951, the Argentine Government established price floors below which wool could not be sold in the home market or exported. Because these floors were substantially above world prices of wool, Argentine top manufacturers found that even with the preferential exchange rate their export prices tended to be higher than those of competing countries in the world market. As a consequence there have been relatively few shipments (general imports) of wool tops from Argentina to the United States since mid-1951, and imports for consumption since that time have been largely withdrawals from warehouse rather than direct entries.

Shipments from Uruguay, on the other hand, were nearly 50 percent larger in the last half of 1951 than in the first half. They entered at an average monthly rate of 411,000 pounds in the first 6 months and 613,000 pounds in the last 6 months of 1951; in January 1952, they were 802,000 pounds, and in February 1952, they were 444,000 pounds.

Table 5 shows United States general imports (direct entries plus entries into bonded warehouse) from Argentina and Uruguay, imports for consumption (direct entries plus withdrawals from bonded warehouse), and approximate quantity remaining in bonded warehouse, in 1950 and in specified periods, 1951-52.

TABLE 5-Wool tops: United States general imports, imports for consumption, and approximate quantity remaining in bonded customs warehouse, 1950 and in specified periods, 1951-52

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Source: Compiled from official statistics of the U. S. Department of Commerce.

764 2,207

145

399

610

590

1,692

3,581

PRICES

During the greater part of the past 2 years, South American tops have been purchased for the United States market at duty-paid prices from 15 cents to 60 cents per pound below the price of comparable tops combed in the United States, and frequently the prices of South American tops have been lower than the prices of comparable grades of South American wool. In this period the prices of wool and wool tops in the world market more than doubled and then in the spring of 1951 began a decline which by March 1952, carried prices below the pre-Korean level.

Before 1950 imports of wool tops from Argentina and Uruguay were relatively small and constituted a negligible portion of United States consumption. In the period of January 1950-March 1951, imports, although increasing, did not have a particularly disturbing effect on the price level of the domestic market because business was good and prices were rising. After the first quarter of 1951, however, imports continued to increase while prices and worsted sales steeply declined, and the comparatively low prices of the tops from South America had a decidedly weakening effect on the price structure of the United States tops market.

Table 6 gives price quotations for domestic 60s grade wool tops, landed duty-paid prices to the importer for actual purchases of relatively comparable grades of Uruguayan tops, and the price quotations for 58s-60s grade Uruguayan raw wool, specified periods, 1950-52. Argentine prices were comparable to those of Uruguay up to the spring of 1951; since then, because of high official minimum export prices in the face of a declining world market, quotations for Argentina wool and wool tops have been well above those of Cruguay.

TABLE 6.-Comparison of prices of imported Uruguayan and United States wool tops, and Uruguayan wool, specified periods, 1950-52

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1 Made from domestic and/or imported wool.

2 The 58s-60s and the 60s-58s sell for somewhat less than the 60s, but the difference is not large enough to distort the comparison.

3 Offering price.

Source: Data for domestic top are mid-month quotations from the Commercial Bulletin; data for imported top are actual transactions, and for imported wool are from U. S. Department of Agriculture, Boston Wool Market News Service.

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