§ Mr. BellinghamTo ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the guarantee price for the 1991 wool clip.
709W
§ Mr. GummerTogether with the Secretaries of State for Scotland, for Wales, and for Northern Ireland, I have reviewed the state of the wool market and the prospects for the 1991 clip. 1990–91 has been a very difficult year for the wool industry. Market conditions have continued to deteriorate and worldwide stocks of wool have built up to record levels. At home wool sales have been depressed by a slowdown in the property market with a consequent reduction in the demand for the furnishings and carpets which normally absorb quantities of British wool. Other factors, including the continued absence of China, a major buyer, and the decisions of Australia and New Zealand to abandon market price support for the present have further contributed to the depressed market situation worldwide. Currently the average market prices being achieved in the United Kingdom are well below the 1990 clip guaranteed price of 125p/kg. For 1991 the prospects remain uncertain.
Ministers have also had to take account of the Government's announced intention to end the wool guarantee and of the need for the industry to prepare for a smooth transition to market prices. In the light of this review, and taking account of current market conditions, it has been decided to set the guarantee at 120p/kg for the 1991 clip year—a reduction of 5p/kg on the 1990 guaranteed price. This constitutes a further step towards actual market prices and towards the ending of the guarantee.