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WOOL ECONOMIC RESEARCH REPORT

NUMBER 9

JANUARY 1966

WOOL IN ITALY

WOOL ECONOMIC RESEARCH REPORT

NUMBER 9

BUREAU OF AGRICULTURAL ECONOMICS, CANBERRA, AUSTRALIA, JANUARY 1966

REGISTERED AT THE G.P.O., SYDNEY, FOR TRANSMISSION THROUGH THE POST AS A BOOK

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PREFACE

Though the wool textile industry in Italy datesback several centuries, at no time in history has it played amore conspicuous role in world trade than in the past decade.During this period, Italy has emerged as the leading supplier,in terms of weight, of woven wool cloth on world exportmarkets; in terms of value, wool cloth exports from Italyhave a Imo s t vt-re b Led and represent about a quarter of the totalvalue of wool cloth moving into world trade. Italy is, inaddition, a substantial exporter of worsted and woollen yarnand of wool knitted goods.

Though the expansion of the export trade in woolcloth has depended heavily upon the use of re-used wool, andthe share of raw wool in the total materials used by the wooltextile industry remains small by world standards, the rate ofincrease in Italian consumption of raw wool between 1954 and1963 has nevertheless been high. Italy is a consistent pur­chaser of virgin wool, ranking fourth (after Japan, the UnitedKingdom and France) as a customer for Australia's wool, andoccupying a high place in the wool export trade of South Africaand New Zealand. Recent changes in the Italian wool textileindustry and its prospects are therefore of considerableinterest to Australia. The period chosen for study is thedecade 1954 to 1963, with the addition where possible of datafor 1964.

The study was prepared by Miss M.E. Crawford, whileshe was a member of the Bureau's Wool Section. It forms partof the programme of economic research financed from the WoolResearch Trust Fund.

D.H. McKayDirector

Bureau of Agricultural Economics,CANBERRA.

January 1966.

CONTENTS

Preface

Page

I

11

GENERAL SURVEY OF THE ITALIAN WOOL TEXTILEINDUSTRY

Structure of the IndustryEquipmentComparison with Other Wool Yarn Producing

CountriesLabour Force

CONSUMPTION OF RAW MATERIALS AND SOURCES OFSUPPLY

Salient FeaturesRaw Wool and Fine Hair

Local ProductionImports

Semi...Proc~ssed WoolNon-Virgin W9~1 .Man-Made· Fibr~

Local 'Production

1

23

55

10

1013131417172020

III TRENDS IN ITALIAN PRODUCTIONThe EEC ContextTopsYarnWoven FabricOther Products of the Wool Textile IndustryKnitted Goods and HosieryThe Mystery of Yarn Disposal

IV TRADE IN WOOL PRODUCTSThe Home MarketOversea Trade

Woollen and Worsted YarnWoollen and Worsted Fabric

•Re·latedWool·ProduetsExports of Wool Products and the Balance of

•Tra<leTariffs

(i)

24

24242729303134

37

3739394245

4848

v

VI

PRICE TRENDS

Raw MaterialsLabourTaxationWool Products

PROSPECTS FOR WOOL IN THE ITALIAN ECONOMY

Page

5151535757

59

APPENDIX: Tariff Items Used in Calculating Volume~fExports 63

MAP: Italy Frontispiece

(ii)

LIST OF TABLES

Page

1. Equipment in the Italian Wool TextileIndustry: 1956 to 1964 4

2. Yarn Production and Number of Spindles:Selected Countries: 1963 6

3. Emp1oymen~ in the Italian Wool TextileIndustry: By Regions: 1956 to 1964 8

4. Employment in the Italian Wool TextileIndustry: 1956 to 1964 9

5. Consumption of Raw Materials: Italian WoolTextile Industry: Analysis by Weight andShare of Total Consumption: 1954 to 1964 12

6. Consumption of Spinnable Wool Raw Material:Italian Wool Textile Industry: 1954 to 131964

7. Italy: Sheep Numbers, Total Wool Productionand Production per Head: 1954 to 1962 14

8. Italy: Imports of Raw Wool: By Major Countriesof Origin: 1954 to 1964 15

9. Value of Imports of Raw Wool as Percentage ofTotal Italian Imports: 1954 to 1964 16

10. Italy: Imports of Wool and Hair Tops: 1954to 1964 18

11. Italy: Imports of Rags: 1954 to 1964 19

12. Italy: Productiop of Man-Made Fibre: 1954to 1964 21

13. Comparison of Production by the Wool TextileIndustries of the EEC Countries: 1956to 1964 25

14. Italian Wool Textile Industry: Production ofTops: 1954 to 1964 26

15. Italian Wool Textile Industry: Production ofTops of tfOther" Fibre: 1960 to 1964 27

16. Italian Wool Textile Industry: Productionof Yarn: 1954 to 1964 28

(iii)

Page

17. Italian Wool Textile Industry: Production ofYarn of "Other ll Fibre: 1960 to 1964

18. Italian Wool Textile Industry: Production ofWoven Fabrics: 1954 to 1964

19. Italian Wool Textile Industry: Production ofFabrics of "Other" Fibre: 1960 to 1964

20. Italian Wool Textile Industry: Production ofCarpets Felts, etc. : 1954 to 1964

21. Italian Wool Textile Industry: Production ofCarpets Fe 1ts, etc. of "Other" Fibre:1960 to 1964

29

30

31

32

33

22. Italian Wool Textile Industry: Production ofKnitting Yarn: 1959 to 1964 33

23. Production of Wool Fabrics, Knitted Goods andHo siery: Index Numbers: 1954 to 1964 34

24. Estimated Final Consumption of Wool Per Headof Population: 1952 to 1961 38

25. Italy: Exports of Pure and Mixed Worsted Yarn:1954 to 1964 40

26. Italy: Exports of Pure and Mixed Woollen Yarn:1954 to 1964 41

27. Italy: Exports of Pure and Mixed Woven Fabricof Wool and Fine Hair: 1954 to 1964 43

28. Italy: Imports of Pure and Mixed Woven Fabric ofWool and Fine Hair: 1954 to 1964 46

29. Italy: Exports of Wool Knitted Goods andHosiery: 1954 to 1964 47

30. Italy: Trade Balance and the Wool TextileIndustry: 1956 to 1963 49

31. Monthly Average Prices of Merino and CrossbredWools: Index Numbers: 1954 to 1964 51

32. Monthly Average Wool Prices and Prices ofMan-Made Fibre: Index Numbers: 1954to 1964 52

33. Cost of LivingNumbers:

and Workers'1954 to 1964

(iv)

Wages: Index54

3~. Earnings in-the Textile Industry: IndexNumbers: Italy, U.K. and U.S.A.:1954 to· 1964

35. Monthly Average Prices of Wool Products:Index Numbers: 1954 to 1964

Page

55

58

I GENERAL SURVEY OF THE ITALIAN WOOL TEXTILE INDUSTRY

The worsted sector of the Italian wool textileindustry, which is the more important from the point of viewof consumption of raw wool, is concentrated in the northernregions within easy distance of the port of Genoa. Theseregions, where 75% of the industry's labour force is employed,are Piedmont, Liguria; Venice and Lombardy; Biella, Vercelli,Turin, Milan and Vicenza are towns and cities notable for top­making, worsted spinning, worsted weaving and knitting.Woollen spinning and weaving is traditionally associated withPrato and its surrounding villages, a little further southin Tuscany. Though modern worsted mills and relatedfacilitie~ have been established in Prato to comb, spin,weave and knit products of virgin wool, this district hasbecome world famous for the cheap woollens made from re-usedwool on which the expansion of the export trade in wovenwool fabric has been to a large extent dependent. While themain concentration of wool textile manufacture is in theareas mentioned, branches of the industry (a few of themlarge establishments, as at Ponte Fellicino in Umbria) arescattered throughout other parts of Italy. Feits aremanufactured at Forli in the north-east and Perugia incentral Italy, while there are worsted weaving and knittingmills in Rome and further south in Calabria. Cloth foruniforms, blankets and "homespun" fabrics are woven at suchplaces as Foggia in Apulia and Lagoneg,ro in Basilicata; aspecial type of carded knitting yarn is spun in Marches.

The Italian wool textile industry consumed anannual average of 164m lb., clean basis, of raw wool andfine hair in the period 1954 to 1964, reaching a peak ofalmost 200m lb. in 1962. At the same time, consumption ofre-used wool has kept pace, so that the proportion of rawwool to total materials used (38%) remains low by worldstandards - as does also the proportion of man-made fibre(10%) •

In 1964 there was a falling-off in output of somewool products; pure wool and mixture tops fell by Ilm lb.to 110m lb.; mixed yarn and yarn of other fibre spun on thewoollen system by 23m lb. to 297m lb.; and fabrics woven onthe woollen system by 17m lb. to 107m lb. Production of purewool worsted yarn and fabric and pure woollen yarn remainedrelatively high at 97m lb., 47m lb. and 79m lb. respectively.

...-

- 2 -Wool cloth exports have been greater than 100m lb.

in each year since 1960, and in 1964 were equivalent to 62%of the total fabric production recorded. However, the bulkof Italy's wool cloth exports is "Prato-type" woollen clothin which there is a very high proportion of re-used wool~

Thus 9 the size of the Italian export trade in wool fabricsto a large extent is illusory from the point of view of itsconsequent effect on the demand for Australian raw wool.More significant in that context is the expansion of worstedspinning and the growth in the use of worsted yarn by theknitting industry which now uses almost half the yarn outputof the wor s t e d s e cto r , For example, in 1964, 26m lb. ofknitted fabric were exported; these exports were very nearlyas valuable as the 105m lb~ of wool woven fabric exported inthe same year. More detail on developments in the knittingindustry is presented in later sections.

§tructure of the Industry

The structure of the wool textile industry in Italydiffers from that of other advanced wool manufacturingcountries in that, though some firms are very large indeed,there is a great number of small specialist enterprises.Many of these continue the tradition of the semi-independentartisan working in his home on a contract basis.

According to the General Confederation of ItalianIndustry, investment in the wool textile industry in 1961 and1962 averaged $A20.2m(1) this is less than in either thecotton industry ($A25 .. 7m) or the "hard and miscellaneousfibre" industry ($A36.5m). Investment in the industry "forthe production of cellulose for textile use", in comparison,totalled $A36.8m, 1.6% of the total for all industry, andmore than investment in any branch of the textile industryproper.

The wool combing sector had in 1962 a productivecapacity of 81,600 metric tons (179.9m lb .. ). The spinningsectors (woollen and worsted) were capable of combined outputof 271,000 metric tons (597.5m lb.) and total weaving capacitywas 133,000 metric tons (293 .. 2m lb.).. An enlargement ofcapacity generally was continuing and there was a high degree

(1) In 1962 the rate of exchange was 693 lire to $Af~

J

- 3 -of utilization; in 1962 it ranged from 80% for combing to70% for weaving. The wool industry in Italy has thus workedmuch closer to capacity than, for example, cotton spinningand cotton weaving, where the proportion of total capacityutilized was approximately 57% and 50% respectively. In theartificial and synthetic fibre weaving industry, utilizationwas estimated at 70-75%(2).

Equipment

Since large amounts of equipment were destroyedduring World War 11, and because the industry has expandedso greatly, more of the industry's combs, spindles and loomsare modern and efficient. The distribution of the up-to-dateequipment within the industry, is however, extremely uneven.

petails of the number of combs, spindles and loomsat the beginning of the years 1956 to 1964 are set out inTable No. 1 (see page 4).

The highest proportion of each type of equipmentwith the exception of woollen spindles, is to be found inPiedmont~Liguria; 64% of the combs, 57% of the worstedspindles, 32% of the woollen spindles and 38% of the looms.Tuscany, as befits its importance in woollen textiles, hasmore than half the woollen spindles and also a fairly largeshare (33%) of the total number of looms.

In the nine years from 1956 to 1964 there has beena 50% increase in the number of combs; approximately one­third of them are for second combing.

Though the total number of spindles has risen onlyby about 7%, there has been a notable increase, in the worstedspinning sector, in ring spindles at the expense of the self­acting type;(3) the boom in knitwear and hosiery has beenlargely responsible for this development. Self-actingspindles have diminished in importance from about 30% ofthe total in 1956 to a negligible proportion today.

(3)

Confederazione Generale dell'Industria Italiana,Previsioni di Svilu 0 dell'Industria Italiana uad­riennio1963-66 , Rome 1963.The output of ring spindles which .i.mpar t a twist toyarn by the action of a small ring attached to thespindle, is many times greater than that of the olderself-acting mule spindles.

Table No. 1

EQUIPMENT IN THE ITALIAN WOOL TEXTILE INDUSTRY1956 to 1964

Year - - -Worsted Spindles Woollen Snind1es Looms(a) Combs Ring Se1f- Total Ring Se1f- Total (b)acting acting

'000 '000 '000 '000 '000 '000 '000 '000

1956 2.3 490.3 232.3 722.6 51.7 816.5 868.2 23.71957 2.4 51LO 164.8 675.8 73.9 781.3 855.2 24.51958 2.5 518.1 115.7 633.8 92.3 777.9 870.2 24.5

1959 2.6 542.8 70.6 613.4 101.2 774.6 875.8 24.51960 2.8 583.7 59.4 643.1 118.1 793.7 911.8 24.51961 3.1 648.9 45.3 694.2 146.3 749.5 895.8 24.51962 3.4 691.5 16.1 707.6 151.7 723.3 875.0 25.0

1963 3.5 745.6 11.5 757.1 178.4 737.0 915.4- 25.01964 3.8 811.7 6.0 817.7 186.1 715.3 901.4 25.0

(a) 1 January of each year-stated. (b) Estimated.

Source: Laniera, Anno 70 n.9, October 1963, pp. 1,173-5; Anno 78 N.6,June 1964, pp. 665-8.

I

~

r:

- 5

In the woollen spinning sector, though the number of ringspindles has more than trebled, self-acting spindles stillconstitute the vast majority.

Since a large number of looms are in the hands ofindependent craftsmen, accurate estimation of their numbersis difficult. The number of auto~atic looms in integrateaenterprises is believed to be increasing.

Comparison with Other Wool Yarn Producing Countries

In -phe non-Communist world, Italy is the secondlargest producer of yarn (whether or not entirely of wQol)spun on the woollen system, and the fifth largest producerof yarn spun on the worsted system. In Table No. 2, on page6, yarn output during 1963 is related to the number of spindlesin Italy and in a number of other producing countries.

On the evidence of the table, production per wool­len spindle is considerably lower in Italy than in the UnitedStates industy. On the other hand, the United Kingdomindustry's yarn production on the woollen system fell short ofthe Italian~Dutput by 6.6m lb. in 1963, even though the U.K.had a considerable advantage in number of spindles. Italianproduction per spindle appears to be a little higher than theJapanese but approximately the same as that of its EEC part­ners, West Germany and France. On the worsted spinning side,the Italian performance again_appears to be better than theU.K. and Japanese, but less than the U.S., French and WestGerman averages. The output per spindle howeyer, is affectedby a number of factors: the proportion of ring to self-a~ting

spindles, the number of idle spindles, spindle speeds andhours worked.

Labour Force

According to the Industrial and Comm~rcial Censusof October 1961,(4) some 145,000 people (rather less than 2%of the total work force) were engaged in the wool textileindustry, which was made up of 9,011 "local units". Six

(4) Istituto Centrale dt Statistica, 4 0 Censimento Generaledell'Industria e del Commercio, 16 October 1961, Vol. 1:Imprese, Unita Locali, Addett: dati provissore percOmmune, Rome, 1962, pp. 9, 15.

Table No. 2

YARN PRODUCTION AND NUMBER OF SPINDLES: S&LECTED COUNTRIES: 1963

.... Woollen Spinning !' Worsted Spinnin~Country Yarn . . - - S-pindles Produc- Yarn Spindles Produc-

Produc- " Self-tion Produc- R" Self- 1

tion

tion R1ng t" Total Per tion 1ng t" Tota Per -ac 1ng Spindle ac 1ng Spindle

m.lb. '000 '000 '000 - lb. m.lb. '000 '000 '000 lb.'

Italy 320 186 715 901 355 138 812 6 818 168

U~-S,"A. 535 n sa , n.a. 1,220 439' 215 n , a ; n.a. .660 326

U~K. 313 110 1,510 1,620 193 239 2,327 89 2,416 99

France 128 80 340 420 304 222 800 40 840 264

WestGermany 123 n.a. n.a. 373 329 133 n.a. n.a. 683 195

Japan 116 21 407 428 272 210 1,352 18 1,370 153

n.a., not available.

SOUr~e: Commonwealth Economic Committee, International Wool Textile,Organisation and International Wool Study Group, Wool Statistics1963-64.

o-

- 7 -thousand of these concerns consisted of only one or twopeople; the great majority of the workers were employed inthe 15% of the total number of firms which had a work forceof more than ten.

By comparison, the census showed that the structureof the other sectors of the textile industry was much lessdiffuse. The cotton industry employed 172,900 people in3,129 firms, and the artific ial and synthetic fibre industry29,821 people in 634 firms. In both these sectors, more thanone-third of the firms had a labour force greater than ten.

There is a discrepancy between the figure for thelabour force in the wool textile industry given by the censusand that given by other authorities. According to theAssociazione Laniera Italianat the total directly andindirectly employed by the industry in 1961 was 115,805 plusan estimated 10,000 employed by artisan concerns. Thedifference may be due to the inclusion in the census returnsof part-time family labour in the cottage industry.

The figure given by the Association for morerecent years has been about 121,000. Nearly half theoperative labour force is in Piedmont-Liguria, followed byTuscany and VeI+iG~e~;_:_ each with about one-fifth. The propor­tion for Tuscany would, however, be augmented were theestimated 10,000 working ih artisan establishments included.Only a very small proportion of the labour force is in thesouth. Table No~ 3 shows that employment reached a peak in1963 and suffered a small decline in the following year.The fall seems to have taken place mainly in Piedmont-Liguria;in Tuscany, employment appears to have been higher in 1964than in any other year of the period. Short-time work wasnevertheless operating in almost every Italian wool centrein 1964.J5)

Another authority(6) has placed the labour forcein the Italian wool textile industry at the end of 1964 at96,300. This included wage-earning operatives, foremen,engineers and maintenance staff, but excluded employees indyeing and finishing. Table No. 4 shows the figures on thisbasis from 1956 to 1964 together with composition by sex.It is seen that women are slightly in the majority amongwool textile workers. -(5) Wool Record and Textile World, Thomas Skinner & Co.

'(Publishers) Ltd. t Vol. 107, No. 2906, 22 January 1965.(6) ,Commonwealth Economic Committee, International Wool

Textile Organisation and International Wool Study Group,Wool Statistics 1964-65, p. 23. -

- 8 -

Table No. 3EMPLOYMENT(a) IN THE ITALIAN WOOL TEXTILE INDUSTRY; BY REGIONS

1956 to 1964

Year Venice

'000Directly Employed

1956 105.0 51.3 49 18.3 17 20.7 20 10.9 10 3.9 41957 102.4 50.4 49 17.5 17 20.3 20 10.2 10 4.0 41958 102.8 50.3 49 19.3 19 18.8 18 10.3 10 4.2 41959 99.5 47.9 48 ' 19.6 20 18.6 18 9.6 10 3~8 4,1960 106.1 50.3 48 21.7 20 19.8 18 10.5 10 3.9 41961 106.'0 51.0 48 20.4 19 19.7 19 10.9 10 4.1 41962 108.8 51.4 47 20.8 19 21.7 20 10.6 10 4.3 41963 110.3 41.9 47 22'.3 20 22.1 ,20 9.8 9 4.2 41964 108.8 50.3 46 22.6 21 22.1 20 9.3 9 4.5 4

Indirectly Employed1956 9.4 4.6 49 1.6 17 1.8 19 1.0 ).2 0.3 31957 9.3 4.6 50 1.5 l!6 1.8 19 1.0 11 0.3 41958 9.2 ' 4.6 49 1.7 18 1.6 17 1,0 12 0.3 41959 9.1 4.5 49 1.7 18 1.6 18 1.0 11 0.4 41960 9.5 4.5 48 1.8 19 1.7 18 1.1 11 0.4 41961 9.8 4.7 ' 48' 1.8 19 1.8 18 1.1 11 0.4 41962 10.3 4.9 47 L8 18 2.0 19 1.2 11 0.5 51963 10.6 5.1 48 1.9 18 2.1 19 1.1 11 0;4 41964 11.1 5.2 47 2.1 19 2.2 20 1.1 10 0.5 4

Total1956 114.4 56.0 49 19.9 17 22.5 20 11.9 '10 4.2 41957 111.7 55.1 49 19.0 17 22.1 20 11.2 10 4.3 41958 112.0 54.9 49 20.9 19 20.4 18 11.3 10 4 G5 41959 108.6 52.4 48 21.3 20 20.2 18 ),0.5 10 4 G2 41960 115.6 54.8 47 23.4 20 21.5 19 11.6 10 4.3 41961 115.8 55.6 48 22.2 19 21.5 19 12.0 10 4.5 41962 119.1 56.3 47 22.6 19 23.7 20 11.8 10 4.7 4'1963 120.9 57.0 47 24.2 20 24.2 20 10.9 9 4.6 41964 119.9 55.6 46 24.7 21 24.3 20 ,10.5 ' 9 4.9 4(a) The terms "addetti operai" and "Altri, dipendenti" h'aVe> , been tra~sla,teJ'as"directly employed" and "indirectly employed". ' Rounding l).~s caused a few l;!1ightdiscrepancies in totals. The figures do not include employees of artisanconcerns, which are estimated at about 10,000. ' ,Source; Derived from tables published in L8.niera p ' Anno 77 pN.10 p October1963 pp. Ip175, and Aiulo 78 p N.6 p June 1964. p. 667.

- 9 ­Table No. 4

EMPLOYMENT (a) IN THE ITALIAN WOOL TEXTILE INDUSTRY

1956 to 1964

At endof year

1956

1957

1958

1959

1960

1961

1962

1963

1964

Men Women Tota.l

'000 '000 '000

37 50 87

44 54 98

44 52 96

48 55 103

48 55 103

49 56 105

50 58 108

50 57 107

46 50 96

(a) Includes wage-earning operatives, foremen, engineersand maintenance staff, but excludes administrativestaff and employees in dyeing and finishing.

Source: Estimates published annua.lly by the CommonwealthEconomic Committee and the International WoolTextile Orga:nization in Wool Statistics.

According to Wool Statistics, only the U.K.(138,000) and Japanese (128,000) wool textile industriesexceed the Italian in size of labour force. When figuresfor production are related to numbers employed, productivityper head appears to be higher in Italy than in the U.K., andapproximately the same as in Japan and France. It lags somedistance behind the U.S.A.(7)

(7) This comparison cannot, of course, take into accountthe influence o~ the number o~ shifts and hours workedin the various countries.

- 10 -

11 CONSUMPTION OF RAW MATERIALS AND SOURCES OF SUPPLY

Salient Features

Italy ranks fifth in importance as a consumer ofwool among the countries of the non-Communist world. Thewool textile industries in both the U.K. and the U.S.A. inrecent years have used roughly twice Italy's total, sometimesmore. In 1964 Italy consumed l79.6m lb. of raw wool, cleanbasis, the U.K. 418.3m lb. and the U.S.A. 319.8m lb. Japanand France have exceeded the Italian figure each year byamounts varying in the vicinity of lOOm lb.

More significant than the total quantity consumed,however, is the rate of expansion in Italy's use of raw woolin the ten years up to '1964, especially in relation to trendsin other countries. The increase from 118.6m lb. in 1954 to190.8m lb. in 1963 implies a rise of some 60%, though worldconsumption, as estimated by the Commonwealth EconomicCommittee, was only 30% higher in 1963 than in the earlieryear. Only in Japan, where consumption almost trebled, wasthere a more striking development than in Italy; usage in1963 in the U.K. and the U.S.A. was at much the same levelas it had been ten years before. Among the other EECcountries, Belgium'alone recorded a substantial improvement(30%) but the total used by that country's wool textileindustry is less than half the Italian figure. There waslittle change in West Germany, a minimal increase in Franceand a decline in the Netherlands.

Nevertheless, in spite of its greatly increasedconsumption, the proportion of raw wool to the totalmaterials used by the Italian wool textile industry hasremained fairly stable at a~ound 38%, slightly more in themiddle years of the period. It was highest in 1958, a yearmarked by a fall in wool prices. The ratio has been con­sistently well below that of the other major wool textileproducing countries; iri 1964 the average for the elevenleading consumers of raw ,wool, including Italy(8) wasestimated by the Commonwealth Economic Committee at 51.9%,Austria with 70.9% had the highest pr.oportion, followed byJapan and Belgium each with 69.6%.

(8) Austria, Belgium, France, West Germany, Italy, ,Japan, theNetherlands, Portugal, Sweqen, the U.K. and the U.S.A.

- 11 -

A low or declining proportion of raw wool usage isusually associated with a growing consumption of man-madefibre by the wool textile industry; thus in Sweden, wherethe proportion of raw wool used is even lower than in Italy,man-made fibre in 1964 constituted more than one-third of thetotal raw materials used. In the Netherlands and the U.S.A.the ratios were 37.3% and 37.6% respectively. In Italy,however, though the quantity of man-made fibre employed rosein most years, its share of the total remained low. In 1964,when the ratio of man-made fibre to the total returned to the1954 high of 10%, the increase appears to have been achievedat the expense of non-virgin rather than virgin wool. Onlyin the Japanese wool textile industry, where in any case avery high proportion of raw wool is used, is the ratio ofman-made fibre to total raw~aterial consumption smaller thanin Italy.

The outstanding characteristic of consumption inthe Italian wool textile industry is the use of a highproportion of non-virgin wool, chiefly re-used fibre recov­ered from garnetted rags. Even at the reduced proportionof 36% in 1964, the share of non-virgin wool was muchlarger than in the wool textile industry of any other countryand higher also than the average (of 17.4%) for the elevenleading producers already mentioned.

Table No. 5 shows the total quantities of thevarious raw materials used by the Italian wool textileindustry, together with the proportion which each bears tototal consumption, for the years 1954 to 1964 inclusive.The expansionary trend in the use of raw wool which began in1957 is attributable to greater activity in the worstedsector; two years later a marked increase in the consumptionof non-virgin wool signalled the boom in the Prato woollenindustry. The fall in total consumption of raw materialsin 1964 reflects the general economic troubles of that ye~r.

.,

Table No. 5

CONSUMPrION OP RAW MATERIALS: ITALIAN WOOL TEXTILE INDUSTRY:

ANALYSIS BY WEIGHT AND SHARE OP TOTAL CONSUMPTION

1954 to 1964

Raw Wool and Non-virgin "Other"Year Pine Hair Man-made Fibre (b) Total (d)(clean basis) Wool (a) Pibre (c)

m.lb. % m.lb .-, % m.lb. % ms Lb , % m.lb. %1954 118.6 38~3 103.1 33.5 30.5 9.8 57.0 18.4 309.8 100

1955 113.3 38.9 103.1· 35.6 26.5 9.1 48.3 16.6 291.6 100

1956 126.8 39.0 113.3 34.8 27.1 8.3 58.1 17.9 325.4 100

1951 161.0 42.3 116.9 30.7 32.1 8.6 70.1 18.4 380.7 100

1958 156.1 .43.7 108.2 30.3 30.7 8.6 62.0 17.4 357.0 100

1959 . 178.5 42.1 137.432.4 37.8 8.9 70.4 16.6 424.0 100

1960 191.9 40.0. 181.9 36.8 45.4 9.2 69.1 i4.0 494.2 100

1961 181.4 38.1 185.6 39.0 42.7 9.0 66.0 13.9 475.6 100Non- Cellulosic - Non- 'Cellulosic

- Cellulosic- Cellulosic

1962 199.5 40.3 184.6 31.3 17.1 26.6 3.5 5.4 67.0 13.5 494.8 100

1963 1-90.8 38.3 199.2 40.0 17.1 22.6 3.4 4.5 68.2 13.7 498.0 100

1964 - 179.6 3$.4· . 168.1 36.0 22.8 - 24.2 4.9 5.2 72.8 15.6 461.5 100

{a) Noils, br.oke-n topsl waste, shoddy ~nd all other re-used or re-processed wool~ (b~ Includes wa~tebut excludes to_ps. (cl All natural fI:hre (raw and waste) ,other than wool and fUle haLr, but exc IudLngtops. _(-do) Includes a small element of -double counting.

Source: Commonwealth Economic Committee, International Wool Textile Organisation and International Wool·study Group, Wool Statistics (annual).

....I\)

- 13 -

Table No. 6 gives a further breakdown of the rawwool and non-virgin wool categories of consumption.

Table No. 6CONSUMprION OF SPINNABLE WOOL RAW MATERIAL:

ITALIAN WOOL TEXTILE INDUSTRY·1954 to 1964

Year Pure and Mixed Scoured Wool Pure and Mixed Pure and MixedWool Tops for Carding: Re-used Wool Wool Waste

m.lb" m.lb. m.lb. m. lb.

1954 79.9 31.-5 80.3 23.4

1955 75.6 30~9 80.7 23.0

1956 86.1 30.5 91.2 22.0

1957 96.1 ·3(.3 93.0 23.9

1958 87.8 29.3 79.3 28.9

1959 115.0 35.2 108.5 28.9

1960 118.7 4705 153.3 28.5

1961 123.9 45.4 151.8 33.8

1962 133.9 56.9 148.8 35.8

1963 . 127.1 58.2 158.3 40.9

1964 126.6 60.1 128.0 40.0

Source: Derived from figures published in Laniera.

Raw Wool and Fine Hair

Local Production

Italian sheep numbers were less than eight millionin 1962; in general, sheep are raised for meat and milkrather than for wool. L,a~iulIl, Sardinia and Apulia are thechief wool-producing regions. Though some breeds, e.g. theVissana, Sopra-Vissana and the Gentile of Apulia, producefibre suitable for textil~ ~an¥facture, more than half thewool shorn is used for other purposes, e sg , mattress and felt­making. As Table No. 7 shows, the contribution which. localproduction is able to mak~ to the raw wool requirements of thewool textile industry is sm~ll and is declining, a gradualimprovement in production per head notwithstanding.

- 14 ­Table No. 7

ITALY: SHEEP NUMBERS, TOTAL WOOL PRODUCTION

AND PRODUCTION PER HEAD

1954 to 1962

Year

1954

1955

1956

1957

1958

1959

1960

1961

1962

Woolled Sheep(a)

'000

9,452

9,042

8,572

8,626

8,393

8,343

8,231

8,065

7,857

Total Wool Production(greasy basis)

'000 lb.

31,254

28,832

27,580

26,968

27,457

27,897

27,943

28,095

27,106

Productionper head(b)

lb.

3.3

3.2

3.2

3.1

3.3

3.3

3.4

3.5

3.5

(a) At 31 October or31 December of year stated.(b) Simple average.

Source: Derived from figures published in the following:Istituto Centrale di Statistica, Annuario diStatistica Agraria, 1957, 1963, 1964; Laniera,Anno 77, N. 11, November 1963.

Imports

Italy is dependent uponits supplies of raw wool and finethe raw wool imported is greasy;(about 7%) is scoured. The chiefare Belgium, France and the U.K.

imports for the bulk ofhair. The greater part ofonly a small proportionsuppliers of scoured wool

Table No. 8 shows the total amounts of raw woolimported in the years 1954 to 1964 together with the mainsources of supply and their relative significance. Theseimports, as' Table rNo .,,9 shows, increased by more than one-third

Table No. 8ITALY: IMPORTS OF RAV VOO~: BY MAJOR COUNTRIES OF ORIGIN

1954 to 1964-(actual weight)

Year Total Australia South Africa New Zealand United France Argentina UruguayKingdom

m lb. % .ni"lb. %' m lb. % m lb. % m Lb', % m lb. % m lb. %- ID lb. %1954 100.6

,9.6 6.8169.6 100 59.3 24.7 14.6 14.1 8.3 5.7 4.0 1.5 ' 0.9 4,.3 2.5

1955 ' i55.,6\. 'lOO 87;7 _5~~4 19.5 12.6 11.0 :7.0' .10.7 6.9 7.6 4;9 6.6 ," 4.3' 2;8 L8', ,

1956" 17,6.8 100 93~4 '52.8 20.8- 11.8 17.1 9.7 12.5 7.1 13.4 - -1.6 : 4.4 2..5 "'5.8 ' , 3.3

1951 16.5' -12.1 ' 4.8 6.1' -

250.1 '100 14,5.8 58.3 ,23.4 9.4 6.6 20.3- 8~1,' 15.4 6.6 2.61958 214~7 lOO, ' 122.4 57.0 22.2 10.3 20.4 9.5 14.5 6.8 17.6 ' 8.2 6.3 2.9 4.0 1.91959 '252.7 100 1-21.8 48.2 ' 23.4 9.3 26.9 10.~-; , 13.8 5.5 27.2 10.8 25.2 10.0 4.2 1.6 "

1960 ,,279.0' lOO, 135.1 48 ..4 27.8 10.0 25.6 9.2' , 18.4 6.6 30~7 H.O 25.5 ' '9.1 3.6 1.31961, ','261.1' 100 116.4 44~6 29.6 U.~3 25.6 9.8, 15.6 6.0 30.4 11.7 27.8 10.7 5.1 2.0

~ -, " .

196? 310.2 100. 141.8 45.7 35.4 11.4 40.3 13.0 ' 18.6 6.0 30.0 10.0 25.6 8.3, 3.1 1.0(a) , ( b) (b)

1:963' 303.8 100 124.4; 41,.0 35.7 11.7 42.2 13.9 : 20.3 6.7 32.2 10 •.6 ,28.8 9.5 3.2 1.0, (al: (b) '.-, ,., ' (1,>,) --

.~ .12.'7'1964 ', ,274.6 100 129..2 47.1 35(5 12.9 34.9 ~ 13.2 4.8 23.1 8.4 6.2 2.3 n.&o n.ao

la) b) , '

-: : .....(a) 'SUbject to ,re,vision. " (b) Greasy wool only. ,Source: Caicula"t,ed ,from official Italian trade statis:;t:i,cs. The tariff items used were as follows:

1954, 1-955. 1956, 1957. 1958: c.ap. Ll11: Lane in massa - sud'I ce e 1avate a do s so (2409), " - lavate afondo (2410)

1959.; 1960, 1961: Cap. 53, 01: Lane in ma'ssa'_ sudice e 1avate a dosso (2941), " - .Lavate a fondo (2942)

1962, 1963: Cap•.53 9 01: Lane in massa ,,;.sud.lce e 1avate a dosso (01 9 02)- lavate a fondo (03 9 06)

. 1964: ,Cap. 05.3 9 ° 1: Lane in massa - sucide«>Ol)- lavate 'a; dosso (002)- 1avate a fondo non carbonizzate (003)- lavate a fondo carbonizzate (006).

....VI

- 16 -

in total cost over the eleven years but represent a decliningproportion (3% in 1964) of Italy's total import bill.

Table No. 9

VALUE OF IMPORTS OF RAW WOOL(a) AS PERCENTAGE

OF TOTAL ITALIAN IMPORTS

1954 to 1964

Year

1954

195·5

1956

1957

1958

1959

1960

1961

1962

1963

1964

Raw WoolImports

'OOOm. lire

93.1

7803

83.5

131.5

92.3

9507

117.3

140.0

123.7

130.6

13403

Total Ital ianImports

'OOOm. lire

1,524.4

1,694.6

1,984.0

2,296.0

2,009.8

2,105.3

2,953.2

3,264.5

3,791. 8

4,743.6

4,519.6

Value of RawWool as Per­centage ofTotal Imports

%6.1

4.6

4.2

5.7

4.6

4.5

4.0

3.2

3.3

2.8

3.0

(a) Greasy and scoured.

Source: Istituto Centrale di Statistica, Statistica Mensiledel Commercio con l'Estero.

Australia is by far the most important supplier,but it was contributing a notably smaller proportion of theaggregate at the end of the period than in 1954. Preliminaryfigures indicate that total imports in 1964 ~pproximated

275m lb. or 10% less than in the previous year; this is inline with the decline in consumption which became evident in1963. Imports from Australia rose both quantitatively andproportionately in 1964; at about 47%, Australia's share ofthe total appears to have been larger than in any year since

- 17 -

1960. New Zealand and South Africa steadily increased theirproportions of the total Italian raw wool imports in thelatter years of the decade, though New Zealand's share fellin 1964.

In addition to the raw wool imports shown inTable No. 8, the Italian wool textile industry has madeincreasing use of fine hair for high fashion fabrics.Imports rose steadily from Im lb. in 1954 to almost 9m lb.in 1963, but in the following year were reduced by approximatelyone-third. South Africa is consistently the chief supplier.

Semi-processed Wool

As Table No. 6 indicates co~sumption of tops bythe Italian wool textile industry reached a peak of 134m lb.in 1962. Local production satisfies the greater part ofrequirements and provides small quantities for export, butin recent years there has been a steep rise in net importsof wool and hair tops, mainly from France and Uruguay, toabout 2lm lb., (see Table No. 10). Australia, from which 7%of the 1954 total was imported, now supplies a negligibleamount.

Italy also imports 10-11m lb. annually of wool andhair waste from other countries of the EEC and from the U.K.Small quantities (2m lb. in 1964) of carded wool and hairare obtained from France and Latin American countries.

Non-virgin Wool

The rise in the proportion of non-virgin wool (i.e.pure and mixed re-used wool and wool waste) from about 34%to 40% of the total raw materials used 'in the 10-year periodended 1963 emphasizes the importance of the woollen sector ofthe industry. The bulk of the rags from which fibre is re­covered is imported in the course of the season running fromJanuary to October, with peaks in March and August, and thematerial is entirely proceSsed within the country; verylittle mungo and shoddy is imported as such.

ITALY

- 18 -

Table No. 10

IMPORTS OF WOOL AND HAIR TOPS

1954 to 1964

Total Major Sources of SupplyYear UnitedVolume Value France Kin.Qdom Uruguay

m i Lb • m... lire m.lb. % m.lb. % m c Lb , T1954 11.2. 10,746 4.7 42.6 2.2 19.8 1.0 8.8

1955 8.9 7,550 3.1 34.7 1.6 18.4 1.4 16.0

1956 9.6 7,'631 3.6 37.7 0.7 7.7 3.7 38.8

1957 5.9 5,640 2.3 38.7 0.9 15.7 1.8 30.2.

1958 4.Q 3,480 1.4 30.2 1.7 36.6 0.6 13.9

1959 12.2 8,844 4.6 37.7 2.7 22.4 2.4 19.3

1960 9.6 7,442 4.5 46.7 1.9 19.9 1.0 10.7

1961 12.9 8,988 5.1 39.4 1.2 9.2 4.3 33.6

1962(a) 14.5 10,565 6.2 42.5 1.5 10.3 3.0 21.0

1963(a.) 20.7 " 15,054 6.7 32.2 1.9 9.4 5.0 23.9

1964(a) 21.4 18,100 5.6 26.2 0.5 2.6 6.1 28.7

(a) Subject to revision.

Sources :Istit~to Centrale di Statistica, Rome, StatisticaAnnuale del Commercio con l'Estero and StatisticaMensile del Commercio con l'Estero; CommonwealthEconomic Committee, London, Wo~Trade in Wooland Wool Textiles 1952-1963, London, H~M.S.O., 1965.

Since it has not been possible to ascertain howmuch spinnable non-virgin wool is obtained annually from rags,Table No. 11 shows trends in imports of the three categoriesof rags during ~he 10-year period. Total imports, which hadbeen risifig steadily for some years, reached a peak in 1957but have f:aIlen in most subsequent years. The rags of "animalorigin" (i.e. mainly wool) together with an unknown proportionof those of man-made fibre and mixed origin are those whichare used in the wool textile industry. The U.S.A. suppliesalmost half the total, but the U.K., Japan and European

- 19 -

countries are also important sources. Though imports of woolrags were some 30% higher in 1964 than in 1954, the trend hasbeen generally downward in recent years t in contrast to asteeply rising movement in imports of rags of man-made fibreand mixed origin. This suggests on th~, one hand that increasedlocal supplies of wOol rags are reducing the need to importand on the other an increase in the use of "mixed" as opposedto "pure" re ....used woOl.

Table No. 11

ITALY: IMPORTS OF'RAGS

'1954 to 1964

Year Total AnimalOrigin

VegetableOrigin'

Man.:...madeFibre and

Mixed Origin

'%100

100 ,

100100

100

100

100.

100

100

100

lOO

'!D. lb.

1954

1955

1956

1957

1958

1959

1960

1961

1962

1963

1964

(a)

(a)

(a)

m.lb.

192.7

233.1

254.3

327.6

218.8

296.4

317.0

309.9

309.7

309.0

291.'4

m~lb.

60.1

100.9

118.,8. ':.

'158.2

94.5

126.9

98.7

77.589.9

77.8

76.0

%31.2

43.3

46.7

48.3

43.2

42.8

31.1

25.0

29.0

25.2

26.1, '

%59.5 30.9

75.4 .32.3

,61 ~ 826.7

63.6 19.4

46.0 21.'0

61.8 20.9

76.6 24~2

71.8 23.2

70.6 22.8

60.0 +9.4

, 5,1. 4,', 17.6''; I

m.lb.

73.1

56.8

67.7

105.8

78.3107.7

141~7

160.6

149.2

171.2

164.0

%37.9

24.4

26.6

32.3

35.8

36.3

44.7

51.8

48.2

55.4

56,.3

(a) Subject to revision.

Source: Derived from figtires pUbl{~hed ~y is~ittito CentralediStatistica in Statistica Annuale del Commerciocon llEster~ and. in Stati'stic.a Mensile'delCommerciocon I' Es t e r o., "

- 20 -

Man-made Fibre

The trend in pure man-made fibre usage followedfairly closely the trend in raw wool consumption in theItalian wool textile industry in the period under review.In common with raw wool, man-made fibre is used chiefly inthe worsted sector where expansion began in 1957. Thewoollen sector tends to conSume man-made fibre in re-usedforms for which separate statistics are not available. Itis likely that much larger quantities of man-made fibre thanare apparent from Table No. 5 in fact find their way intowoollen spinning under the heading "other fibre".

Much of the wool textile industryL s requirements ofpure man-made fibre are met from domestic production (seeTable No. 12). In ihe early years of the period the man­made fibre used was largely rayon and acetate; but rapidlyincreasing use has been made of the synthetics in recentyears.

Local Production

The Italian wopl textile industryL s comparativelack of concern with man-made fibre is not due to anyshortage of cellulosic and non-cellulosic supplies, sinceItaly ranks fifth among the non-Communist countries as aproducer of rayon and acetpte and sixth in output ofsynthetic fibre. In production of synthetic fibre Italydoes not lag far behind the U.K., which uses both a verylarge quantity and a relatively high proportion (12.1% oftotal raw materials consumed in 1963 compared with Italy's4.9%) of these fibres in its wool textile industry. Amongthe countries of the EEC, only West Germany manufacturesmore of both of the main categories of man-made fibie.

netails of man~made fibre production in Italy from1954 to 1964 are shown in Table No. 12.

The man-made fibre industry in Italy.is about 40years old; it produces today some 200 brands of .fibre andyarn, including mineral fibres, e.g. Atelana from lava, andVetrotex fibre. About thirty firms are engaged in theindustry, some of them very large-scale enterprises. Amongthe best-known are firms with internati04~1 ramifications,e.g. Montecatini and the Societa Nazionale Industria App­licazione Viscosa (Snia Viscosa) which ~anufactures artificialand synthetic fibres.

Table No. 12ITALY: PRODUCTION OF MAN-MADE FIBRE

1954 1:.0 1964

Viscose, Synthetic Fibre· TotalYear Acetate and Man-madeCuprammonium (M~:~:~~a) Polyamide Polyvinyl Polyester Polyacrylic Polypropylene Total FibresRayon

md,b. ···m.lb. m.lb. m. lb. m. lb. m.lb. m.lb. m. lb. m.lb.1954 28.4.8 7.8 1.6 1.8 - - - 17.2 302.01955 298.1 6-.7 10.5 1.7 0.1 - - 19.0 317.11956 339.7 7.4 15.8 1.9 0.5 - - 25.6 365.31957 330.3 12.4 . 19.9 2.1 1.0 _. - 35.4 365.71958 310.9 9.7 28.4 1.8 2.2 -. - 42.1 353.0

1959 351.7 6.1 42.7 3.2 4.2 - -. 56.2 407.9

1960 365.7 6.9 55.9 3.8 7.1 1.7' - 75.4 441.11961 392.5 9.1 66.2 4.5 11.1 4.2 - 95.1 487.6

1962 429.9 10.3 94.5 4.9 . 16.6 7.9 7.1 141.3 571.21963 452~5 11.7 114.0 6.0 18.a 15.3 8.8 174.0 626.5

1964 48109 13.8 136.8 7.4 24.6 29.3 14.4 226.3 708.2

Source: ,Converted from figures published regularly in 24 Ore, Milan.

~"

N....

-.-I

- 22 -

Though Montecatini began the manufacture of apolyamide, Nailon, in 1938, the man-made fibre industrybefore World WarII was almost entirely concerned with theproduction of cellulosic fibre, this being encouraged byMussolini's government. In modern times the cellulosicscontinue to dominate production, but in 1963 the rate ofincrease in the Italian output of rayon staple was less thanthe world rate, and growth is now concentrated in thesynthetic fibreso

In 1954, output of syntheticsamounted only to 17m lb.,consisting of polyamide and casein fibre in about equalproportions, with a very small quantity of polyvinyl fibre.By 1964, though polyamides constituted 60% of the total outputof 174m lb. of synthetic fibre, the output of the acrylics andof poly-propylene, was rising very rapidly. The manufacture ofacrylics did not begin until 1960 in Italy, when Leacrilstaple and tow was produced by a joint D.S.-Italian venture,Applicazioni Chi.m i che. S.p.A., at Port Marghe r a , In 1963,Snia Viscosa produced experimentally a new modacrylic staplecalled Velicren, for which a new plant is being built inSardiniao Other firms are also reported to be interested inproducing the fibre, which finds its chief outlet in knitwear.

Polypropylene was invented and developed byMontecatini's scientists some ten years ago; it has beenused mainly in industrial application and a plant was builtfor its production at Brindisi. Commercial production of thefibre, to which the name Meraklon was given, was not substant­ial until 1962; it increased markedly in 1964.

Polyester output, chiefly Terital (the Italianequivalent of Terylene) yarn and staple, has also expandedduring the period under review, particularly in the 1960s.With the expiry of the patents held by the Mon~ecatini sub­sidiary Rhodiatoce in September 1965, other firms are expectedto begin production.

Merinova, formerly known as Lanital, is produced bySnia Viscosa from skim cow's milk. It is not used alone butis blended with one or more other fibres; e.g. wool, viscosestaple and the polyamides, for the production of fabrics,knitwear and felts. When used with wool, the proportion ofMerinova may be as high as 40%. Interest in casein fibrediminished between. 1957 and 1961. Output has risen in recentyears but very slowly in comparison with other man-made fibres.

- 23 -

The man-made fibre industry in 1963 exported some104.6m lb. (approximately 16% of output) while imports, whichincluded acrylics such as the German Dralon and Du Pont Orlon,totalled 39.4m lb. The synthetic fibre sector relies moreheavily upon export trade than do the cellulosic fibremakers,and markets are found in Europe, the Middle East and Asia.A heavy fall in domestic demand in 1964 led to an exportdrive to dispose of the greatly increased output, and it islikely that the proportion of production sold abroad rosesteeply as a result.

The industry as a whole is r~ported to be exper­iencing difficulties similar to those of the wool textileindustry in that labour cqsts have increased and competitionin export markets, especially from the Japanese, hasintensified. Rivalry within the. industry itself is extremelykeen. .

The progress being made in the newer syntheticfibres, particularly the acrylics, suggests that they may tosome extent replace rayon and acetate in blends with wool forworsted spinning and, givenfavo"\lrable conditions, may· enlargethe share· of. man-made fibre in total raw material consumptionby the wool textile industry•. Capacity for the manufactureof the synthetic fibres is expected to reach 33lm lb, iri1965, implying the addition of almost 50% to the previousyear's capacity. Little expansion is planned for rayon andacetate plants. (9)

(9) Textile Economics Bureau Inc., New York, Textile Organon,Vol.Xxxy, No. 6, June 1964.

- 24 -

III TRENDS IN ITALIAN PRODUCTION

The, EEC Context

In relation to total output by the EEC countries,Italy produces each year in the vicinity of 25% of the pureand mixed wool tops, 25% of the yarn spun on the worstedsystem, 45% of the yarn spun on the woollen system and 30%of the worsted and woollen fabrics taken together. TableNo. 13 gives details of production by country for the years1956 to 1964.

Italy's output of pure and mixed wool tops and ofyarn spun on the worsted system is exceeded only by France.The upward trend in worsted yarn, evident in most years ofthe past decade, has moreover been most pronounced in Italy,where in 1964 output reached a peak of 144m lb. This contrastswith falls in that year in the other EEC countries (exceptWest Germany) and in the aggregate for the EEC.

On the other hand, though Italy's woollen yarnoutput still exceeds by a considerable margin the Frenchand West German outputs combined, it suffered a severe fall(some 22m lb.) in 1964, while~utput remained stable in the wooltextile industries of the other countries of the Community.The situation in regard to the production of fabrics showscertain similarities to that for woollen yarn. Though 1964saw diminished activity in the weaving of wool fabricseverywhere in the EEC except in Belgium-Luxembourg, the fallwas most marked (18m lb.) in Italy. But, again, none of theEEC countries matches Italy's production in terms of weight.

Table No. 14 (see page 26) shows the irregularupward trend in Italian output of tops for the years 1954 to1964 inclusive. Successive falls in 1963 and 1964 reducedthe total to its lowest point since 1958. The production isalmost entirely absorbed by the local wool textile ind~stry,

though there is also some combing of tops on behalf offoreign wool importers.

~ 25 -

Table No. 13COMPARISON OF PRODUCTION BY THE WOOL TEXTILE INDUSTRIES OF EEC COUNTRIES

1956 to 1964

Year Italy. Belgium- France West Netherlands TotalLuxembourg Germany EEC

m.lb. m.lb. m.lb. m.lb. m.lb. m~lb.

Tops (a)

1956 96.2 47.9 187.0 90.3 3.8 425.41957 113.9 52.0 208.1 92.9 4.9 471.81958 104.7 46.3 173.0 74.3 4.8 403.11959 115.3 49.3 177.4 75.7 4.9 423.01960 132.9 55.7 192.7 ' 84.3 4.6 471.21961 125.7 57.8 190.2 77.3 4.0 455.11962 130.8 62.8 182.2 80.1 3.5 459.51963 121.7 63.4 183.6 91.3 3.4 ' 463.71964 109.6 61.5 163.4 89.4 2•.6 426.6

Worsted Yarn (b)1956 88.4 58~7 171.0 110.0 19.7 447.81957 100.0 61.5 '189.6 117.1 19 ..2 487.51958 92.2 50.9 157.3 99.6 18.8 418.81959 121.3 64.2 172.7 113.0 23.1 494.31960 126.1 74.1 194.5 120.7 22.6 538.01961 132.1 78.6 203.3 117.5- 23.6 551.11962 143.0 86.1 204.1 125.1 23.4 570.81963 137.7 94.7 221.6 132.2 27.3 613.51964 144.1 86.2 198.3 137.7 24.5 590.7

Woollen Yarn (b)

1956 198.2 41.3 142.1 149.8, 45.9 577.31957 221.8 42.4 149.4 156.2 4.... 0 613.81958 206.5 33.0 138.6 135.3 38.8 552.21959 246.3 38.3 127.9 137.2 42.0 591.61960 303.1 37.9 120.6 140.4 40.2 642.11961 298.2 40.6 120.8 133,.2 40.6 633.61962 305.4 4.4.1 116.6 127.9 41.5 635.71963 319.6 47.6 127.6 119.1 44.7 ,658.61964 297.3 51.1 126.3 120.7 44.8 640.1

(d) ,

Fabrics (c)-

1956 183.7 38.3 149.1 ' 139.7 60.1 571.11957 190.9 /38.6 168.9 145.1 57.9 601.41958 170.0 29.5 161.2 123.9 55.5 540.11959 199.1 32.8 149.3 lJO~2 63.5 574.91960 195.7 33.4 ' 149.5 133.2 ' 60.6 572.31961 186.0 37.4 152.5 142.8 62.8 581.41962 194.3 38.0 153.8 140.2 69.6 595.91963 190.1 42.1 170.1 122.4 63.9 588.71964 , 172.5 42.7(d) 166.6 115.1(d) 63.4 560.4

(a) Excludes tops of "other" fibre.' (b) Includes pure wool and mixed yarn andyarn of' "other" fibre.. (c) Includes felts, blankets, fabrics for apparel, furnish-ings, slippers and technical uses. '-(d) Provisional. ,Sources: Derived from figures published in Laniera, Anno 76, N.6, June 1962 {1956

, and 1957} and in Industrie Lainiere de la Communaute EconomigueEuopeenne, Supplement au No. 1072 d'Avril 1965 de la revue IndustrieLainiere Francaise (1958-1964 inclusive).

, . '

- 26 -

Table No. 14

ITALIAN WOOL TEXTILE INDUSTRY: PRODUCTION OF TOPS

1954 to 1964

Year

1954

1955

1956

1957

1958

1959

1960

1961

1962

1963

1964

Pure Wool and Other Fibre TotalWool Mixtures

m.lb. m s Lb , m.lb.

n.a. n.a. 99.6

n.a. n.a. 89.3

96.2 11.7 107.9

113.9 13.7 127.6

104.7 10.3 115.0

115.3 12~7 ·128.0

132.9 13.0 145.9

125.7 9.2 134.9

130.8 12.6 143.4

121.7 14.0 135.7

109.6 17.1 126.7

n.a., not available.

Sources:II

Derived from figures published in Laniera (various··issues) and in "Progress and Prospects of the ItalianWool Textile Industry", by Roberto Dodi, in.Review of the Economic Conditions in Italy, Vo1.XIII, No. 6, November 1959.

If it may be assumed that the tops ~£ "other" fibreare largely of man-made material, it appears that at least35% of the total man-made £ibre consumed by the wool textileindustry is used in the combing sector; probably much more,since the composition bt the mixed tops cann~t be asbertained.It is noticeable that the outp.ut of the tops of other fibrecontinued to increase even when', as in 1963 and 1964, totaltops output and output of pure wool and mixed tops fell tsharply. In 1964, as Table No. 15 shows, tops of other fibreconstituted mo~~ than 13% of the total output~ Sinbe, however,

- 27 -

the proportion of yarn of other fibre spun on the worstedsystem and of worsted fabric woven from other fibre are notof similar magnitude f the implication is that a considerablequantity of these tops are used in the prodricticin of mix~d

;yarns.

Table No. 15

ITALIAN WOOL TEXTILE INDUSTRY:

PRODUCTION OF TOPS OF "OTHER" FIBRE

1960 to 1964

Year Tops of "Other" Fibre

ms Lb , a of' total tops

1960 13.0 8.9

1961 9.2 6.8

1962 12.6 8.8

1963 14.0 10.3

1964 17.1 13.5

Source: Derived from figures published regularly inLaniera.

Though separate statistics for pure wool tops arenot available f the Italian Wool Association neverthelesspublishes figures for worsted and wool yarn of pure wool(see TableNo~ 16).

The total output of worsted yarn rose with littleinterruption in the period under review f reaching a peak in1964. Production of pure wool yarn has, however f beenstationary for the past two years, and in 1964· it representedonly 67% of the total compared with 80% in 1956 •. Since yarnof other fibre produGed ~n the worsted system is of littlesignificance (see Tabl'e No. 17, page 29): it follows that mixtureyarns are becoming of. increasing importance and were aloneresponsible for the rise in productio~. achieved in 1964.

- 28 -

Table No. 16

ITALIAN WOOL TEXTILE INDUSTRY: PRODUCTION OF YARN

1954 to 1964

On the Worsted System On the Woollen System

Year Mixture~ MixturesPure and of Total Pure and of Totalwool "other" wool "0 the r "

fibre fibrem.lb. m.lb. m.lb. m.lb. m.lb. m; lb.

1954 n.a. n.a. 83.1 n.a. n , a. 191.3

1955 n.a. n.a. 80.1 n.a. n.a. 181.3

1956. 70.2 18.2 88.4 54.4 143.8 198.2

1957 77.4 22.6 100.0 57.4 164.4 221.8

1958 70.2 22.1 92.3 47.8 158.7 206.5

1959 88.1 33.2 121.3 50.2 196.1 246.3

1960 91.0 35.1 126.1 63.8 239.3 303.1

1961 91.1 41.0 ·132.1 59.5 238.7 298.2

1962 99.3 43.7 143.0 71.1 234.3 305.4

1963 96.7 41.0 137.7 78.3 241. 3 319.6

1964 96.7 47.4 144.1 79.2 218.1 297.3

n.a., not available.

Sources: Derived from figures published in Laniera {variousissues} and in "Progress and Prospects of the ItalianWool Textile Industry by Roberto Dodi, in Review ofthe Economic Conditions in Italy, Vo1. XIII, No. 6,November 1959. .

In the woollen sector, on the other hand, peakproduction was achieved in 1963. Output in this sector wasat least double worsted yarn production in every year of theperiod. Yarn of pure wool ma i.nt a i.ned a fairly stable shareof about a quarter of the ~otal output; abuut half consistedof mixture yarns and the remaining quarter was yarn of otherfibre. It must be assumed, from the figures·for production

- 29 ­Table No. 17

ITALIAN WOOL TEXTILE INDUSTRY:

PRODUCTION OF YARN OF "OTHERll FIBRE

1960 to 1964

Year On the Worsted System On the Woollen System

m.lb. % of total m.lb. %of totalyarn yarn

1960 2.5 2.0 72.8 24.0

1961 4.5 3.4 81.0 27.2

1962 6~8 .4.8 73.4 24.0

1963 5.3 3.8 73.4 23.0

1964 5.6 3.9 72.7 24.5

Source: Derived from figures published regularly in Laniera.

of woollen woven cloth in Table No. 19 and of carpets inTable No. 21, that the bulk of the yarn of other fibre wasused in mixture fabrics or carpets, or further processedelsewhere in the textile industry. This problem isdiscussed on page 34.

Woven Fabric

Since 1959 there has been some increase in the totaloutput of worsted fabrics, but production of woollens has:declined. Details in-terms of weight, for the years 1954to 1964 are given in Table No. 18.

Yorsted fabric production was· some 50% higher in1964 than ten years previously; : output of woolleIl- fabricson the other hand was lower than in any .other year of theperiod, accentuating a downward movement evident since 1957.In 1964 some 75% of the worsted fabric and about 45% of thewoollen fabric was classified as being pur~ wool. In thepast three years some 10% of the woollen sectorts productionhas contained no wool (see Table No. 1~, page j~).

- 30 ­

Table No. 18

ITALIAN WOOL TEXTILE INDUSTRY:

PRODUCTION OF WOVEN FABRICS(a)

1954 to 1964

Worsted Fabrics llWoollen ll Fabrics\

and, Blankets

Year Mixtures MixturesPure and of Total Pure and of Totalwool tl othe r" wool "other"

fibre fibrem.lb. 'm.lb. m.lb. m s Lb , m.lb. m.lb.

1954 n.a. n.a. 44.0 n.a. n.a. 132.2

1955 n.a. n.a. 41.7 n.a. n.a. 129.6

1956 33.9 10.3 44.2' ·41.9 96.0 137.9

1957 33.9 10.4 44.3 54.8 90.1 144.9

1958 32.8 11.2 44.0 37.7 86.5 124.2

1959 43.2 14.8, 58.0 40.4 98.9 139.3

1960 47.1 17.0 64.1 57.3 71.7 129.0

1961 45.8 16.9 62.7 54.8 65.8 120.6

1962 49.4 21.0 70.4 52.1 69.0 121.1

1963 45.1 17.7 62.8 60.4 63.9 124.3

1964 46.8 15.6 62.4 49.8 57.2 107.0

(a) Including shawls, fabrics for cars and other specialwool products. n.a., not available.

Sources: Derived from figures published in Laniera (variousissues) and in "Progress and Prospects of the ItalianWool Textile .Ind.us t.ry '", by'Roberto Dodi, 'in .Review of the E.c onomic Conditions in Italy, Vol.XIlI No.; ,6"Nove'mber:. 1959.

other Products of the Wool Textile Industry

Production of carpets, felts and related technicalarticles by the wool textile industry is of small account be"':side the production of yarn and fabric; moreover, output hasbeen declining since the peak of 17m lb. reached in 1960.

- 31 ­Table No. 19

ITALIAN WOOL TEXTILE INDUSTRY:

PRODUCTION OF FABRICS OF "OTHER" FIBRE

1960 to 1964

Year Worsted S'ector Woollen Sector

m.lb" % of total m.lb. % of totalfabric fabric

1960 1 ,,3~, 2.0 10.2 7.9

1961 2.1 5.4 7.8 6.5

1962 3.2 4.5 11 .6 9.6

1963 1.6 2.5 14.7 11.8

1964 1.0 1.6 12.3 11. 5

Source: Derived from figures published regularly in Laniera.

Wool and wool mixtures make 'up the greater partof carpet manufactures, btit comprise a smaller proportionof total output than the wool and wool mixture portion ofeither yarn or fabric output. As Table No. 21, on page 33shows, from 28% to 36% of output of carpets in recent yearshas been made from "other" fibre. This includes natural'fibre, such as cotton, as well as man-made fibre.

Knitted Goods and Hosiery

The worsted sector, and to a much smaller degreethe woollen sector, spin yarn for the making of knitted asdistinct from woven fabric, but the knitting industry isconventionally regarded as being separate from the wooltextile industry. The influence of the requirements of theknitting industry on the spinning sector maybe gauged fromthe fact that in: 1964 almost half the worsted yarn produced(10)was devote~ to satisfying those requirements. No officialstatistics of the volume of knitted goods 'and hosiery, either

(10) Since pure wool yarn constitutes the greater part ofworsted yarn production; it is probable that thegreater part of' the knitting yarn is al.so pure wool.

- 32 ­Table No. 20

ITALIAN WOOL TEXTILE INDUSTRY:

PRODUCTION OF CARPETS, FELTS, ETC.

1954 to 1964

Carpets Felts and RelatedTechnical Articles

Year Mixtures MixturesPure and of Total Pure and of Total'Wool "other" wool "othe r"

fibre. fibrem.lb. ms Lb , m.lb. m.lb. m.lb. m.lb.

1954 n.a. n"a. 15.3 n s a , n.a. 1.5

1955 n"a" n s a , 13.9 noa. n.a. 1.4

1956 n.a .. n.a. 14 .. 9 n.a. n.a. 1.5

1957 n.a. n.a. 14 .. 3 n.a. n.a. 1.8

1958 n.a. n.a. 12.5 n s a , n.a. 1 .. 8

1959 n.a. n.a. 14.9 n.a. n.a .. 1.8

1960 7.2 9.9 17.0 1.0 1.5 2.5

1961 7 00 7.9 14 0 9 1.'1 1.6 2.7

1962 5.3 8" 1 13.4 1.2 1.5 2.7

1963 5.6 7.7 13.3 1.4 1.7 3.1

1964 5.9 6.6 12.5 1.6 1.5 3.1

n.a., not available.

Sources: Derived from figures published in Laniera (variousissues) and in "Progress and Prospects.of theItalian Wool Textile Industry", by Roberto Dodi,in Review df the Economid-Condition in Italy,Vol. XIII, No. 6, November 1959.

in total or by specific fibre, are availabl-e; but it isclear, if only from ~he ,quantity of yarn for knitting spuneach year on the worsted and woollen systems (shown inTable No o ' 22' 'on page 33), that knitted wooi, gocads·are becom­ing an increasingly important factor in Italian wool textiles.The figure~ su,ggest that in 1964 production of knitted goodsand hosiery of pure and mixed wool' should have been in thevicinity of 80m lb.

- 33 -

Table No. 21

ITALIAN WOOL TEXTILE INDUSTRY:

PRODUCTION OF CARPETS, FELTS, ETC. OF "OTHER" FIBRE

1960 to 1964

Year Carpets Felts and RelatedTechnical Articles

m s Lb , % of total m.lb. TO of totalcarpets felts, etc.

1960 4.9 28.8 0.2 8.0

1961 4.2 28.2 0.2 7.4

1962 4.8 35.8 0.2 7.4

1963 4.1 30.8 0.4 12.9

1964 3.5 28.0 0.4 12.9

Source: Derived from figures published regularly in Laniera.

Table No. 22

ITALIAN WOOL TEXTILE INDUSTRY: PRODUCTION OF KNITTING YARN

1959 to 1964

Year On the Worsted System On the Woollen System

m.lb. % of total ms Lb , % of totalyarn yarn

1959 45.2 37.3 8.1 3.31960 46.5 36.9 9.8 3.2

1961 51.7 39.1 8.0 2.71962 62.2 43.5 6.4 2.11963 65.5 47.6 6.5 2.01964 71.4 49.5 7.8 2.6

Source: Derived from figures published in Industrie Lainierede la Communaute Economigue Europeene, Supplement auNo. 1072 d'Avri1 1965 de la revue Industrie LainiereFrancaise. .

- 34 -Table No. 23 demonstrates by means of index numbers

the rapid growth which has taken place in knitted goods andhosiery (of all fibres) in comparison with product!on of pureand mixed wool fabric and with progress in the textileindustry as a whole.

Table No. 23

PRODUCTION OF WOOL FABRICS, KNITTED GOODS

AND HOSIERY: INDEX NUMBERS

1954 to 1964

Base: 1953 = 100

: Pure and, Knitted TextileYear Mixed Wool Goods Hosiery IndustryFabrics

1954 106.9 96.0 99.4 103~O

1955 97.0 99.9 94~5 94.3

1956 98.6 109.4 104.4 100.1

1957 102.4 129.1' ,,107.7 109.5

1958 94.8 121.3 101.7 104.8

1959 106.2 135.6 120.8 115.4

1960 116.0 143.3 143.8 - 126.6

1961 109.0 142.5 157.7 126.4'

1962 116.7 145.4 161.4 135.5'

1963 112.0 171.4 180.1 139.7

1964 103.5 154.2 195.8 131. 7, .

Sources: Istituto Centra1e d i St.a t Ls t Lc a , Annuario diStatistiche Industriali and Bo11eftirioMensile diStatistica(var i.ou s vis sue s) .' ":',,..'

The Mystery of Yarn Disposal

There are,' however risks .Ln assuming that theproduction ofa given weight of yarn will leadirt:ihe sameyear to the productionof',a similar weightoffahric.'Allowances must be 'm~defor exports and' imi>orts~stocks at 'various s t age s of proces s Ing ,: losses and additions of' fibres

- 35 -etc. in the course of manufacture and finishing. Even so,in this study of the Italian wool textile industry it becameclear that there was a large discrepancy, for which nosatisfactory explanation could be found, between the weightof yarn produced and the sum of its official destinations.

The problem is illustrated below, using averagesfor'the three years 1961 to 1963:

Less yarn exports (wool andmixtures) 6

228Plus

.imports (wool andyarnmixtures) + 2

--

Total yarn producedLess yarn of "other" fibre

Woollen Systemm.lb.

310- 76

234

Worsted Systemm.lb.

138- 17

121

- 12

109

+ 2

III

2307

Total availability of yarn(wool and mixture)

Less yarn for knittingEstimated total availability

of yarn (wool andmixtures) for weaving 223

cf. actual weight of woven fabri-c--(wool and mixtures)produced

III- 60

51

63

In the worsted sector, the excess tif 12m lb. ofwoven fabric produced over the estimated availability of yarnfor weaving may be readily explained by the deduction of the17m lb. of yarn of other fibre. The bulk of this was probably~sed within the industry to produce mixed cloths.

In the woollen sector, however, the weight of wooland mixed woven fabric produced is less than half that of theestimated total yarn available, and the difference ,wO'uld bemagnified were'the yarn of other fibre spun on the woollensystem included. Manufacture of carpets, felts etc. wouldconsume at most 12m lb., leaving the disappearance of about

- 36 -100m lb. of woollen system spun yarn to be explained. Manu­facturing processes causing loss of weight (such as rolling)together with changes in stocks may account for part of thedifference. It is likely too, that official statistics con­siderably underestimate the production of woollen and mixturefabrics by small independent operators. Furthermore, as the100m lb. contains some yarns with low wool content e.g. 80%cotton/2<>% wool yarns, it is reasonable to assume that certainquantities of woollen spun yarn are consumed in cotton weavingand the fabrics recorded as cotton mixture fabrics.

37 -IV TRADE IN WOOL PRODUCTS'

The Home Market

A comparison of figures of production and exportsof woven wool fabric indicates that an overwhelming prop­ortion of recorded output is sold ove r se a.s , . It appe a.r s ,however~ from the discussion on pages 35 and 36~ that thereis a substantial production of woollen fabric which is notrecorded in official statistics. Consumption of importedwool fabrics has risen in recent years (see Table No. 28)and the market for knitted goods appears to have risensharply. Though no statistics of annual production of woolknitted goods are available, one may conclude from thequantities of knitting yarn spun and of knitted goodsexported that the greater 'part of output is consumed on thehome .ma.rket., ,In 1964~ for exampLe , some 80m lb. of woolknitting yarn was produced~ yet only 26m lb. of wool knit­wear and hosiery was exported.

, A recent study of wool consumption in tbe coun­tries of the EEC by t~e13ureau of Agrictil tu':ralEconomics (11 )estimated that wool accounted for 20% or more of thefibre used by consumers in Italy' during most of the decadefrom 1952 to 1961 (consistently a higher proportion thanin any other country of the EEC) and that only in Italywas the loss in consumption of wool caused by fibre com­petition more than offset by market growth. Consumer useof wool per head has risen in Italy but in 1.961 was stilllower than in any other member country except France (seeTable No. 24). Personal expenditure per head on clothingin Italy is the lowest in the Community.

The study co ncLuded that by 1975 Italy'spurchases of wool-type 'gobds would increase in comparison,with 1960 by 49-55%'8.88,' result of changes in populationand income, and that Italy's use of both virgin wool andsynthetics would r1$e.,,' , . '

J( ~ ,

(11:) Wool in th~ EEC.l'.'fW9~1 Economic Research Report No. 6)Canberra,' Se;pte:mpe-rl964.

- 38 -

Table No. 24

ESTIMATED FINAL CONSUMPTION OF WOOL PERHEAD OF POPULATION

(Three Year Centred Moving Averages)1952 to 1961

West Belgium- Nether-Year Italy Germany France Luxem- lands EECbourfl

lb. , lb. lb. lb. ,lb. lb.

1952 2.41 3.46 3.35 4.23 3.70 3.171953 2.59 3.83 3.65 4.37 4.04, 3.451954 2.42 4.,25 ' 3.65 4. ()5' 4.58 3.551955 2.33 4.56 3.71 4.01 5.15 3.671956 2.50 5.06 3.97 4.17 5.43 3.981957 2.67(a) 4.97 4.05 4.33 5.17 4.041958 2.96(a)(b) 4.98 3.83(a) 4.02 4.91 4.031959 3.22(b) 4.83 3.50 4.02 4.47 3.931960 3.48 (b) 5.0,8 3~47 3.86 4.5,6 4.071961 3. 69(b) 5.19 3.43 4.ob . '

4~45 ' 4~ 16"

(a) Adjusted by the B.A.E. to allow for revisions inestimates of mill consumption of wool. (b) Adjustedby the B.A.E. along the lines suggest~dby the F.A.O.in Appendix A of Per C~putFiber ConS1imptionLev~ls,1948-58. ' ~ , ... ' " ",

Sources: Food and Agriculture Organization, Per CaputFiber Consumption Levels, 1948-58; MonthlyBulletin, of. Agri cuI tural Economic sandSiatistic's,·Vql.ll~'~No.l,''Ja.ngary 19,62 andyoL·13, No'. 4, April 1964; 'Organisation'for Economic Co-operation andDevelo~ment,

General Statistios, S~ptember 1963; Bureauof Agricultura1 Economics,Wool in....!he 'EEC. ..(Wool Economic' Re s ea.roh Report No.' 6rca:nberra,September 1964, p , 3 ~ . , ,

- 39 -

Oversea Trade

Woollen and Worsted Yarn

It has already been observed that Italy is theworldts third largest exporter of woollen yarn and fifthlargest exporter of worsted yarn~ The quantity sold abroadin 1964 was equivalent to about 3% and 7% respectively ofproduction o Tables No. 25 and No. 26 show, for the years1954 to 1964, the volume and value of these exports, to­gether with the relative importance of certain majormarkets o In additioni;Italy is a net exporter of smallquantities of yarn made of fine and coarse hair. In1964 the amount exported was 188 1000 lb.

E'xports of woollen yarn were about four times aslarge in 1964 as they had been in 1954 and the average valueper pound improved steadily over the period; slightly morethan half tne woollen yarn exported is classified as con­taining more than 85% wool. Since 1958, however, worstedyarn has contributed the major part, of wool yarn exports,though by contrast with woollen yarn, exports fell sharplyin 1964. The average value per pound of worsted yarnexports has diminished; the bulk of it is of types whichcontain less than 85% wool. It is not clear whether th&sechanges in average values reflect changes in counts ofyarn exported or in types of staple from which the yarnsare spun.

The pattern of distribution has changed in certainimportant respects o For example? India took the greaterpart of woollen yarn exports until about 1956, but WestGermany has now become the market of paramount importancefor both woollen and worsted yarn. In 1964 it took 31% ofthe woollen and 41% of the worsted yarn exports. There are,nevertheless, growing markets in other countries of Europe,the African cOll.tinent, the Middle East, the U.S.A. and theU.S.S.R. ' '

Italy imports comparatively small but increasingamounts of wool yarn each'year, mainly high qualit.y 'worstedyarns from France, the U.K. and Belgium-Luxembourg. In 1964the quantity imported totalled 972,000 lb.

ITALY

Table No. 25

EXPORTS OF PURE AND MIXED ,WORSTED YARN(a)

1954 to 1964

Total Exports Selected DestinationsYear

West SouthVolume Value Germany Sweden . Yugoslavia Africa'000 m.lire '000 % '000 % '000 % '000 %lb. lb. "lb. lb. lb.

, ,1954 792 ];,318 31 3.9 50 6.3 51 6.4 1 0.11955 1,204 1-,687 37 3.0 28 2.3' 537 44.6 33 2.71956 2,630 - 3,802 52 2.0 78 3.0 , 617 23.4 171 6.51957- - 3,470", 5,693 459 13.2 30 0:9 1,089 31.4 320 9.21958 2,841 3,887 544 19.2 10 0.4 560 19.7 150 5.319'59 (b) 6,827 7,672 2,945 43.1 , 93 1.4 433 6.3 446 6.51960 8,739 11,313 . 3,397 38.9 250 2.9 1,167 13.4 586 6.71961 12,464 13,160 3,852 30.9 635 5~1 2,004 16.1 1,425 11.41962(c) 10,140 11,208 4,029 39.7 . 1,059 10.4 848 8.4 424 4.21963(c) 11,882 13,235 5,275 44.4 1,568 13.2 320 2.7 n.a. n.a1964( c) 10,811 13,407 4,380 40.5 " 992 9.2 505 4.7 n.a. n.a

(a) "Excluding yarn of fine or coarse hair (which is believed to accountfor .t.he d i.ffe r e nce between the figures' given here and those published bythe Commonwealth Economic Committee in its World Trade in Wool and Wool

, Textiles 1952-63 " p. 95)" and yarn for retail sale (e. g. hand knitting yarn).Tb) Owing to the introduction of the Brussels nomenclature 'in 1959, thefigures before and after that date are not strictly comparable. In 1959,for example, worsted yarn of wool mixed with other textile material wasincluded for the first time; and some 3m lb. of it wa s exported to WestGermany. (c) 'Subject to revision. n.a., not available.Sources: Derived from figures published by Istit~to Centrale di Statisticain Statistica Annuale del Commercio con l'Estero and Statistica Mensile delCommercio con l'Estero.

~o

Table No. 26

ITALY: EXPORTS OF PURE AND MIXED WOOLLEN YARN(a)

1954 to 1964

Year Total Exports Sel~cted Destinations

Volume Value West Germany . Greece Netherlands South Africa

'000 lb. m.lire '000 lb. % '000 lb. % '000 lb. %- '000 lb. %1954 .2,625 543 162 6.2 1 ·. 2 0.1 32 1.2

1955 3,393 706 582 17.1 •• ·. 13 .. . . ..1956 2,670 .697 854 32.0 .. ·. 3 0.1 3 0.1

1957 4,3-14 1,315 1,620 37.6 6 0.1 43 1.0 5 0.1

19-58 2,564 1,09:6 1,279 49.7 121 4.7 48 1.9 4 0.2

1959(b) 3,077 922 920 29.9 271 8.8 219 7.1 260 8.4

1960 3,775 1,237 812 21.5 532 14.1 405 10.7 564 15.0

1961 6,623 1,793 947 14.3 676 10.2 738 11.1 803 12.1

1962(c) 5,626 1,983 1,119 19.9 751 13.3 912 16.2 n.a. n.a.

1963-{ c) . 7,007 2,654 1,710 24.4 1,273 18.2 1,006 14.4 n.a. n.a.

1964(c) :10,425 4,074 3,233 30.9 1,346 12.9. 1,072 10.3 n.a. n.a., .

(a) Excluding yarn of fine or coarse hair, and yarn for retail sale (e.g. handknitting yarn.) (b) Owing to the introduction of the Brussels nomenclature in1959, the figures before and after that date are not strictly comparable.(c) Subject to revision. •• Nil or negligible. n.a., not available.Sources: Derived from figures published by Istituto Centra1e di Statistica in

Statistica Annua1e del Commercio con l'Estero and Statistica Mensi1edel Commercio con l'Estero.

I

~....

- 42 -

Woollen and Worsted Fabrics

It may be repeated here that Italy has emerged inrecent years as the leading supplier, in terms of weight, ofwoven wool cloth on world export markets. In terms of value,wool cloth exports from Italy almost trebled between 1954and 1963, to represent about a qu~rter of the total value ofwool cloth moving into world trade.

During the period under review, the quantity offabric exported annually has risen from the equivalent of23% of recorded production in 1954 to 62% in 1964~

Table No. 27 shows the volume and value of theexport trade in woven fabrics of wool and fine hair,together with the relative importance of certain major .markets, for the years 1954 to 1964. Changes in t?e tariffclassification in 1959 and a further elaboration in 1962render exact comparisons between earlier and later y~ars

difficult. For example, the statistics do not includespecific figures for blankets until 1959, and the basis fortheir inclusion was widened in 1962 iItaly has a largetrade in mixture blankets, in the bulk of which wo01 is notthe predominant fibre. The present tariff classificatioridivides wool fabric into two major categories: one forfabric containing more than 85% wool and the other forfabric containing less, but without specifying a lower limit.Each category contains numerous i-terns. The tariff itemsselected to produce the figures in the tabl~ are set out inthe Appendix. Pile fabrics and technical f~lts are ex­cluded.

The table nevertheless shows that the fall invo Lume which took pLa.ce in, 1963 and 1964 wasi.11 fact co mpa r-«atively minor. In termso£value" exports of wool fa-briGsreached a record height in 1964. Apart fromth~s one year,the average value per Ib~ varied little thrqughout theperiod.

Italyi s fa~ricexports, which a~e s~ld in almostevery country in the ~orl~,consist chiefljof those wovenon the woolleri system; in 1963, for example,these repre,:""sented 92% of the total 'quantity and 76% of the value. WestGermany again is consiste;1J.tlythe most important market,taking on the average abo&t 30% of the· total, f'ollowed ata considerable distance by the U.K. and then by France and

Table No. 27

I1'ALY : EXPORTS OF PURE AND MIXED WOVEN FABRIC OFWOOL AND FINE HAIR

1954 to 1964

Total Exports Selected DestinationsYear UnitedVolume Value West Germany U.S.A. Kinadom France

m~lb~'000 m.lb. % m.lb. % m.lb. % m.lb. %m.lire

1954 41.0 34.4 13.6 33.1 0.8 2.0 6.2 15.2 .·1.0 2.41955 61.0 44.4 18.8 30.9 1.4 2.3 15.2 24.9 2.6 4.21956 74.7 55.6 22.0 29.4 1.7 2.3 15.5 20.7 6.6 8.81957 88,.4 68.3 26.4 29.9 1.9 2.2 17.7 20.0 7.2 8.11958 74.6 57.5 23.3 31. 2 5.2 7.0 13.5 18.1 3.0 4.11959 81.4 64.8 27.3 33.6 10.4 12.8 10.7 13.2 3.2 4.01960 94.1 77.2 29.7 31. 6 12.2 13.0 11.6 12.3 4.2 4.51961 100.4 . 82.7 33.5 33.4 6.3 6.3 17.9 17.9 ·5.9 5.81962(a) 112.2 90.1 31.9 28.4 . 15.9 14.2 17.3 15.4 6.2 5.51963(a) 106.2 88.2 30.4 28.7 9.0 8.4 16.7 15.7 9.0 8.51964(a) 105.3 94.1 32.8 31.1 5.0 4.7 16.1 15.2 9.9 9.4

(a) Subject to revision.

Sources: For the years up to and including 1961, Statistica Annuale delCommercio con l'Estero; for the remainder (the statisticalannuals not being available) Laniera and Statistica Mensiledel Commercio con l'Estero. For tariff items used for quantitiessee Appendix on page 63,0

I

~w

------- --------------- --- --- ------------

- 44 -

the U.S.A. West Germany is also the chief destination formost of the individual types of cloth, though the U.K. isby far the best customer for the very light worsteds whichaccount for about 10% of the value of all wool cloth exports.

Italy has been able, in the period under review,to wrest a large share of the U.S. market from well-establishedcompetitors; by 1962 Italy's share of the U.S. market for im­ported wool fabrics was 33%, in comparison with 21% for Japanand 17% for the U.K.; four years previously it had contributedonly 14% of the total. ( 12)

This export trade has been enhanced in recent yearsby the exploitation of loopholes in the U.S. tariff. Thus in1962 Italy began to send very cheap wool fabrics to the Vir­gin Islands for showerproofing and re-export to continentalU.S.A. Because the declared value of the fabric on arrivalin the Islands was less than 50% of the value of the finishedproduct, goods which otherwise would have attracted a dutyof 38% were able to enter the U.S. market at a nominal tariff.Nearly 5m lb. weight of Italian wool cloth found its way totheU.S.A. by this· route in 1962, Agairi, in 1964 the Italianstook unexpected advantage of a clause in the U.S.tariffpro­viding a lower rate of duty on cloth of chief value v~getable

fibre by incorporating a small amount of expensive ramie inpredominantly wool cloths.

Separate figures for woollen and worsted clothexports have been available only since 1961. r~~ figuresfor total worsted cloth exports in 1962, 1963 and 1964 were,successively, 11.7m lb., 8.2m lb. and 7.6m lb. It thusappears that the export markets for worsted cloth havesuffered more than those for woollen cloth from the con­traction in trade evident in 1963 and1964~

The most significant single item of export, interms of both weight and value, is woollen fab~ic weighingmore than 450g.. per square meter (approximately 13 oz. persquare yard) and containing more than 85% wool and fine hair,This accounted in 1964 for about 23% of the total by weightand for more than 20% by value. .

(12) Problems· of the Domestic Wool Textile Industa. ThirdSupplementary Report.'Of the Committee on COmmerce madeby its Spe c i.aL. Sub-Committee to study' tp.e texti le ind­ustry, together with supplemental views. Washington,U. S. Government Printing Office, 1963.

- 45 -

Imports, which consist chiefly of high qualityfabrics, have risen sharply since 1959, falling off a littlein 1964. The most important item is medium-weight woollencloth, and the chief supplier is the U.K. Cloths of specialqualities are also imported from various European sources.The trend is shown in Table No. 28 in which the data aresubject to the same qualifications as apply in Table No. 27.

Related Wool Products

The picture of Italy's export trade in wool pro­ducts would be incomplete without a consideration of therapidly expanding trade in knitted goods and hosiery, themanufacture of which, as we have seen, absorbs a high pro­portion ~f the worsted yarn produced by the wool textileindustry. No figures of production of wool knitted goodsare published, but from the statistics of production ofyarn for knittmg given in Table No. 29 it seems reasonableto conclude that something like one-third of output inrecent years has been sold abroad.

A slight fall from the record ~xport level of28m lb. achi~ved in th~ previous year took place in 1964.The decline in exports of knitted goods was proportionallygreater than that w~ich took place in woven wool fabrics.Value per pound, after a steady downward trend to 1962,thereafter began an upward movement. While the knittedgoods exports in terms of wei6ht were not much more thanone-quarter the size of the export trade in woven woolfabrics, their total value in 1963 was higher and in thefuture it seems lik~ly that more and more resources willbe devoted to the expansion of the trade, perhaps at theexpense of woven £abrics. The U.S.A. is by far the mostimportant destination, .taki.ng almost ha,lfthe shipments in1964, and it is notable that this market greatly increasedits knitwear purchases in 1963 and 19640at the same tim~that its imports of wove~ wool fabric from Italy werediminished. The Italian .flair for style and fashionleadership have played a decisive role in the developmentof the trade in knitted goods.

Very small quantities of knitted goods are im­ported by Italy, chiefiy from other European countriesand Hong Kong.•

Table No.• 28

ITALY : IMPORTS OF PURE AND MIXED WOVEN FABR~C OF WOOL AND ,FINE HAIR

1954 to 1964

, .. ";:'"

Tot&1·Impo:t'ts Selected Sources of Supply"Year

Vo·lume Value Unit:ed Kingdom France West (ierm.any Switzerland

m.lb. .; ·"m.lir.,e . . '000 lb. % '000 lb. ~ '000 lb. % '000 lb. %

1954 2.9' . 5,681 1,367 68.7 . 261 13.1 . 35 1.8 185 9.31'95:5 ·1~9 ', .. 5,286 1,228 63.7 304 15.8 43 2.2 207 10.71956 20'0' '5,440 1,301 64.9 360 17.9 41 2.0 162 8.11957 ; "2.1 .. , 5,,891. 1,380 66.2 '355 17.0 64 3.1. 156 7.51958 1.9. 5,174 .1,231 65.3 3:05 16.2 72' 3.8 112 5.91959 "

2.2 5,518 1,354 61.4 389 17.6 88 '4.0 187 8.5'1960 3.2. 7,753. 2,123 66.2 536 i6.7 . 108 ,3.4' 152 .,4 •.7196i 3.7 . 8 t849 2,126 57.5 672 18.2 154 4.2 162 4.419.62(110) 5.7 9.,413 2,345 .41.0 1,410 24.7 673 11.8 ' 405 7.1'i963~a~ 5.1 . '11,934 :3,201 62.4 971 '18.9 292 5.7 205 4.01964 a .. 4.7 12,548: . . '2,750. 58.2 .933 19.8 nv a , n,.a. no&. n.&o

,:' 'H' ~. : . ..:......

'{a} SUbject to 'revfsiorf. ·.'These figures, ca.Lcu'la'ted from those given in Laniera, do not tally withcalculation,s made' f·roin the summary. table in StatisticaMensile ud Cqmmercio con 1 'Estero,December 1962, 1963.and 1964; the la.tter in~lU:de 'somefelts.,floorcoverings.etc.n.a.;.not' !'Lvailable~;; •....

Sources": .·DeTived,f·i'omfi,gures published by' Istituto Centrale .ui Statistica in Statisiic~. Annual.e· -deL CommerciQ C<lfi. 1 "EsteTo . and Statistica MensiledetCommercio CQn.. :1 ':Ester.o f·LaIiTera.

I

.j>.0-

B

l1.i

Table No. 29ITALY : EXPORTS OF WOOL KNITTED GOODS AND HOSIERY

1954 to 1964

Total Exports Selected DestinationsYear

Volume Value U.S.A. Vest Germany France United Kingdom

'000 lb. '000 '000 lb•. " '000 lb. % '000 lb. " "000 lb. "m.1ire1954 613 3.2 138 22.5 62 10.0 3 0.5 30 4.81955 1,121 5.5 235 21.0 152 13.5 13 1.2 56 5.01956 1,782 7.8 351 19.7 278 15.6 36 2.0 154 8.71957 2,749 11.1 426 15.5 693 25.2 24 0.9 230 8.41958 3,885 14.8 605 15.6 1,447 37.2 62 1.6 . 368 9.51959 7,579 26.9 1,072 14.2 2,739 36.1 650 8.6 619 8.21960 11,819 40.4 2,904 24.6 3,251 27.5 863 7.3 1,108 9.41961 15,333 48.5 3,945 25.7 3,883 25.3 1,290 8.4 1,756 11.5

1962t~ 20,930 67.2 6,183 29.6 5,053 24.1 2,157 10.3 2,035 9.71963 a 27,776 92.6 11,435 41. 2 5,283 19.0 2,874 10.4 1,223 4.41964 a 26,303 92.7 12,439 47.3 4,295 16.3 2,563 9.7 707 2.7

(a) SUbject to revision.

Sources I Derived from figures published by Istituto Centra1e di Statistica in Statistica Annua1edel Commerciocon l'Estero and Statistica Mensi1e del Commercio con l'Estero.

I

~......

- 48 -

Some mention must also be made of the trade in"sewn wool goods"(13) which includes made-up clothing.Changes in the composition of this broad category duringrecent years make it very difficult to discuss trendsa total of 19m lb. was exported in 1963, and in 196422.2m lb.

Exports of Wool· Products and the'Balanc~ of Trad.e

Table No. 30 shows how in recent years the wool tex­tile industry has made a positive and increasing contributionto Italy's oversea earnings despite a worsening trade balancefor the countr;y as a whole.. Though not specifically mentionedin footnote (c), it seems clear that knitwear and hosiery havebeen included.

Tariffs

The modern Italian wool textile industry receivedits chief impetus to expansion from the reintroduction oftrade liberalization policies by the U.K. and West Germanyin March 1953 'and by Fran6e in April 1954, followed by theestablishment of the Europea:nEconomic Community on1 January 1958. A succession of 10% cuts reduced theinternal tariffs of EEC countries on industrial goods to40% of their base rate by 1 July 1963, and it is expectedthat they will have been removed completely by 1 January1967.

Italy levies no customs duties on wool and finehair from whatever source. Duties on imports of woollenand worsted yarn (other than hand knitting yarn, on whichthe duty is slightly higher) are 4.4% ad valorem for EECcountries, and vary from 7.2% to 10% for countries outsidethe Common Market. Woven wool fabrics imported from EECcountries attract a duty of at most 7.2%; those fromother countries at most 14.8%(14). .

(13)

(14)

"Oggetti cuc i tidi Lana ",

Commonw~alth Economic Committee,World Trade in Woolarid Wool Textiles 1952-63, London, H.M.S.O., 1965,p.193. . ..

- 49 -

Table No. 30ITALY TRADE BAL~CE AND THE WOOL TEXTILE INDUSTRY

1956 to f963

Wool Sector

, m, lire m. ~ ire

Imports

Year

'19561957195819591960196119621963

TotalItalian

Trade

'in.lirEf

1,984,0482,296,0062,009,848,2,105,3392,953,2023,264,5213,791,8344,711,994

RawMl:l-terials , (a)

97,466144,076101,507,112,949133,656121,691144,809159,620

13,02219,17011,074.12,84412,95211,32711,30012,583

WoolManufa.ct­ures cm.lire '

10,055,10,984

,9,94510,88915,18917,561

, 19,35825;820

Total

m.lire

120,543174,230122,526136,682161,797150,579175,467198,023

195619571958195919601961'19621963

1,340,9001,595,1361,610,6671,820,5212,280,2432,614,3342,915,5723,154, H7

Exports3,765,4,2842,0124,5163,9124,3234,7386,363

778582352503318 '352'443

1,191

89,172107,788

98,418126,203160,853

"175,976, 202,768,'232,760

93,715112,654100,782131,222165,083180,651207,949240,314

Balance

19561957195819591960196119621963

643,148700,870399,181284,818

, 672,959650,187876,262

':'1,557,877

- 93,701-139,792- 99,495-108,433~129,744';'117 ;368-140,071-153,257

~12,244

-18,588-10,722-12~341

-12,634-10,975-10,857-11,392

+79,117+96,804+ 88,473+115,314+145,664+158,415+183,410+206,940,

- 26,828- 61,576- 21,744

5,460+ 3,286+ 30,072t' 32,482+ 42,291

(~) GrelLsy, scoure:a, '~yed, and tJnted wool,' fille and coarse hair, waste, mungoand shoddy~·c.arded.'woor'~nd tops. (b)' W6o1and,o,ixed rags., (c) Yarn, wovenfabric ,pile fabr'ic, woc;>tblarikets, part of .blanketsofoth~r textile ma.terial pmade-up wool goods, 'felts, 'and wool carpets. ,',' ' '

Sources: Laniera, Abno76:jN.6, ,June 1962, p.7?3iAnno 78, N. 6, June 1964,p~662"~ ,:."" v-. '.

- 50 -

In the important West German market, Italianwoollen and worsted yarn is dutiable at 2.4% ad valoremand woven wool fabric at most 7.6%. This gives the Italianexporter a considerable advantage over competitors such asthe Japanese who pay customs duties ranging from 12% to 17%on their cloth entering the West German market.

The chief tariff obstacle to the Italian exporttrade in wool products is the U.S. tariff. Before 1957,the duty on wool cloth was 37t cents per lb. plus 25% advalorem, but from 1957 to the end of 1960 these duties wereapplied only to imports upJto an amount equal to 5% of U.S.production. Above this, imports paid 45% ad valorem inaddition to 37t cents per lb. On 1 January 1961 a furtherchange was made: all imports valued at more than $US2 perlb. paid a duty of 38% ad valorem plus 37t cents per lb.while fabrics of lower value than $US2 per lb. paid an advalorem rate between 38% and 60% plus the 37t cents per lb.The effect of this innovation, which bore heavily on the .typical low-quality woollen cloths exported by Italy, was tocause an immediate, if temporary, fall in Italian exports tothe U.S.A. On 17 June 196;2 the U.S. duty on certain typesof carpet was increase.d fJ;'om 21% to 40%.

t·

- 51 -

V PRICE TRENDS

Raw Materials

According to official Italian index numbers, rawwool prices throughout the period were generally below theirbase year, 1953. After five years of comparative stability atsome 35 points below the 1953 level, monthly average prices ofmerino wool ro s.e by .abouf 10 points in 1963. The index for crossbrewool prices was maintained at a higher level than for merinowool (see Table No. 31).

Table No. 31. . . .. .

MONTHLY AVERAGE PRICES OF MERINO AND CROSSBRED WOOLS:

INDEX NUMBERS: 1954 to 1964

(Base: Monthly average 1953 = 100)

MonthlyAverage

19541955

1956

1957

1958

1959

1960

1961

1962

1963

1964

Merino

89.7

74.9

79.0

86.7

60.9

62.7

61.9

61.8

64.1

74~2

73.4

Crossbred

96.6

88.8

90.5

98.5

72.7

75.8

76.1

71.7

71.7

79.580.1

Sources: Laniera, Anno 78, N.6, June 1964 and Artno 79, N.3Ma+ch 1965; Istituto Centrale di Statistica,Bolletino Mensile dt Statistica, Anno 40, N.5,April 1965, and Annuario di Statistica industriali,1960 and1962.·

- 52 -

Prices of artificial and synthetic fibre declinedat a slower rate than woo~ prices in most years. Table No.32 shows the trends in wool and man-made fibre prices.

Table No. 32

MONTHLY AVERAGE WOOL PRICES AND PRICES OF MAN-MADEFIBRE INDEX NUMBERS : 1954 to 1964

(Base : Monthly average 1953 = 100)

Wool Artific-Monthly ialandAverage Aust- New South South Average Synthet-

ralia Zealand Africa America ic Fibre

1954 90.5 97.7 87.2 101.1 91. 6 99.01955 76.0 94.0 72.5 99.6 78.8 94.71956 79.7 92.8 77.1 98.7 82.2 ·89.61957 87.4 103.3 86.1 101.0 90.0 85.61958 61. 6 73.7 59.1 79.1 64.3 85.21959 63.8 81. 7 60.6 80.9 66.4 83.51960 62.8 84~8 60.3 80.1 65.8 84.21961 63.0 82.8 59.3 72.2 64.5 83.31962 64.9 80.8 62.3 71. 3 66.3 84.91963 75.3 94.4 72.3 70.7 75.6 88.21964 74.6 97.6 72.4 71. 5 75.2 91.8

Sources Laniera, Anno 78, N.6, June 1964 and Anno 79,N.,3, March 1965; Istituto Centrale di Statis­tica, Bolletino Mensile di Statistica, Anno 40,N.4, April 1965; and Annuario di StatisticaIndustriali, 1960 and 1962.

No index of the prices of rags or of re-used woolis published, nor is it possible to ascertain the averageyield of spinnable wool fibre obtainable from a given quan­tity of rags. It is known, however, that in recent yearsthe price of ra~s has not been more than about 10c (Aust­ralian currency) per lb., while the unit value f.o.b. ofall greasy wool, regardless of quality, exported to Italyfrom Australia has ranged from 46.1coto 77.lc per lb. '

· . ~ 53 -

A study of comparativ~ ptodtiction costs in 1960 for lower­grade flannel fabric showed that the U.S. cost per linearyard was $USl4>91 and the -Lt a.Li.an cost $USO" 77, and it wasconcluded that the Italian advantage was primarily due tolower raw material costs~(15).

As well as the cost advantage, there are alsotechnical advantages, under Italian conditions, in usingrecovered wool on a large scale" Some of the processes,e~g"dyeingg which .a re essential in the manufacture ofcloth from virgin wool are made redundant by the particularskills (e .. g.;, the matching of colours) of the labour force"Prat.o , as well as being· the hub of the woollen textileindustry, is also the centre of the international trade inrags.

Labour

Nominal wage rates in Italy are determined bycollective contracts which are negotiated from time to timefor particularsectorsi and by the cost of living indexwhich brings. about $: automatic adjustment eacliquarter.Wages; however, rept-eseil:t Je'ss than 70% of the. cost oflabour in the wo'olt;extile industry, the remainder consistsof social security contri,!:?titions paid (until 1964) entirelyby the employer.. This is, in effect, a payroll tax.

As Tahle No o 33 shows, the average cost of livingindex (base 1938 ~ 1)' rose only slightly e~ch year until1961. Thereafter, .the upward trend gained momentum, andbetween 1962 and 1963 there was an increase of about 9%0The publication of a new index (base 1961 ~ 100) beganearly in 1964" though minimum wage rates continued to belinked to the old ihd:'e?t .. (16) . The value of· the new indexwas 108 05 in,Januaryrt)'63fl1S,,6 in December 1963 and122.8 in December 1964. .

(15) U6S .. Department of' Commerce, Busine ss and DefenceSe rvLcs s Administration; ,Comparative Fabric Producti,on Costsin the Unitjed states.. and ,Four Other Cogntries; Washington,U.. S .. GovernulEini!. Pripeting -Office, 1961.;

(16) Org~isatien fOi'.:E~6nomic Co-o:peration and Development,I.taly" (Econom:h~~· Sut~Ery~:,hy the OEeD}, Paris, June 1964 , p.:20_

.~..-

Table No. 33COSTOP LIVING AND WORKERS f WAGES : INDEX NUMBERS

(Base : 1938 = 1)1954 to 1964

" " Genera;lCost Gross Minimum Contractual Wages Gross ,Minimum Contractuallear,' ,of Living in ,'Indus trY Waaes in Textile Industrv,.' (averagEl,of' TncL, Family Exc1, Family Inc!. ,l"amily ", EXc1. Family" month1v 'index) Allowances 'Allowances Allowances Allowances

.," 1954 ' 58.06 77.77 66.53 83'.40 80.79195~5 " 59.69 80.92 69.70 85.83 83.881956 ' 62.66

..85.26 73.77 89.31 87.261957 63.87 88.36 77.11 91. 55 89.83, '1958 ,66.93 93.08 81.10 95.69 93.59. 1959 66.65 ,94.57 82.10 96.60 94.261·960 68.42 ,97.52 85.95 98.57 98.931961 10.42 '101.24 89.54 101.84 103.15, '1962 .. ' '74.52 10.9.50 99.62 111.28 117.36:.,:963 81;07 121 ..23 113.88 122~11 130.591964 ..'~ n.a. ' 138~86 ( 133.73 130.64 142.22,;. ' ..

", ,

VI4lo.

I

Sourc.es istittito Centra1e diS,tatistica, Bolletino Mensiledi Statistica 'and Annuario StatisticoItaliano. '

:.,

53 -

A study of comparative production costs in 1960 for lower­grade flannel fabric showed that the UoS" cost per linearyard was $US1<l91 and the ,Italian cost $USO" 77, and it wasconcluded that the Italian advantage was primarily due tolower raw material costs.(15).

As well as the cost advantage, there are alsotechnical advantages, under Italian conditions, in usingrecovered wool on a large scale" Some of the processes9e.g~ 4yeing 9 which are essential in the ,manUfacture ofcloth from virgin wool are made redundant by the particularskills (e"g .. , the matching of colours) of the labour force"Prato t as well as being,~he hub of the woollen textileindustry, is also the centre of the international trade inrags.

Laboux

Nominal wage rates in Italy are determined bycollective contracts which are negotiated from time to timefor particular sectors,and bythe,cost of living indexwhich brings abotltana-qtomatic adjustment eaehquarteroWages, however, rep,i:~s~~:£:.t~ss than 70% of the cost oflabour in the we)dl t'ext'i,le industry; the remainder consists

,of social security contributions paid (until 1964) entirelyby the employer~ This is, in effect, a payroll tax"

As Table No o 33 shows, the average cost of livingindex (base 1938 == t)' rose only slightly each year until1961. Thereafter, ,the upward trend gained momentum, andbetween 1962 and 1963 there was an increase of about 9%"The publication of a new index (base 1961 ~ 100) beganearly in 1964, though minimum wage rates continued to belinked to the old 'iJi(h~-'t~(j6) ,The value of the new indexwas 108,,5 inJ'anuar;->(:'t963" 115,,6 in December 1963 and122.8 in December 19'64-.,

(15) U~So Departmefitotd~mmerce. Business and DefenceServices Admiri:istration,Coml?arative Fabric Prod.ucti,on Costsin the United states, aria Four Other Countries', Washington,U.. So Governmeni;. Pripit:L~gOffice, 19"61,;

(16) Org~is'ation for Eciol;lOmic' Co-co pe r-a.td on and Development,Italy~ (Economic- S,tirv~~s:.b~~ the OEeD), Paris, .June 1964, p.20.

'., .'1·, ,

r I.

Table No. 33

COST'OF LlVING AND WORKERS' WAGES : INDEX NUMBERS: 1954 to 1964

(Base : 1938 = 1)

Genera·l ..Cost Gross Minimum Contractual Wages Gross Minimum ContractualYear .. . of Living in 'Industrv 'Wages in Textile IndustrY.

,. .' (averag~o'f Tne L, Family Exc 1. Family Incl. Family ·Exc1. Family.. monthlv index) . Ailowances ~Allowances Allowances Allowances

"1954 . 58.06 77.77 66.53 83.40 80.791955 .. 59.69 . c' 80.92 69.70 85.83 83.881956,. 62.66 85.26 73.77 89.31 87.2-61957 63.87 88.36 77.11 . 91. 55 89.831958 .66.93 93.08 81.10 95'.69 93.591959 66.65 .94.57 82.10 96.60 94.261'960 68.42 .97.52 85.95 98.51 98.931961 10.42 101.24 89.54 101.84 103.15

. '196.2 ..' 74.52 10.9.50 99.62 111.28 117.36:1963 81;07 121.-23 113.88 122~11 130.591964,' ..... 'D."a•. ,138.86 ( 133.73. 130.64 142.22

.;. . ".

VI

""'I

SOU'l'c.es 'Istittito CentralediS,tati-stica, Bo1htino Mensile di StatistieaandAnnuario StatiSticoItaUfI,no., '

57 -

Taxation

Taxation provisions relevant to the wool textileindustry may be mentioned briefly at this point. There is amanufacturing tax on yarn, and the "imposta generale sull'entrata", known as the LG.E., a turnover tax, is leviedeach time a product changes ownership. Theoretically thisappears to favour vertical organization of the industry,but for the small craftsman it is replaced by the "impostain abonnamento", which is based on the previous year's sales.Refunds of taxes are made at various rates to exporters ofmanufactured and semi-manufactured wool products. In 1964,an increase in the I.G.E. meant that textile raw materialswere subject to a rate of 7.2% instead of 6% from 31 August;on the other hand, the rebate on exports of wool yarn andfinished products were increased to 6% from 5%.

A unified sales tax on an added value basis to beintroduced on 1 January 1967 in the countries of the EECwill necessitate radical changes in the Italian system oftaxation.

Yool Products

Table No. 35 on page 58, compares movements in theindex numbers of average prices for certain wool products (pre­sumably imported as well as locally made) sold in Italy from1954 to 1964 with the index numbers for average unit valuesof Italia~:,..:wool pr-educ t.s sold a;bt.oa~ . The export index isan index of unit value rather than price. The index ofprices oU;t.'the home market has been rising rapidly since 1962;prices for women's fabrics in particular increased by about25% between 1961 and early 1964. On the export market t therise in the index of unit value be.gan earlie r (in 1959 J andwas much steeper, but it should be noted that knitted goodshave been included and that exports of these began to riserapidly in 1959. The high unit value of knitted goods soLdon export markets has already been noted.

r---------------- - ----------

. - 58 ­

Table No. 3'5

MONTHLY AvERAGE PRICES OF WOOL PRODUCTS:

INDEX NUMBERS: 1954 to 1964

(Base: Monthly average 1953 = 100)

On the Italian Market Exports of la)Monthly . Wool ProductsAverage

Woven Cloth Woven Cloth. GeneralYarn: for Women for Men Index Unit Value

1954 98.5 100.5 tOO.8 100.3 90.21955 90.5 . 97.1 96.1 95~6 81. 21956 88.0 94.6 93.0 92.8 83.81957 98.4 105~4 99.0 101.2 87.7·1958 86.0 97.4 96.2 95.1 86.31959 81.4 96.0 91.2 91.4 104.81960 85.5 10008 95.8 96,0 121 .61961 83.9 99.6 92.5 93.7 124.91962 88.0 107.9 98.6 100.3 138.11963 93.8 117.0 105.1 107.6 (b)1964 98.6 127.6 111'.3 ll5.1 (b)

(a) Includes yarn and' fabric o~ wool and fine hair (pure andmixed), blankets, carpets, felts, knitted goods and other .manufactures and made-up goods of wool and fine hair (pureand mixed). (b) In issues of Laniera up to March 1965, thevalue of this index for 19~3 is given as 147.7. In theApril 1965 issue it is, however, given as 109.6 for 1963and 114.8 for 1964. There is no indication that the basewas changed.

Sources: Laniera. Anno 78, N.. 6, June 1964, Anno 79, N', , 4,April 1965.

- 59 ­

VIP~OSPE.CT.S£OR. ",o.O,L :.tN~.TBE ITALIAN ECONOMY

In the first eight years of the period coveredby this study, the Italian economy recorded a high rate ofgrowth, with gross national product advancing at anaverage rate of more than 6% a year.(20) Associated withthis growth was the stability of nominal wage rates; theshare of wages in the gross national product remainedsteady at 42-43%. But the wage rises which began in 1962disrupted the pattern. These rises, together with thegradual emergence of a prosperous middle class as a resultof the commercial success of the preceding years was begin­ning to contribute to an upsurge of demand for consumergoods 1 in particular foodstuffs and electrical equipment.Coming at a time when trade barriers were being'dismantled,the increase in spending power led to an unprecedented .volume of imports;~the impetus given to consumption hadtemporarily outrun capacity to increase production at home o

In 1963 a marked disequilibrium appeared in the balance ofpayments. The years 1963 and 1964 were troubled not onlyby economic and financial crises but also by uncertaintiesengendered by political instability.

At the beginning.of 1964 investment was·stagnant, industry disrupted by strikes and wage demands',unemployment was rising and competition on externalmarkets had become acute. Lack of confidence in the lirahad led to large-scale illegal capital exports. The costof living index continued to rise, while the index of in­dustrial production was almost stationary. The indexesfor wool fabric and knitted goods production were bothfalling. '

International credits from the U.S.A. andEuropean central banks in March 1964 enabled the Govern­ment to meet the deficit in the balance of payments andto avoid devaluation of the lira. Internal measures wereaimed at damping down domestic demand for imports andstimulating exports, e.g. by expediting export financing

(20) In 1961 the increase was 7.1%; in 1962 it was 8%.

- 60 -and lowering export insurance premiums. Employers wererelieved of part of the responsibility for social securitypayments, thus reducing the cost of labour.

It was fortunate that demand in export marketsat this time, particularly in other coun~ries of the EEC,was buoyant, so that the exporters were able to increaseexports ,by 20%. To some extent this was achieved by thedisposal of stocks for which there was no longer a marketat home. By the end of 1964 there was a surplus in thebalance of payments instead of the previous year'sspectacular deficit. Lower imports of food and rawmaterials contributed to the final result.

Further emergency measures centring around theraising of 250 milliard lire in loans to finance publicpublic works, roads and agricultural development came intoforce by decree-law early in 1965. Other measures designedto stimulate development are the establishment of a fundto provide finance for small and medium-size industry,and the assumption by the Government of a fur~her shareof social security payments.

In January 1965 a fi ve-sye a.r economic develop­ment programme was approved by the Government. Thisenvisages an increase in the national income of at least5% per annum but (at the time of writing) the means bywll1ch this was to be achieved had not been defined.

By April 1965 there were reports. of a return ofconfidence in the Government on t~e part of industry andthe capital markets were showing signs of a revival. Butthe e~fect of steeply rising incomes on the pattern ofconsumption has not yet been stabilized. There are anumber of important requirements for balanced developmentin the future, among them being the provision of adequatelong-term investment capital, an effective incomes policywhich wilL satisfy the claims of both the trade unionsand the industrialists, the maintenance of stable govern­ment and the prevention of disequilibrium in the balanceof payments. All these will be important to the wooltextile industry as to the economy in general. Stocksof some imported raw materials (though not perhaps ofwool) are reported to have been run down during 1964.A recovery in domestic demand will not only renew demandfor imports but also reduce incentiye to export.

- 61 -In attempting to forecast future trends in

textile activity in the context of the immediate diff­iculties besetting the Italian economy it is important tobear in mind that, while the bulk of Italian woollen clo~h

pr~duction is sold abroad, the bulk of the worsted clothand probably the greater part of the wool knitwear andhosiery, i.e. the more valuable products, are consumedwithin Italy. Since 1961 the prices received on the homemarket have shown a marked improvement, with the twofoldeffect of helping to push up the cost of living and ofmaking the home market more attractive to other suppliers.The UoKo, for example, found it worthwhile to launch anew sales campaign for w~ol textiles in Italy in 1964.The emergence of demand for ready-made clothing in Italyis likely to cause a further transfer of resources to thehome market - not only of fabrics but also of labour andbuilding materials needed for warehouses, clothingfactories, etc.

The general wage increases awarded in Italy inthe last two or three years, in so far as they ultimatelystrengthen local demand and do not lead to further un­employment, may be expected to provide a furtherincentive to the production and import of worsted clothand wool knitted goods.. Their influence on the woollensector, however, is likely to be less fortunate, stemmingfrom the fact that they have raised costs and have therebyhampered Italy's position in world markets. Exports areof vital concern to the economy but it is likely thatoutput of woollen fabric will fall further.

The Woolmark campaign, with its emphasis on purevirgin wool, is likely to benefit the producers of worstedfabric and to some extent knitwear, but it is more probablethat it, too, will militate against sales of Italian woollengoods on export markets. Italian worsted manufacturers' arereported to be aiming at a high level of exports to theU.S.A. in 1966.(21)

The continued popularity of knitted fabric isalso a good omen for the worsted sector, but it is in knitwearthat competition from man-made fibres, such as the acrylics,is likely to become more and more evident. It will be accen­tuated if the current wave of price reductions in man-madefibre in the UoK.. and the U.S.A. reaches Italian roducers.

21 Daily News Record Fairchild Publications 13 April1965, p.32"

- 62 -For Australia the recovery of the Italian econ­

omy is of importance from the point of view of the wooltrade. The full effect of the 1964 crisis on raw woolpurchases may not be seen until statistics for 1965 areavailable, but in the longer term there is no reason forpessimism. A D.S. study published in January 1964(22)forecast a rise in Italy's net imports of raw wool to139,000 metric tons (306.4m lb.) in 1965, 163,000 metrictons (359.4m lb.) in 1970 and 182,500 metric tons(402.3m lb.) in 1975. The internal events of 1964suggest that it is unlikely that 1965 will see therecovery in imports to a level approaching the 1962volume which the D.S. forecast implies. The rise ofmore than one-third envisaged by 1975 must also be re­garded as an optimistic one, but the resilience of theItalian wool textile industry and the growing importanceof the worsted sector are such that in the long term itmust certainly continue to be an important market forraw wool. The worsted sector, in spite of its greateruse of the more expensive imported raw wool(23) hasmanaged to withstand adverse changes in economic con­ditions at home and in the climate of trade abroad moresuccessfully that haS the woollen sector with its muchcheaper raw material costs. This appears to haveresulted not so much from increased demand for worstedcloth as from a rising requirement for worsted yarn tobe used in the knitted goods and hosiery industry.

(22) D.S.D.A., Regional Analysis Division, ItalianAgriculture: projections of sUEPly and demand in1965, 1970 and 1975, Washington, January 1964.

(23) The description "pure wool" was applicable to 67%of worsted ya~n and 27% of woollen yarn, 75% ofworsted cloth and 45% of woollen cloth produced in1964, according to official Italian statistics.

piu di g. 450 (2439)piu di 250 g. finO a

- 63 "­APPENDIX

TARIFF ITEMS USED iN CALCULATING VOLUME OF EXPORTS

1954. 1955, 1956, 1957. 1958

Cap. LIII: Tessuti di lana 0 di peli fin-i, puri eass~milati

omistidi lana.e peli fini

- stampati (2438)altri, pesanti pera1tri, pesanti perg.450(2440t 2

- altri, pes~nti per M: g.250 0 meno (2441)

~:~:~~~t;s;,~l:~ (2~~'2yelifini, misti con a1tre

1959. 1960. 1961.

53.11: Tessuti di lana 0 di peli fini

- per cbperte '{2969)- per altI':L; usi , ' puri ; s t ampa't i, (2970)~ per a1 t;ri',~'s~,puri, altri,' pese-nii per metro

, quadrato:,,- piudi 450 gratIlIlli ,( 2971) ,- pe r altri tisi, pu r i , a I tri, pe santi per metro

quadrato: piu di 250 fino a 450 grammi(2972)- per altri usi, puri, altri, pesanti per metro

quadrato 250 grammi·o merio (2973)- per altri usi, misti Con altre m~terie tessili:

conteneritiseta 0 borra di seta '(schappe) inmisura superiore a 6 ma non superi~re a 10 percento (2974)

- per altri usi, misti con altre materie tessili:altri (2975) ,

i ',." J

e1i fini~'cont~nti almenomat~rie,' tess~i'l .

- p~r cope~t~ (01) ,- tessuti detti ,"loden" (02, 10)- contenentiseta 0 borra di seta (schapp~) in

misura super~ore a 6 ,mario~ superiore a 10%cardat'i (03)

cardati, pesanti per mq. piu di 250 gr.a 450 g r , (21)- cardati, pesanti per mq. 250 gr. a menD

6:4 -

- contenenti .seta 0 borra di seta (schappe) inmisura superiore a 6 ma non superiore a 10%- pettinati (04)

a1tri, cardati: pesanti per mq. piu di 450 gr.(05)

a1tri, ~ardati: pesanti per mq. piu di 250 gr.fina a 450 (06)

- a1tri, cardati: pesanti per mq~ 250 gr. 0 menD(07)

a1tri, pettinati: pesanti per mq. piu di 450 gr.(08)

a1tri, pettinati: pesanti per mq. piu di 250 gr.finD a 450 gr. (09)

- pettlnati, pasanti per mq. 250 gr. 0 menD (12)

Tessutidilana 0 dipe1ifini contenentimenodell "85% inpesQ di gtleste materie tessi1i

- per coperte (15)- a1 tri, c ont.e nent I seta 0 b or ra di seta (scMtppe)

in misura superiore a 6 roa non superipre a 10%- cardati {16) .

- aLb r i , . e on bene n.t i seta 0, b or a di seta (schappe) .in misura superiore a 6 ma non superiore a, 10% .- pettinati (19) .

a1tri cardati; pasanti per mq. piu ~i 450 gr.(20)

a1trifino

- a1tri(22)

a1tri pettinati, pesanti per mq. piu di 450g r , (23)

- a1tri - pettinati, pesanti per mq. 250 gr. finaa 450 gr. (24)

- altri - pettinati, pesariti per mq~ 250 gr~ a meno(27)

- 65 -

AUSTRALIAN DECIMAL CURRENCY $/ CENT (c)

SYSTEM

On 14 February 1966, under the Currency Act1963, a dOllar/cent decimal currency system, with onedollar equal to 100 cents, was iIitrodtic'edin ··Au.stralia.The relationship between pounds, shillings and pence, anddollars and cents, as vpre ac r-i.bed in Section 8 of the Actis as follows:

1 pound

1 penny

2 dollars; 1 shilling = 10 cents;

five-sixths of a cent.

In this report monetary amounts have been con­verted to the equivalent amounts in the new system.