WOOL PROSPECTS

Ashburton Guardian, Volume 55, Issue 269, 27 August 1935, Page 8

WOOL PROSPECTS

FAVOURABLE POSITION. DANGER OF HIGH PRICES. Discussing the outlook for wool during the coming season, the Sydney “Morning Herald” states that, due partially to the decreased supplies of merino which will he shorn, and also to the largo consumption encouraged by the low prices of last season, pros pects for favourable values are very promising. The hope is expressed that the trade abroad will not develop the “fever” in regard to supplies which in some years has produced more or less boom prices. The latter have eventually proved disastrous by curtailing the use of the staple owing to the selling figures for woollen goods becoming too high for public purchasing power-. Welcome though high returns would be to the growers who received them, the risk of a break in the market during the course of the selling year would be great. From the broad aspect of the welfare of the sheep industry, the benefit of a period of extreme rates is questionable. The financial troubles which have beset many landholders are due to the injudicious purchases of land at excessive prices when wool, values were high. In addition, rates for sheep follow the wool market if feed conditions are satisfactory. Wljen the inevitable setback comes, those who have bought find themselves with, over-costly stock, which prove unprofitable lor woolgrowing, and which can be sold only at

a, heavy loss. _ The pei-son who suggested legislation preventing the sale of wool beyond a certain figure won Id probably be regarded as demented but his idea would show a better uegtard for the future than the proposals often made in depressed times to fix the price of the staple and to hold up its sale in an effort to do so. The latter scheme gives no consideration to the fact that accumulating stocks upset buyers confidence and 1 must prevent pnees from recovering, irrespective of who holds them. The results of the schemes of the Canadian raid United States Governments with respect to wheat offer convincing evidence of the futility ot that action. While an appreciable improvement on the average obtained last season is desirable ancl probable, an extreme level of prices is not warranted by present world circumstances, and would be likely to produce eventual ill results.