OUTLOOK FOR WOOL.

Ashburton Guardian, Volume 58, Issue 36, 22 November 1937, Page 8

OUTLOOK FOR WOOL.

THE LOWER PRICES IN LONDON. EFFECT ON DOMINION SALES. (Special to the “ Guardian.”) CHRISTCHURCH, November 20. High prices for wool last season provided New Zealand with an example of how prosperity is bound up with markets overseas. Last season’s wool cheque amounted to just over £15,000,000 on an average price of between 15d and 16d per lb. Roughly speaking, this means that every Id rise means a gross i etui n °f about £1,000,000. In view of this position, the reduction of 5d a lb experienced at the opening of the London wool sales would mean a reduction in New r Zealand s income of about £5,000,000 if the reduced price pertained throughout the wool-selling season. Fortunately, there is no guarantee that such will be the case, although wool interests are definitely convinced that prices will be below last season’s rates. Uncertainty exists as to the effect on the market arising from Japan’s activities in the East. In some quarters it is feared that the limitation of credits for Japanese wool purchases, on account of war commitments, will seriously affect the coming season’s sales.

One man with considerable experience of the wool market, however, does

not consider that Japanpurchases will affect the market price to any great degree. He argues that any reduction in Japanese purchases will only affect the quantity of' manufactured goods which Japan will have available for export. The markets, which, in normal conditions, would receive these goods will be compelled to buy their supplies elsewhere. This in turn will mean that Britain and other textilemanufacturing countries will take increased supplies of raw materials.