FALL IN PRICE

Ashburton Guardian, Volume 58, Issue 42, 29 November 1937, Page 7

FALL IN PRICE

THE AUCKLAND WOOL SALE. NO JAPANESE COMPETITION. (Per Press Association.) 1 AUCKLAND, November 28. A substantial decline in prices occurred at the first New Zealand wool sale of the 1937-38 season, which was held in Auckland on Saturday. Values dropped about 40 per cent., compared with those ruling at the first sale last year. Reserves were not reached in the majority of cases, and only 30 to 35 per cent, of the total offering of 25,000 bales was sold at auction. The estimated return is about £l4 a bale. Though prices fell so steeply compared with the rates of the year before, most growers were pleasantly surprised that the drop was not even greater. The activity of Continental buyers, representing principally Belgian and French interests, and the demand of local mills for super halfbred lines, saved the day. There was a marked absence of the Japanese competition which dominated the first sale last year. Top price offered was 17d for several lots of fine halfbred wool, which were passed at this figure. Passings were exceptionally frequent. The majority of the bids fell substantially short of the reserves, though a proportion of the growers ■sold later by private treaty. The estimated average on the lower range of prices is lOd per lb, compared with 14.225 d per lb and £2O 10s 6d a liale at the opening sale last year, and 8.27 d and £l2 2s at the beginning of the 1935-36 season. The range of prices is as follows:: — Range of Prices.

DROP NOT UNEXPECTED.

“IT MIGHT HAVE BEEN WORSE.”

AUCKLAND, November 28. A sale that offered growers more than many had expected was the general impression of brokers and buyers who attended the Auckland wool sale. There was some measure of surprise expressed at the lack of Japanese activity, but Bradford bidding had not been expected to be spirited, and Continental interest was keen enough to compensate in a measure for this aspect. Forebodings that prices were going to slump badly, not only compared with the November rates of last year, hut also with those of the 1935-36 returns, had undoubtedly existed, and early signs of activity on the part of French and Belgian representatives -was reassuring. Had Bradford been bidding, as occurred last November, when Japanese competition was so strong prices would have been better for growers, but there was enough competition among Continental firms to keep the bidding fairly brisk. Hopes that the recent trade agreement with Germany might result in some substantial orders were not fulfilled. Inquiries failed to reveal any representative with orders from either German or Italian interests. Reasons for the unwillingness of Bradford buyers to operate outside strict limits were suggested by one authority. He said that the bulk of the growers had fixed their reserves at London parity, less the usual margin of a halfpenny, and that since then London values had fallen. Bradford representatives, apparently expecting a further decline, ware endeavouring to keep tho price down. Though prices were not high, bidding was consistent and fairly keen. “The Continent is seeking fine short crossbreds, and it was a typical Continental display,” one buyer stated, when asked to account for the unexpected activity of French and Belgian firms. “The reason for the absence of American bids is the improved wool season in the United States, but it is problematical why the Japanese are not buying. It must not be forgotten that they have a war on their hands.”

Buyers commented 'favourably on the quality and style of the wool offered. They agreed that generally it was superior to the offering at the first sale last year, and that it was no fault of the clip that prices had dropped. Early indications were that sales

would not exceed 30 per ceht. of tlie offering. Subsequently many growers sold by private treaty, and in some instances buyers paid slightly better prices than they had offered at auction. The lower prices caused no surprise. Growers, brokers, and buyers had all expected a decrease, and nobody was optimistic enough to believe that, with the fall in London prices, there would be anything but a sharp decline at the first. New Zealand sale of the hew season. Those intimately connected with the trade, particularly growers, recalling wistfully the amazing values that ruled at the November sale last year, were unwilling to offer any forecasts before the sale commenced. The intense interest taken in the results of the day’s selling was obvious, however, and the gallery was crowded long before the buyers had taken their places. There was a particularly full bench of buyers. The excitement that had been unashamedly displayed the year before was missing. Instead, there was an air of tension and a growing anxiety for the start to be made, so that the fortune of those offering wool would be decided. Distinct signs of nervousness were apparent among the farmers in the gallery and also among the majority of those on the selling floor. Only the buyers seemed unaffected. The first lot comprised four bales of crossbred ewe wool, and bidding rose to 9|d. The lot was sold, as was the next, but these were followed by a long succession of passes, broken by only an occasional sale. The standard for thei day had been fixed. The reaction in the gallery was prompt. Rather surprisingly, relief was more obvious than distress. Growers accepted the turn of events philosophically, realising that, while there was a sharp drop compared with the average of 14.225 d paid last November, the price was still likely to be above that for the 1935-36 season, when, the average was 8.27di per lb. Reserves had in some cases been set high, growers apparently counting on a continuation of the lucrative values of last season This did not apply in the majority of instances, however, but even with moderate reserves lot after lot was passed, buyers refusing to raise their bids often to within 3d or 4d of growers’ estimates of values. The lack of Japanese competition, indeed of any serious competition at all, was soon apparent. Continental representatives dominated the bid ding, and, with Japan and the United States uninterested and Bradford offering prices well below expectations, they had matters very much their own way. French and Belgian buyers were to the fore throughout, and it was due solely to their activity, even though it was within strict limits, that the quantity sold under the hammer was not a great deal smaller.

“It might have been worse, a great deal worse,” one broker said. “Wool prices soared /last year, and few believed that they would remain at that level. Now they are down again, but in some quarters at least they had been expected to fall further. Thanks to the Continental activity, the position is better than it might easily have been.”

Southdown A d. d. 11 to 12 Southdown B £>! to 10| Half bred, 56-58— Extra super 15 to 16 Super — to 15 Average 13 to 141 Half-bred, 50-56— Super 13 to 14 Average 111 to 121 Inferior 10 to 11 Extra Fine Crossbred. 48/50 — Super 11 to 12 Average 101 to 11 Inferior 9 to 10 Fine Crossbred, 46/48 — Super 104 to lOf Average 91 to 10 Inferior 8 to 9 Medium Cross-breds 44-46— Super 10 to 101 Average 9 to 9| Inferior 8 to 9 Coarse Crossbred, 40-44— Super 10 to 101 Average 94 to 9| Inferior 81 to 9 Strong Crossbred, 36-40— Super . 10 to 101 Average 94 to 94 Inferior 81 to 9 Hoggets, 52-56 11 to 111 50-56 10 to 11 48-50 91 to 101 46-48 94 to 101 Bellies and Pieces— Crossbred: Good to super 71 to 81 Low to medium ... 6 to 71 Half bred 8 to 91 Crutchings— 7 to 9 Medium to good Inferior to seedy ... 5 to 61 Locks— Crossbred 41 to 5|