Ashburton Guardian. Magna est Veritas et Prævalebit TUESDAY, NOVEMBER 30, 1937. THE WOOL MARKET.

Ashburton Guardian, Volume 58, Issue 43, 30 November 1937, Page 4

Ashburton Guardian. Magna est Veritas et Prævalebit TUESDAY, NOVEMBER 30, 1937. THE WOOL MARKET.

Though the drop in the price of wool at the first sale of the season at Auckland on Saturday was a substantial one, it did not take either growers or brokers by surprise. Immediate warning of a pending decline came from London last week, when rates for all classes were down compared with those ruling at the previous series. In addition, there were local considerations to account for the difference. Last November the Japanese forced the market in the Dominion by large buying at high prices as the outcome of the suspension of buying in Australia owing to the trade dispute, afterwards adjusted. On the present occasion the Japanese did not make a bid. A factor in this attitude may be that the conflict in China has to some extent disorganised the woollen industry. As in London after the opening, also, Germany was not a competitor at Auckland, the demand being chiefly from France and Belgium. The prices realised at Auckland should not, however, be accepted as setting, the fixed rate for the remainder of the sales. The tendency at recent sales in London and Australia has been to concentrate on the finer qualities, so that the South Island, where the bulk of these sorts is produced, may reasonably expect a relatively improved return. The Auckland growers evidently expect a better price later in the season or there would not have been such heavy withdrawals. Statistically the wool position may reasonably be regarded as sound. Stocks in Yorkshire are smaller than they usually are at this period of the year, and Germany, France and Belgium are reported to be short of supplies, while, if the opposition by manufacturers to the restriction on imports is any guide, Japan is not overstocked. The underlying cause of the decline in wool is to be found, as in other primary products, to quote the chairman of the Bank of New South Wales, in the disturbed international situation rather than in any basic unsoundness in the marketing position itself. Any easing of the tension, such as the cessation of hostilities in China and the end af the civil war in Spain, with their accompanying menace to general peace, will induce revival of trade, especially as the production of wool has not outstripped the world’s normal demands.