DECLINE IN WOOL VALUES.

Auckland Star, Volume LVI, Issue 66, 19 March 1925, Page 7

DECLINE IN WOOL VALUES.

MANUFACTURERS' STRUGGLE. SUBSTITUTES SCARCE AXD DEAR. (By Telegraph.—Special to "Star.") j WELLINGTON, Monday. Since November last wool values have declined by fully twenty-five per cent, and, as the outlook continues unfavourable, there is naturally 'considerable concern. The wool market has displayed remarkable variations since the close of the war. For twenty years before the I war the quantity of wool grown in exporting countries had remained almost stationary and consumption fluctuated ' very little. Any slight decrease in production was met by the admixture of cotton and by resort to the spinning of finer counts. At the same time it was apparent before the war to all students of wool supplies and consumption that the wool available was barely sufficient to meet the requirements of the world's trade, and it was then inevitable that prices would tend upwards because demand had a tendency to exceed supply. When the war ended there i was an enormous quantity of wool on hand, which, if it had been thrown on the market, would have had a ruinous effect on values, nevertheless its very .existence adversely influenced values. To prevent the woof being sacrificed, tho British-Australian Wool Realisation j Association was formed, and, under I agreement with various sections in the jwool trade, the offerings were limited, and a market slump was thus prevented. Xew Zealand did not join up with the I 8.A.W.R.A., but it was decided to work jin with the B.A.W.R.A.'s policy of limit- | ing the offerings at the sales, "and under I the Board of Trade Act the New ZoaI land Wool Committee was set up. The I last bale of wool under the control of j B.A.W.R.A. was sold at Liverpool on May 2. and the enormous weight of wool handled by that organisation passed out of first hands in a remarkably short period of time. A Constant Struggle. It lias been a constant struggle latterly to obtain, for the manufactured and semi-manufactured article, prices commensurate with those ruling for the raw material, and the demand for tho high-priced goods was somewhat cheeked, but the limited supply of wool j available has continually won the day. ' Manufacturers have made what use they could of substitutes, but substitutes too have become scarce and dear. NoiU were selling to within a few pence of tops, and cotton has been at a phohibitive price, for last year American middling upland cotton was selling up to 18d per lb, and was practically as dear as wool. Some economy was effected by the fashions for women's wear, and the greater use of artificial silk, especially for hosiery, no doubt helped a little. A recent cable message stated that Yorkshire textile manufacturers have secretly experimented in producing a cloth compound of wool 10 per cent., and 50 per cent, artificial silk, for men's and women's wear. Experts are said to be favourable and considerable capital is available for development. How much of this is to be taken seriously it is difficult to say; at the same time it would be foolish to altogether discount it. Some time ago it was stated that a method of stretching wool without destroying its strength had been discovered. But, allowing for all this, the fact remains that the consumption of wool just now is about 1,000,000 bales per annum in excess of the present production. This was easily accounted for. At a low estimate the United States would be compelled to purchase abroad at least 500.000 bales more per annum than pre-war on account of her decreasing domestic production of wool; the enormously increased wealth of the country; and the heavy increase in popuilation. Before the war the United KingI dom was the largest purchaser of mari ketable wools, and also the largest conI sumer of raw wool, but to-day that position was occupied by the United States. The Position To-day. ; Notwithstanding the complaints of ' Bradford, the British textile trade appears to have done fairly well during the past year. British Board of Trade figures for the year shov. that total : imports of raw wool were 7G4,951,3001b, the re-exported total 358,940,5001b, and the amount retained 40G,101,8001b, the respective totals in 1923 having been 739,167,4001b. 412.938,8001b, and 326,228,COOlb. Of the exported quantity, Germany took 111,000,0001b foreign and 5,000,0001b of British wool, the aggregate being more than she bought in IPI3. Exports came out quite well at £C,794.395, or £5,167,953 more than in 1925. Finance had been a difficult matter for months past, but even if this difficulty did not exist prices would still have fallen, for the determining factor I has been the purchasing power of the j masses. In some quarters there is a disposition to blame the Wool Committee as being in some measure responsible for the fall in values, as the com- , mittce restricted the offerings. If , limitation had not been imposed the drop in values would have come earlier and would have been more severe. Jt was. by nursing the market that many difficulties were overcome, particularly '; that of finance. The values ruling to- : day are cheap in comparison with those ■j of November and December; they are , nevertheless reasonable, and look like holding. Buyers have been acting with extreme caution, but with prices at their present level there should be a j steady demand for both Merino and j crossbred wools. An outstanding feaI ture of recent months has been the eouij parative inactivity of American buyers. I A certain quantity of New Zealand wool has been secured for the United States, but nothing like the quantity that was thought would go t<) that j country. In the United States more I wool is grown than in the. British Isles, ! but the domestic supply of wool is ■| barely one-third of the average eon- • fcumptiou. Consumption in tbe Unite I , States for the eleven months to Novem- : ler 30 last consisted of 2.i",0(i3,2941& 'domestic and 232,909.2131b foieign wool, i.nri stocks in Boston at the end ol" J December last were 4,92.'>,00UH), which lis the lowest total recorded for some j years. Mill consumption is already around 50,000,0001b per monMi. while in , ports have probably not bejn more than one-third as much. Stocks arc I said to be very light in America, Continental supplies are also reported to be pmall, and Britain is b\ r no means over- • stocked. In spite of the extended use !of substitutes, and the difficulties of J finance, there is a keen demnnd for , wool at a reasonable price, and there is therefore not the slightest prospect of any slump in values. Prices will fluctuate but within narrow limits of the present quotations. It is (lifficulc to see what there is to gain by withholding wool from the market, f<? c prices are not likely to go back to the level ruling in November and December or even January, while on the other , hand they may go lower than they are at present.