IMPROVED OUTLOOK

Auckland Star, Volume LXII, Issue 69, 23 March 1931, Page 4

IMPROVED OUTLOOK

WELLINGTON'S VERDICT

TURN OF THE TIDE AT LAST

The brief results of the Wellington wool sale held on Friday were telegraphed and have already appeared in the ' btar, but the full reports now available emphasise how striking is the change that has come over the trade within the last few weeks. Brokers' reports are unanimous in expressing satisfaction with the sale in which prices evidently exceeded anticipation. The New Zealand Loan ana Mercantile report states: "It was anticipated from the latest reports from London that prices would be higher, but from the outset of Friday's sale it was soon apparent that clients' most sanguine anticipations would be exceeded, for from the very beginning of the sale competition was most spirited, and. at times exThe report of Messrs. Wright, Stephenson and Abraham and Williams says: "For certain classes of wool there was a spectacular rise in values, and although on the whole, the strengthening movement will be gradual, it seems obvious that the long overdue turn of the tide of receding prices has occurred at last." Messrs. Dalgety and Co. report: The sale was from the outset animated, often excited, all sections of the trade endeavouring to secure supplies at limits. From the offering of the first catalogue the Home trade made strenuous efforts to purchase, but generally, especially on the super wools, their limits were below Japan and U.S.A. buyers. Germany was well in the market for wools suitable for their trade and bought freely. Italy was also a good buyer, and France came in strongly for lambs'-, wool and good bellies and pieces. As compared with last Wellington February sale, we quoted super crossbreds 3d, average and inferior 2d to 2 Mid, lambs' wool 2Msd to 3d, bellies and pieces 2d to 2Mjd, all higher. "It is now most satisfactory to be able to report a decided and pronounced rise in wool prices; the long-looked-for happening is long overdue, and rates ruling in the earlier sales were at so low an ebb as to give no return to the grower. The .present rise has come suddenly and could not have been expected by the buying side of the trade.

"The wool industry before to-day in the post-war period has had an abundance — even a superabundance—of wool, but not until now an abundance of cheap wool. Today it has cheap wool and plenty of it, and surely the existence of cheap wool and the prospcet of manufacturing textiles from virgin wool must attract the communities of the world to buy more extensively. That this more extensive demand for wool products will eventually come about, there is not the least doubt, and it is only a few years ago when woil textiles made from the virgin product attained the position of luxury articles. Virgin raw material is now so cheap that it is possible to place real wool within the reach of even the poorest sections of the community, which is a matter for congratulation. _ To-day the industry seems to be getting down to a bread and butter basis, from which there is no escape, and fancy prices for wool and wool textiles have disappeared. Still Under Cost. "The first to suffer financially in the process of reconstruction have been the growers, and secondly, the wool manufacturing interests, the latter having been caught between the fall in values at the raw material end, and in the adjustment of prices in the distribution section of the trade. Although prices appreciated suddenly on Friday, wool is still selling under cost of production, and with an average general improvement in the world's trading conditions there is no reason for pessimism in the future outlook for the textile industry. Wool has been too Cheap. "We are not inclined to the opinion that the rise has been too sudden, and it now seems evident that those so closely connected with the manufacturing side of the trade have badly misjudged the position and are now waking up to the fact that wool has been too cheap. "Japan and the Continent have been valuable clients to the Dominion growers, and their competition has done much to put the market where it is to-day. "Japanese competition is non-existent in the 016? Country, and when it is understood that purchases on behalf of Japan amounted to approximately 300,000 bales in Australasia last season, it is seen at once the value to the colonies or having such a client. It is interesting to note the average price per bale realised in Wellington so far this season:— Per bale. Per £ s d pound December 7 0 1 43d January ......... 7 15 3?d February 7 7 3 Hd Mardh , 10 2 0 7d Dominion Stocks. "In estimating the 1930-31 Dominion offering and sales it is now apparent that a heavy shortage will be recorded when compared with the previous year, and it seems as if the estimated heavy carry-over of old wools has melted—probably mainly to shipments overseas. The New South Wales selling season has virtually ended, and in that centre about 1,000,000 bales have been disposed of."