THE FIRST.

Auckland Star, Volume LXV, Issue 2, 3 January 1934, Page 4

THE FIRST.

WOOL'S RECOVERY. HEARTENING PROSPECT. The outlook for wool as a world commodity is summed up by the well-known firm of Messrs. H. Dawson, Sons and Co., Ltd. The review makes cheerful reading, and says the wool has been the first to recover after the world crisis. The consumption in Merinos throughout the West Biding has been terrific, and is one of the main factors that has achieved the absorption of abnormal Australian and South African clips. Yorkshire stocks of raw wool and top remain light; during recent months these have been drawn upon for export to America and by the Continent in certain grades; comebacks and fine crossbreds are extremely scarce. The overseas trade returns, although only an index of what has already happened, reflect the expansion of exports in wool, tops, yarns and piece goods, all of which have made progress. More workers in employment throughout the nation, combined with improving railway traffic, indicate clearly an accelerated home trade. The mills in the West Biding are running almost to capacity, and more night shifts are at work than for many years past. The decline of unemployment amongst textile workers, and particularly weavers, provides further proof if it were needed. It is not surprising therefore, that Bradford has taken the lead in the present upward movement, to which German buyers also have recently given added strength.

Franco is not so happily placed, and appears to be hampered by lack of internal trade. In face of tierce competition from countries with depreciated currencies, her exports of tops have increased substantially to Germany, Belgium and Czechoslovakia, and in total are 30 per cent higher than 1032. Yarn 3 also show about 20 per cent increase, but piece goods arc down by about 6 per cent. Stocks of tops are high, at a time when thev should normally be low. Crossbreds total more than 10,000,000 kilos, which is a record figure for recent years; the total of Continental stock of tops, although mainly in crossbreds, is sufficiently heavy to steady any spasmodic speculative demand for raw wool.

Germany a Free Purchaser. France has been comparatively quiescent in Australia this season, although again chief operator in South Africa. Germany, however, has purchased freely, and her takings from Australia are substantially heavier than last year. Yorkshire buyers have been prominent, especially in Sydney, and arrivals at the turn of the year may dull the edge of the market, should consumption slacken or sentiment change. The new season's wools have come forward to the ports in South Africa slowly, and the selling programme is almost a month later than usual. It is therefore too early and too difficult to estimate the clip accurately, but taken in conjunction with Australia, a total decline of about 700,000 bales is anticipated by the trade. Australian production remains on a high level, at over 2,500,000 bales, and the clean content of the South African clip has tended to increase in recent years. Many marks are showing hunger fine quality and promise no shortage of the finest grades. Excluding the record shearing of over 3,000,000 bales in 1932-33, this season's Australian output will be slightly above the average of the previous seven years, and 750.000 bales above the 1921-25 average, during which period small clips were supplemented by war accumulations.

Eccent production has been absorbed in remarkable fashion. The London stock is about 25,000 bales below November, 1932, since when Merinos have advanced approximately 75 per cent, and low crossbreds 45 per cent. What surplus remains is confined to crossbreds, chiefly of the lowest qualities, of which some 50,000 bales were exported during the summer from the Argentine to America for speculative account; not more than the equivalent of one-third of a New Zealand clip remains for sale altogether in London, afloat, or in New Zealand. One of the first results of higher Merino prices will be the rapid clearance of the New Zealand surplus on an advancing market, but the new season's wool commences to be marketed on November 27, and will easily take care of machinery needs.

Other Commodities Decline. While wool has registered startling advances, many other commodities have declined, and further uncertainty is being created by the desperate efforts of the American Administration to strengthen their industry and maintain a financial structure over-extended by the boom which ended in 1929. The depreciating dollar gives temporary competitive power in the export markets of the world, which Great Britain will feel first of all the nations . . . When the American situation has taken a more favourable turn it may be rightly considered that wool has led the way and has been the first to recover after the world crisis. '