UNCERTAINTY.

Auckland Star, Volume LXVIII, Issue 281, 26 November 1937, Page 8

UNCERTAINTY.

PRICES FOR WOOL.

GROWERS* PROBLEM.

AUCKLAND SALE TO-MORROW. ECONOMIC PARADOX. To sell or not to sell ? That is the question. To-morrow Auckland district woolgrowers, through their brokers, will have to face a real problem. Twentyfive thousand bales of wool now lying in the Parnell stores are to be offered for sale, and they will be submitted under most unusual conditions. An economio paradox which exists at the present time is puzzling commercial men in all "the leading financial world centres. When all indexes point to trade activity and general prosperity prices of practically all raw materials have come tumbling down, and huge fortunes have been lost in the last few months by speculators in associated securities. For a while wool, strong in the sfextistical position that stocks were low and mills were busy, held out moderately well, but ultimately it was caught in the maelstrom, and prices of the popular staple have fallen rapidly in the last few months. The London wool sales now proceeding opened with a sharp fall, and weekly reports from Bradford tell consistently of quiet markets, falling values and hesitant buyers. The following table shows how the tops market has steadily slipped in the last few months: —

Oct. Not. Nov. Nov. Nov. 28. 4. 11. 18. 25. per lb. per lb. per lb. per lb. per lb. d. (J. d. d. d. Seventies . 33 33 311 30 28i Sixty-fours 31 31 30 28 27 Sixths ... 30 30 29 27 26 Fifty-eijfhts 27 27 20 24J 24J Fifty-sixes . 25J 'ia\ 23 23 23 Fifties ... 23 23 23 20 20 Forty-sixes. — — — —- — Forties ... — — — "— — Fall in Crossbreds. Crossbred, wool, which predominates in the New Zealand clip, had enjoyed a great run at the close of last year and in the early months of 1937, but in the recent decline it has fallen further than have Merino and other liner types. Just what crossbred fleece is worth today is difficult to assess. It will be noted that there have been no official quotations of the lower counts of tops in recent weeks, but private cables are to the effect that very low offers are being made for his class of wool. In this connection the comments on the Bradford market received, together with the weekly quotations cabled from London yesterday through the Press Association, are significant. They read as follows:— "Topmakers are inclined to hold out against unreasonable concessions demanded by users. There is fair hand-to-mouth consumption."

A year ago Auckland sent cheer germs throughout the length and breadth of the Dominion with the glowing reports of its fine opening sale, an excellent augury for the most successful season New Zealand wool growers had experienced in a decade. At that time, however, a keen demand on Itehalf of Japanese buyers was responsible for forcing up prices to a level that Bradford and the Continent had to come to later, on. To-day an entirely different position is in prospect. United States Business Setback. Americans are not likely to bid as freely as last'year, for there has been a definite setback in business in the United States during the past three weeks. This brings us back to our chief market for all our primary products— Great Britain. The British textile industry is busy and Bradford has always been the best customer for the Dominion clip. But Yorkslriremen are famous as shrewd buyers and they have been caught too often by the falling markets to have any compunction about making the best deal they can. If Bradford, free from serious competition, is given the opportunity to fix the price of the Auckland wool clip at tomorrow's sale, incidentally setting a standard for later Dominion sales, what is the figure likely to be! •If the future can be gauged from the records of the past a perusal of the following tabic showing the actual results at the opening sales in Auckland during the past eight seasons is of interest: —

Average Average per bale. per lb. Value. £ s. d. d. £ mi!B 22 11 0 15.64 490.000 1020 15 9 2 10.95 238.123 1930 6 13 2 4.67 100,759 1931 7 5 10 5.06 103,131 1982 5 12 3 8.68 132.118 1933 13 18 2 9.7 327.694 1934 7 16 2J 5.628 88.250 1935 12 2 0 8.27 240.154 1936 20 10 6 14.225 439.270 It will be seen that last November the average return was over 1/2 per lb, more than 50 per cent above the 1935 figure, and nearly three times as high as in 1934. The wide fluctuations that are possible can be seen on reference to the returns in 1932, when farmers had to accept just over 3Jd per lb for wool that probably cost three times thijit amount to produce, even when costs were much lower than they are to-day.

What Will the Fall Be?

Of to-morrow's prospects it can be safely gaid that when the brokers offer their clients' wool to a large bench of buyers they will not expect to receive an average of 1/2 per lb. How great will the reduction be? That is the question. If offers are substantially below that fijrure will the brokers accept them? In a general sense it is a sound economic maxim for producers to meet the market. Unsold stocks are a perpetual hindrance to market recovery, but it must be realised that conditions to-day are not normal.

With the world, needing wool and able to pay for it—for international trade has definitely improved in the last 12 months —there seems no sound reason why the producer should not receive a fair return for his product.

"We have not the slightest idea how the values will ransre to-morrow. Even the buyers themselves do not know, as some have not yet received their buying instructions," remarked an Auckland broker to-dav.

LONDON SALES CONTINUE.

EARLY CLOSING ANNOUNCED.

LONDON, November 23. At the wool sales t>o43 bales were offend, including 083 New Zealand. Four thousand nine hundred and eighty-one bale.* were sold. There was a good selection, chiefly Australian greasy Merinos, with active competition at full current rates. The sales will conclude on November 20 instead of December 1.

New Zealand greasy halfbred "Stone wall," 121 d.