WOOL TRADE.

Auckland Star, Volume LXX, Issue 30, 6 February 1939, Page 6

WOOL TRADE.

FUTURE PROSPECTS.

INCREASED DEMAND LIKELY. . VALUES NOW REASONABLE. (Received 9.30 a.m.) LONDON, February 5. Messrs. Dawson and Sons, reviewing the wool sales, point out there is no justification for optimism on a long-range view until the European rowers have settled outstanding problems. Meanwhile the Rritisli domestic and financial and industrial positon does not suggest a serious trade recession. AA 001, like most commodities, is now down to a reasonable level which must create additional demand owing to its relative cheapness. The recent sales somewhat irone 1 out the serious disparity between the value of Merinos and crossbreds. the latter receding slightly .more, although even now the average is out of line in its relative value to finer grades.

EFFECT OF POLITICS.

WOOL MARKET SENSITIVE

Tf wool production and trade were the sole controlling factors in the market, the sheep s staple woulil probably be dealer to-day, state .Messrs. Wiiichoinbe, < '.ii suit. Ltd., in their Lit est report. Rut

; mieniaii.jiial Minus, in< Muling actual tlri v 'iitciit, jjnssiijlt* rvwits and siuvrlicH !°i i»i111«►:I s loaders, liave «>[ late I vimis become oi' paramount inipmtnnce in I ill flHcm-ijijf con Hdence <.i otherwise in raw 1111111 *l'i fll values. I'lic Kurr.pcan position j n.is been responsible ior the reuent easing j in demand. I During tlx; |Hint few months the quantity of wool lined in the United States, (treat Britain -i n< { on the ( 'out i lien t has been greater than a year before. .lapan is the <nil\ country in which consumption lias diminished to any decided extent. Wool, however, has not improved in value. It has not fluctuated to any LM'eat decree, hut on trading figures and stocks it should liiivo become dearer; but no person can foresee with any accuracy what is ahead in international developments. Confident feelings arise, but are irtwii time to time dispersed by international unset t lenient. Provided peace is maintained in km ope. states the report, we cannot Bee why wool should cheapen U, any great extent. If peace were felt to be certain teel sure that the sheep's staple 'would be dearer. In the I nited States tilic milLs were repot ted to be active in December. Some of them had sufficient orders on hand to keep them busily occupied on to the end of Fe.bi-ii try. The revival in textile activity in the State* ai:d tiie greater American purchasing of wool and semi-manufactures this season would have shown good resill's on the market if the European atmoaphere had been more peaceful. During the six months ending December 31, Australia exported 10,868 bales of wool to the United States, pr nearly twice the quantity shipped in the corresponding pri iod of 10.17. In November the Bradtord distt i: t's exports to the United States were valued at more than twice the tot.il recorded ill Xoveinber. 11)37. and the la i (rest figures seen since April. 10'17. Yet wool is not dearer. With reason it could have been assumed that. military and naval rearmament would have assisted to send prices upwards owing to the larger employment and greater public purchasing power it creates. It has not done so. Kven metals have not gone to a decidedly higher level, though ships, guns and general equipment all utilise them freely. However, wool has sold with freedom, and that is one favourable factor. It will probably continue selling freely, and the primary producing countries are pursuing a sound policy in meeting the market. A rise in prices in the future is undoubtedly more likely if the sheep's staple is put into consumption and the depressing cffects ot heavy stocks thereby eliminated.