Japanese Wool Buying

Press, Volume LXXII, Issue 21813, 19 June 1936, Page 10

Japanese Wool Buying

Japanese buyers refused to bid at the wool sales held in Melbourne and Sydney since the new Australian tariff was announced, and this retaliation, against the less favourable £erms of entry of Japanese manufactures into Australia baa apparently caused the Commonwealth authorities to relent a little. As both countries a*® vitally Interested in maintaining

the wool trade between Japan and Australia, it is more than probable that before the Australian wool season begins in earnest with the Brisbane sales next week, an agreement satisfactory to both sides will have been reached. The recent Melbourne sales, and the sales which are now in progress in Sydney, are really only clearing up sales, for which the bulk of the entry is of mixed and generally inferior quality. The absence of Japanese buying, therefore, though it has undoubtedly had its effect on prices, has not been of any great inconvenience t.o Japan. Japan must have Australian wool. From the earliest days of the wool textile industry in Japan, Australia has been the principal source from which raw material is drawn, and the industry, in its vast expansion, has continued to depend almost entirely on Australia. In 1935, of the total imports to Japan, 94 per cent, came from the Commonwealth, and this proportion was about normal. The actual volume of imports has increased in recent years at a most impressive rate. It rose from 114,000,0001b in 1928 to 243,000,0001b in 1935, from about 10,000,0001b before the war, and the expansion has been felt markedly in the Australian markets. Increasing use of wool in Japan and the countries under her influence has been the cause of the expansion of consumption. With the home demand, which is still insistent, however, there has in recent years been an increase l:i Japanese exports of woollen fabrics hardly less impressive than the increase in home consumption. The whole technique of the Japanese industry has been developed on Australian types of wool, and apart from any other consideration, a change-over to other types would mean a degree of disorganisation at the manufacturing end. It is also doubtful whether the rest of the world, which in this instance means South Africa and New Zealand, could supply the quantity of merino wool. Japan will need to supply her expanding market at home and abroad. Australian wool is therefore a necessary, Japanese buying is also of tremendous importance to Australia. In the 1934-35 season, the latest for which figures are available, Australia sold to Japan 21 per cent, of her wool output, and that percentage has been substantially increased in the season just closing. Great Britain, the largest market for Australian wool, took 33 per cent, of the total clip in the same year. Japanese buying has been a steady influence on Australian prices for a number of years. Should the two countries not reach some agreement before the new season begins, Japan will have to turn her attention somewhere else, and New Zealand will undoubtedly benefit, but with both countries so much in need of maintaining the trade, there appears to be little likelihood of the deadlock’s continuing.