The Press TUESDAY, SEPTEMBER 14, 1937. Wool for Japan

Press, Volume LXXIII, Issue 22197, 14 September 1937, Page 8

The Press TUESDAY, SEPTEMBER 14, 1937. Wool for Japan

Though there has been so far no official announcement on the subject, it appears that the Japanese plan to restrict severely the import of wool is already operating to some degree. Cabled messages recently have referred to a cutting down of imports, but no exact figures have been given to show the extent of the reduction. Japan has in recent years taken an important place among the wool importing countries of the world, and has as rapidly increased exports of woollen goods —so rapidly, in fact, that many countries, to protect their own wool textile industries, have been forced into systems of- more or less rigid control of Japanese imports. It appears, however, that the industry has been able to meet all these handicaps successfully, and the present desire to reduce wool purchases is obviously dictated by other considerations than considerations of trade. Japanese wool buying has been of more importance to Australia than to any other country. Until the trade dispute in June, 1936, Japan bought considerably more than 90 per cent, of her total imports in Australia. The trade dispute forced Japan for six months into the other markets, and New Zealand, for the first half of last season, had the benefit of buying which appeared to be governed only by considerations of acquiring wool, with no great regard to price. Japan has in recent years imported between 700,000 and 800,000 bales of wool annually, and has bought practically nothing outside Australia, NewZealand, and South Africa. Roughly 1 per cent, of her requirements were drawn from South American countries. The trade diversion policy of the Commonwealth Government gave rise i.i June, 1936, to retaliatory measures by Japan, which refused to buy Australian wool. An agreement was finally concluded by the two countries, but not until-six months of the selling season had gone by, and Japan had been forced to buy freely in other markets. The agreement, which was for the 18 months beginning in January this year, provides that in return for certain concessions in the textile markets of Australia, Japan will purchase 800,000 bales of Australian wool, that is about 533,000 bales a year. This quantity alone appears to be more than the Japanese authorities are willing to admit, if their policy of a drastic reduction of imports is to be carried out. Australia is, however, already becoming anxious about Japanese performance, of the contract, because since the opening of the Australian wool selling season a fortnight ago, there has been no Japanese buying. Japan has recently shown a disposition to turn to South American countries for greater quantities of wool, and increased very considerably her purchases there last year, mainly from the Argentine and Uruguay. It is considered by many observers that the South American countries offer an excellent chance to Japan for a development of mutual trade, and expansion of Japanese wool buying in South America is considered highly probable. A further source of supply, but one which will take a great deal of development, is Manchuria, which has embarked on a plan to increase its flocks to 15,000,000, and from them supply about one-third of the needs of Japan. Manchuria cannot at present be regarded as a factor in the world's wool market, and many 'years must obviously elapse before Japan can count on more than an infinitesimal part of her wool requirements from this source. A survey made in 1936 credits Manchuria with a sheep population of 4,900,000, which produce the extraordinarily low total of 10,000,0001b of wooL Most of the flocks are of the fattailed breeds, and are kept almost exclusively for their meat and skins. Some extremely coarse carpet types of wool are produced. To promote a wool industry of any importance in Manchuria will require the education of a people, now mainly nomadic, in modern sheepfarming methods, beside the importation of breeds that may improve the native stock. An immediate cessation of any large percentage of Japanese buying in Australia would have a very severe effect on the Japanese textile industry, which has been developed and maintained on Australian wool, and which has not developed the technique necessary to deal with wools other than those produced almost exclusively in Australia. It appears certain that there will be nome restriction of Japanese wool imports as a whole, and this restriction is bound to have its effect on the market for wool produced in New Zealand.

smaller States bordering on the Mediterranean. The famous " Berlin-Rome axis " has been revealed as a much less effective force in European politics than was commonly supposed. The Italian Government is now in a dilemma. In view of its extravagant claims to primacy in the Mediterranean, it can hardly allow Great Britain and France to assume the whole responsibility for protecting Mediterranean trade routes, particularly as this responsibility would justify a heavy reinforcement of the Mediterranean fleets of these Powers. On the other hand, to participate scheme which it has already by inference condemned would amount to a diplomatic retreat. There will, of course, be no illusions as to the motives behind British and French policy. The patrol system is not primarily a measure to make the non-interven-tion agreement more effective and will probably benefit General Franco much more than it benefits the Spanish Government. It is primarily an expression of the determination of the British and French Governments to protect sea routes which are of vital importance to them.