LOWER WOOL PRICES

Press, Volume LXXIV, Issue 22370, 6 April 1938, Page 13

LOWER WOOL PRICES

MORE STABLE MARKET EXPECTED BRITISH STOCKS LOW Early in January it became evident that the advance in the prices of wool, tops, and yarns during December was caused by topmakers having been caught with inadequate supplies of wool when the buying spurt developed, says the British Department of Overseas Trade in its latest survey. It was necessary to buy substantial quantities of wool at the December sales in Australia and New Zealand before the Christmas recess in order to cover commitments. Consequently there was a general speeding up of competition at the sources of supply, accompanied by advancing prices of raw material and semi-manufactures. Later, it was evident that the majority of users of tops had covered their requirements at the prices ruling early in December and were nor disposed to buy again at the higher prices, then quoted. There was a general policy of waiting, and the Sydney sales opened with a decline on the closing rates in December, and within a week prices of merino, fine crossbreds, and tops reverted to the lowest point recorded toward the end of November. The finer crossbreds have continued to move in sympathy with merinos, but medium and coarse sorts did not return to the low level of late November, and it was apparent that these grades were in a rather stronger position for the time being than merino wools. It was perhaps mainly through the supply position. At the beginning of the 1937-38 season in New Zealand and in South America, stocks of medium and low wools in the principal consuming centres of the United Kingdom and on the Continent were very depreciated. Prepared sorts were more difficult to buy for early delivery than carded sorts, and this made the former relatively dear. The marketing of the new Argentine clip was unusually late, -and growers were inclined to hold their wool back because of the drop in prices as compared with the previous season, and this accentuated the shortage of wools suitable for low prepared tops. Because of the prevailing policy of keeping stocks at the lowest possible Eoint at all stages of the industry, usiness, apart from the brief spurt in December, has been very quiet over a period of four or five months, and, in view of the continuous fall in prices from September onward, Bradford importers did not buy anywhere near normal weights in Australia or in any other market. The total imports of sheep’s and lamb’s wool into this country during the whole of 1937 were 783.8 million lb, as compared with 913.9 million lb in 1936, and 864.1 million lb in 1935. When re-exports are deducted, the quantities retained in each of the three years were: 1937, 563.4 million lb; 1936, 648.9 million lb; 1935, 6C5 million lb. Thus there was a decline of more than 15 per cent, in retained imports during 1937 as compared with 1936, and this, in all probability, more than offset the decrease in consumption. The wool importing season commences in November, and if the retained imports for November and December, 1937, are compared with those of November and December, 1936, they show a surprising decline. The retained imports, for the two months November and December, 1937, were 79.5 million lb, as compared with 119.6 million lb in the last two months of 1936, a drop of more than 33 per cent. This is the outcome of the restricted buying at the Australian sales and the late arrival on the market of the South African and South American clips. Midway during January there were indications of a more settled basis of values which lent support to the general view that prices were at a level at which some measure of stability might be expected, although crossbreds looked rather dear in comparison with merinos. Although exports of tops and yarns during J937 showed a further substantial decline, there was on the other hand an advance on recent years in exports of»woollen and worsted tissues. Shipments during 1937 reached a total of 122.8 million square yards, as compared with 117.9 million square yards in 1936 and 109.7 million square yards in 1935. The best market last year was Canada, which took no less than 17.7 million square yards, and the Argentine came next with 13.4 million square yards.

SHOW DATES Oxford—April 7. Temuka and Geraldine, at Winches* ter—April 9. Flaxbourne, at Ward—April 9. Mackenzie County (Falrlie)—April 13. Malvern, at Sheffield —April 21.