FINANCE AND COMMERCE

Press, Volume LXXIV, Issue 22593, 24 December 1938, Page 15

FINANCE AND COMMERCE

SUBSTITUTES FOR WOOL GROWTH IN RECENT YEARS HOW GREAT A THREAT TO FLEECE ? IBy S.A.H.] Artificial wool, or staple fibre, to give the synthetic product its correct title, is a child of the great depression. In 1932 world output was 20,000.0001 b. For 1937 it was 31 times as great at 622.000. To make that latter figure clearly significant. consider this fact--622.000. 0001 b represents three times the New Zealand wool dip. as re-du(-ed to equivalent clean scoured weight It represents fully the equivalent of the whole clip of Australia the worlds most important wool producing nation.

In only five years there had arisen a rival wool producer, the eaual of the greatest in the business; with an output equalling that of Australia’s 100,000.000 odd sheep. Her flocks ar e the creation of a century. xi.^' ( Tvr l^en^i n S. u P on this phenomenon the National City Bank of New York’s bulletin of-last June stated: “No other synthetic product, competing with a natura! commodity, has Ivor approached this record of growth Tt is one of the most striking of ali examples of the endless change that P* ace * he . industries and in trade, through the introduction of new products, and new methods, growing ledge f ” SCientlfiC experim ent and know"jo detached observer this is undoubtedly “very interesting ’’ But *° people cf New Zealand it is -it fs aSfng merely foresting How greatly we depend upon wool is not always realised. This commodity preduces from 20 to 30 per cent, of oir export wealth from £12,000,000 to £ 19.000,000 a season Any serious diminishment of that income mus; assuredly penalise our whole fiatonel economy * wSfti,™ r L W ? 01 displaced could we well turn hje _farms now producing it t °On t +ui al^ ly V 3 Production. On the other hand, wool is of eater thin monetary value to us, in that it is one of our few major exports witi a true world market. It is one product of which we would probably be able to market a vastly expanded output without fears of quota strmgulation. c P unt , 11 is greatly to be hoped tht natural wool is not crushed by synthetic wool. And, without pandering mere optimism, one may ad''a?c,e to sl }ow that “all is not lost* that wool still has a future.

k Totalitarian Product So mhy and so conflicting opinions upon th quality of artificial wool are heard fiat it is difficult to arrive at a true stimate of its worth. ITiis in part hs in nersonal bias of the autnqrjy speaking, but more so in the varym tynes and qualities of the procuctioi Germany alone has already oevelopd about 60 varieties of synthetic fibre. Artificial wool is being produed from such varied raw matenls as beechwood pulp and milk casein

-A®. 2 quality, the most significant fact isthat Germany, Italy, and Japan are rcponsible for almost 90 per Ce ?c £ world’s production of artiflcd wool. Would it not appear to cu,f* + £ a ? e ®L h l^ in g to make do? Stiegth is added to this view when produaon, nation by nation, is analysed id compared with the comparative otputs of artificial silk , or rayon, to giv the correct term.

Brian and the United States of Ameca, although amongst the leading rayorproducers, have very small outputs f artificial wool. These nations are ot forced to use the synthetic pro<rt; they can afford the real thing. Ameca’s wool consumption last year exc«ded her artificial woo] output almo«18 times. Yet her industries are full acquainted with rayon, for they proiced more than one-quarter of the woii’s supply and ranked second, only Japi producing more, and that by a sms margin. Lewise with Britain, who produced alnst as much rayon as Germany, butot one-sixth of Germany’s output of .tificial wool Vre the product so good as sometom; declared, surely these nations wod be great producers of it? How Cheap? 'fe basis of much of the fear currerregarding ’wool’s rival is the price facr. It is felt widely that wool pris might be driven so low as to pugrowers out of business. 1 this connexion, the price history ofyntlxetic fibres is of value. In Jaaary, 1928, artificial silk was quoted w’lesale to spinners at 75d per lb, iri>ctober, 1931, at 37Jd, August, 1932, 2£d, February, 1934, 2s 84d, June, 18, 2s 6d, September, 1937 (the boom oa year ago) 2s 7£d, January of this y.r, 2s 3d, and in May, Is HJd. The rent sharp fall was a trading feate more than technique, as rayon pduction fell off sharply. Stocks iuidated brought cut prices. The lesson here may be read that

yon prices have fallen from 75d to Id per lb on similar prosperity levels 3 years apart. The artificial wool quotations are iow down to 12£ d per lb, and have >een steady at that price over the last /ear. It would appear that a possible, indeed, probable, bedrock here to be expected would lie lOd per lb. New Zealand crossbred wool would have to sell at 7d per lb to provide an equivalent cheap fibre in scoured condition. This is assuming that artificials producers can yet lower their price by 20 per cent. As yet all evidence points to artificial wool being decidedly inferior. Evidence of this is available from Japan, where compulsory use of synthetics is a law; “Woollen yarn or cloths must contain from 10 to 30 per cent, of staple fibre.” Quite clearly the fibre is an adulteration and not something just as good. ■ With this realisation may come comfort in thought for the future. For example, were wool to maintain a 35 per cent, premium over artificial, owing to superior qualities, it might realise to Is Id per lb in future years. That this is not mere wild optimism is proved by the 1936-37 wool season. At that time the world’s output of synthetic fibre had reached till then record levels and all natural textile fibres were offering abundantly, yet wool *old at prices that have seldom been exceeded in the Dominion’s industry. Not Enough Wool A basic fact of the position is that ‘here is not enough real wool available in the world to satisfy a tithe of potential demand. Over the last decade the world’s sheep population has not increased and Wool output has been practically unchanged at 3900 million lb per annum. That provides only 21b a head for all the people on earth. We in New Zealand use approximately 141 b a head each year. Our wool consumption is se ven times the world average. Properly developed, the potential wool demand could be fourfold that of the present. It is from consideration of this view9Wnt that some German authorities have actually proclaimed artificial wool as a -friend and not a final foe of natural wool. Their argument is that the cheap garments produced from synthetic fibres will open up fresh markets for woollen type clothing; that real wool will retain its superiority. And that amonst the new customers will be found a proportion who will desire the real woollen articles. Thus

GROCERY TRADE PRICES AND PROSPECTS Exceptionally busy trading has been enj.qyed during the week by both wholesale and retail grocery houses. All lines have been in keen demand, and the call for Christmas novelties and luxury goods has been heavy. Inquiries made yesterday failed to disclose any definite shortage of any particular lines, although stocks of some goods are light. Import Restrictions

The inability during the week of importers to obtain any clear information from the Government Departments about what can be imported under licence has upset business. Yesterday it was stated that the Customs Department was in a position to consider the issuing of licences, but this was too late to be of any use before closing for the holidays. There has been a noticeable dearth of oversea quotations during the last week or 10 days, but it is expected that the regular quotations received by cablegrams will be resumed as soon as importers can definitely advise oversea shippers that certain goods for New Zealand can be dispatched and landed under licences. As it is at present, it would be a waste of money for oversea firms to cable quotations to New Zealand brokers for goods for which no landing permits could be obtained. , Eggs and Butter The egg market held up well during the week, and prices paid by city stores for supplies to farmers have not altered. Asked yesterday what he considered would be the position of the fresh egg market after the Christmas and New Year business was over, a city buyer gave it as his opinion that prices would still hold up to present levels at least. Supplies of separator butter are now fairly plentiful, but the demand is equal to the supply, and consequently all parcels coming on to the city market are easily disposed of. Buyers’ prices remain as previously mentioned. Fruit Salad Australian packers have advised that it will be the end of January before the new season’s pack of fruit salad is ready for shipment. Prices are firm, and the prospects are that some packers will sell their total output within the first few months after the season opens. Sago and Tapioca A further weakening in Singapore this week is noted in the prices of sago and tapioca. Pearl tapioca is down 5s a ton, and sago 2s 6d a ton. Values at present are low, and they must be very close to if not under the cost of production. Macaroni and Vermicelli Recently the Commonwealth Government placed a duty of about £5 10s a ton on flour, which, being very cheap in Australia could best carry this impost with a slight rise in bread prices. This increase has caused the Commonwealth manufacturers of macaroni and vermicelli to advance their prices by £d per lb.

It is not known whether, on exportation from Australia of macaroni and vermicelli, the duty on the flour content (which is practically 100 per cent.) is refunded to the producers, or not, but, if no drawback of duty is to be paid their prices to New Zealand buyers must be increased in the near future.

It has been said by some people that the manufacture of macaroni and vermicelli could be undertaken profitably in New Zealand, but a very vital question has first to be considered and that is the suitability or otherwise of New Zealand flour for the production of good class products of this nature. Canned Tomatoes There is an acute shortage in New Zealand of canned tomatoes, but with the fresh fruit now coming on to the market the position will not be so bad in a few weeks. It will, however, be about March before the new season’s pack is available, and grocers, who require new season’s canned tomatoes should con'ider contracting when prices are named. Peas and Maize Recent Australian quotations contain the following:—Peas, market firm, at 8s; maize, ss; both quotations f.0.b., Melbourne, Tea A catalogue of Indian teas was auctioned last week at Calcutta, when 2,250,0001 b "were available for export. The demand was good and persistent. All tippy teas were in strong demand at up to 6 pies increase in price. A fair quantity of Dooars and Darjeelings was entered, and these lines showed an improvement in quality on previous entries. Broken Pekoes, and commons sold well and many parcels advanced 3 pies. The market for tea is firm in Calcutta and reported to be steady. Many useful lines of tea were included in last v/eek’s auction catalogue of Ceylon tea sold at Colombo. Quality was maintained and this assisted the market. Common teas advanced by another 1 cent, and all other lines were firm and steady at previous rates. The Java tea market last week in Batavia was a little more active, quality in many instances disclosing an improvement. Prices generally ran from the level of the previous week to slightly higher values, where quality improvement was present. The stocks of tea in London at the end of November were 204,000,0001 b, being 22,000,0001 b higher than at the end of October. Pineapples

Singapore pineapples are a shade higher this week at port of shipment and a cablegram states that heavy buying has taken place, and higher prices are anticipated. Canary Seed Argentine canary seed is now much lower than it has been for some time, and some internal upset in the Argentine, concerning the marketing of canary seed (and some other products) has been the main cause of values declining. The position is obscure and prudent buyers are not buying any more than normal requirements. Sultanas The highest grade sultanas now available in Australia, according to a report to hand this week, is 3 crown, as all better grades have either been sold for domestic consumption or shipped to London. Nutmegs An advance of 4s 8d per cwt in the fob price of nutmegs is noted m cablegrams recently received from the East. Whitebait New season’s whitebait has been quoted, but owing to the high price the local demand will be small. Exceptionally good prices can always be obtained in Australia for New Zealand whitebait, and it is the constant demand there at high prices that causes New Zealand values to stand so nign.

wool will gain new markets and everwider appreciation. History may yet prove this theory sound. That synthetics do not necessarily spell the doom of natural products is proved by the history of margarine versus butter. ~ Whilst demanding close attention, the rise of artificial wool does not call for black pessimism. Temperate optimism, coupled with determination to fight back, is called for. Our greatest defence of the fleece is to keep costs of production at the lowest possible level, and also to raise quality to the utmost possible degree.