WORLD WOOL VALUES

Press, Volume LXXXIV, Issue 25677, 14 December 1948, Page 6

WORLD WOOL VALUES

INFLUENCE OF RUSSIAN BUYING IMMEDIATE PROSPECTS DISCUSSED (Special Correspondent N.Z.P.A.) LONDON, Dec. 13. The influence of the Soviet in the buying of raw wool in London, New York, and Commonwealth markets has had a considerable influence on prices for some time, comments the city editor of the “Manchester Guardian.” Traders assume that some wool, like rubber and other raw materials, bought this year, may be intended for “strategic” reserve stocks. Some observe that the type of wool preferred by Soviet buyers is particularly suited to uniforms, but closer inquiry suggests that the heavy effect of these purchases is due more to the manner than to the volume of Soviet buying. It is said in the wool trade that Russia's buying agents usually have orders to buy fixed quantities of clearly defined types of wool without waiting until the market is favourable for that particular type, and almpst without regard for prices. They come into the market suddenly and withdraw just as abruptly, which exaggerates the impact of their intervention on prices —and makes their orders look much bigger than they are. As a rule they buy fine crossbred wool, free of faults. In January they came into the market as suddenly as usual at the tail-end of the sales when supplies had got thin. By doing so they raised the price unduly agaibst themselves. In March they stopped buying suddenly, and the tall of prices by about 20 per cent, in London was at least partly due to these tactics. It is not clear whether their recent purchases had the same effect or whether they are learning to adapt their methods to the facilities offered by free markets. There should be no surprise at the continued ability of the Soviet Government to spend large amounts in sterling, the "Manchester Guardian” continues. The Anglo-Soviet trade deal of 1947-48 was calculated to cause immediate Russian exports'of grains, etc., while British exports of capital goods naturally take time. The large portion of sterling earned through this difference in timing has probably been spent during the year on imports of rubber and other sterling area commodities, but there is no reason to think that these funds are exhausted. They have, also, plenty of dollars. As the Russians make no particular difference between dollars and sterling, they repeatedly paid sterling area traders in dollars or acquired sterling by selling dollars. But the total woo) purchases have not been large. In the three months, July to September, Russia bought at Australian sales about 11,400,0001 b, which is less than Belgian and a little more than a quarter of French purchases. At the London. November sales buyers for Russia have again been active, but the volume of orders is not believed to have been unusually large.