MOUNTING WOOL PRICES
VIEWS OF AUSTRALIAN ECONOMISTS CURRENCY REVALUATION AGAIN MENTIONED (N.Z. Press Association—Copyright) (Rec. 7.30 p.m.) SYDNEY, Jan. 31. Mounting wool prices, without any indication of a slump in demand, are beginning to cause embarrassment to Australian economists, who feel they will destroy the operation of the system of normal checks and balances. Recent Australian sales have shown advances of well over 25 per cent, on previous offerings, which themselves were disposed of at record levels. Last week’s prices at the opening London sales were 15 to 25 per cent, above last year’s closing values. It is now expected that growers’ cheques for the season will total £250,000,000, or about £52,000,000 more than last year’s figure. Many economists believe that the result will be inflation and that, the only method of counteracting its undesirable effects is for the Government to step in with some drastic scheme. Businessmen, bankers, and industrialists claim that now is a more favourable time, even than last September, for revaluation of the Australian pound. They say that primary producers could not well begrudge this step which would extend favours now enjoyed exclusively by them to other branches of the community. The Federal president of the Australian Primary Producers’ Union, Mr W. P. MeAnaney, said recently that farmers generally might accept a limited degree ot movement in the value of the Australian pound towards parity with sterling, provided certain safeguards were observed. His system of safeguard, which includes the binding of unions to the present wage rates and quick return to the present ratio on the collapse of export prices, is not acceptable to industrialists, who are pleased, however, that- at least one farmer is not unequivocally opposed to revaluation.
Prices May Go Higher In spite of the fact that Joint Organisation has reduced its holdings of war-time clips from 10,407,0001 b in July. 1945, to just over 1,000,0001 b at the end of last year, prices continue to mount. World consumption in the current season is estimated at 500,000,0001 b above production. Many limiting factors have failed to affect Australia’s dominant position as regards fine Merino wools, and in spite of some English and American reports, wooibrokers say that prices must go still higher! The “Sydney Herald’s” financial editor scouts suggestions that the recent demand has been stimulated by currency considerations, but suggests that some woolbuying may be in anticipation of the appreciation of the Australian pound which at the present rate tends to subsidise exports.
“It will be remembered,” he says, "that woolgrowers lost nothing by the appreciation of New Zealand currency as higher amounts of overseas currency were paid to offset the change in rate.”
The main embarrassment, according to economists, is that London balances cannot be used to buy American-made goods which are urgently required to increase local production. It is suggested that the Australian authorities will await the result of the British election before completing dollar loan or revaluation policies.
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Press, Volume LXXXVI, Issue 26026, 1 February 1950, Page 6
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489MOUNTING WOOL PRICES Press, Volume LXXXVI, Issue 26026, 1 February 1950, Page 6
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