WOOL SEASON OPENING

Press, Volume XCVII, Issue 28699, 24 September 1958, Page 17

WOOL SEASON OPENING

“Steady Rather Than Sensational”

The Commonwealth wool marketing season has opened on a steady rather than a sensational note, with good clearances both in Australia and South Africa at prices slightly below those ruling at the close of last season, says a Bedford renort quoted by the New Zealand Wool Board. Aggregate demand has so far proved rather better than many had dared to expect and an encouraging feature of the sales has been the widespread nature of the competition. Practically all the principal manufacturing countries, with the possible exception of the United States, have been represented in the bidding and the first fornight’s sales in Australia in particular reflected the need of many Importers to buv wool for early shipment. An opening of such as this gives cause for' reasonable satisfaction because of the fact that conditions in most wool textile manufacturing countries still leave something to be desired. Reliable signs of an upward turn in world wool consumption are still awaited, and perhaps the most encouraging message conveved by world wool statistics is that the rate of decline in consumption has been considerably slowed down in the last few months, although the downward trend has still to be reversed.

If the first half of this year is contrasted with the corresponding period of 1957, when world consumption was at some of the highest levels since the war, the decline is in the neighbourhood of 17 per cent., but most of this drop occurred in the latter part of last year, and the much slower rate of decline during 1958 encourages the hope that the most severe phase of the recession is now in the past, and that better times may be on the way. As July and August cover annual summer vacation periods in the Northern Hemisphere, some little time must yet elapse before the post-holiday pattern of industrial activity begins to emerge, but it may be that this will be available before the New Zealand wool marketing season opens late in October.

Meanwhile, it is noteworthy that the financial and economic policv of the United Kingdom—which country buys more of the world’s wool than any other nation—is now directed to industrial expansion. Twelve months ago anti-inflation measures included a high bank rate and severe restrictions on commercial credits. Investigation has shown that these United Kingdom measures were a negligible influence on world wool market conditions in 1957-58, where prices reacted to an almost world-wide fall in use of the commodity, but the removal of these restrictions clearly paves the way for greater British freedom in wool market operations as soon as conditions warrant. Stocks of crossbred wool in the United Kingdom at recent date are officially estimated at 137 m lb (clean), about 6m lb lower than a year earlier. Most of this reduction Ls due to .partial liquidation of the government’s Stockpile of imported wool in recent months, and stocks in trade hands are understdod to show little change compared with last year. These latter are bv no means excessive for bridging the gap which must still elapse before the new season’s New Zealand crossbreds can reach Britain in, any substantial quantity. This cannot be much before the end of the year, and crossbred tops in the Bradford market are maintaining their price relatively better than other sorts.