YORKSHIRE LETTER

Dominion, Volume 14, Issue 246, 12 July 1921, Page 7

YORKSHIRE LETTER

LARGE STOCKS AND SMALL CONSUMPTION From Our Special Correspondent. Bradford, May 5. The trade entered upon another series of colonial sales last Tuesday, when tho usual Home and Continental buyers put in an appearance, Coleman Street M 00l Exchange being fairly well crowded. Practically no American buyers were present, mid none were expected. America seems to have had her fill of colonial wool, and the next move will lie to get her machinery running, and shift the imported raw material. With America silent in all distributing) markets, we are now able fully to estimate the strength of the buying movement on Home and Continental account, and the position may bo regarded as very satisfactory. Prices went in favour of the seller, greasy merinos being about 10 per cent, dearer, fine and medium crossbreds 7| to 10 per cent., and low crossbreds 5 per cent. What colonial pastoralists aro wanting most is to see merinos advance 25 per cent, and crossbreds 50 per cent, to bring the raw material on to a paying basis. When one considers the extra expense incurred in production, even merinos are sensibly below pre-war prices. Many in consuming centres forget this important fact, the majority failing to realise that all expenses on the stations have more than doubled since August, 1911. This means that every pound of wool being grown in Australia and New Zealand is to-day costing something like 75 per cent, above pre-war times, and some assert quite 100 per cent. A Quickened Demand. There aro available this series 40,000 bales of B.A.W.R.A. wool and 37,000 bales of "free" wool, quite sufficient to make a respectable show. The catalogues so far have presented a very good selection of both merinos and crossbreds, though tho latter are likely to be rather limited. It is patent that some rather serious differences have arisen in London between importers and B.A.W.R.A. in regal'd to the offerings, while the trade are strongly disposed to let B.A.W.R.A. wool take care of itself. All is not going well with the held-over quantity of old wool, and the directors of B.A.W.R.A. have only themselves to thank for the position in which they find themselves. Conditions to-day are exactly what Mr. Harry Dawson foretold some two or threo months ago, when in a speech delivered at Huddersfield he said there was going to be a mess-up in the wool trade. 'I hings might have been more harmonious if the directors of B.A.W.R.A. had not tried to rule the trade, and at last they must realise that their tactics have cost them dearly. It is utterly useless for the directors of B.A.W.R.A. to think that they aro going to dictate a policy to the trade and compel competition for old wool at higher values than those ruling for "free*' new wool. It is like offering old milk instead of new, for wool loses its bloom after a certain length of time, and as B.A.W.R.A. wools have been very much “creamed" by the best combing descriptions being sold, buyers aro certain to uso their discretion in valuing what is left. The same cannot bo said for new clip wools, and the demand for these is better than expected. The opening day revealed many pronounced needs on the part of buyers; in fact, Bradford’ topmakerz wer6 never so bare of stocks of merino tops, thanks to the heavy shipments made across the Atlantic during the past three months. In fact, there aro firms to-day in Bradford who are still shipping tops to New York for all they aro worth, and there is every prospect of a quickened demand for the raw material throughout the current series. We shall be very greatly surprised if tho call for wool is not a developing one; in fact, the position of many topmakers compels them to buy in order to cover their needs. The improved opening values compared with tho close of the previous series stands out in marked contrast to many previous series when sensible declines followed in quick succession, and it is to bo hoped that tho initial advance will be maintained to the finish. B.A.W.R.A.’s Troubles.

Some very important cables have come from Australia since we last wrote, all of which indicated that both growers and B.A.W.R.A. have got "the wind up." Mr. Hughes says that there is a "mountain of surplus wool, tremblingi on the edge of a precipice, which threatens to fall and utterly crush tho industry.” That figure of speech no doubt is correct, and Mr. Hughes apparently is concerned that this mountain of wool cannot be sold on a basis of 14s. for merino tops, the same as twelve months ago. If merino tops had not soared to that giady height the present slump would never have come, and' there certainly is room lor serious concern over the position of the raw material. There is in stock 4,500,000 bales of wool, a new clip is beginning to be shorn in Australia, and by the end of the year there will bo nt least 6,500,000 bales in sight of colonial wool alone, if the present measure of consumption does not undergo a very great change. There is, therefore, no wopder at grave concern being expressed in Australasian wool circles, and equal concern at this end in knowing how to bring about an improvement, both in demand end prices. The Australian Prime Minister suggests a remedy, namely, keeping B.A.W.R.A. wool off tho market entirely for the next two years. A good deal can ba said both for and against this. This wool has cost British taxpayers something like .£56,000.(XX1, and there are those who arc demanding that it be offered for sale regardless of what it realises. That is not the view of the writer. Those who advocate offering big weights of wool have never participated in (he practical side of the trade. The writer f as contended all along that there is sufficient raw material, both merinos and crossbreds, of the current Australian and New Zealand clip to satisfy mH present and prospective consumptive needs. If no regard is paid to the consumptive state of trade, and what users require to keep the present restricted machinery running, then values will slump still more. On the other hand, the only safe policy for B.A.W.R.A. is either to remove (heir stocks entirely off the market until trade revives, or else be prepared to sell their offerings at a market price, bill it must be clearly understood that il will 'bo very unwise to offer more than the trade can reasonably absorb. Some writers have not yet realised the real cause of the present trouble in tho wool world, namely, tho very restricted consumption, which is no more'than onethird of normal. It would be tho height of folly to ask the trade to absorb unlimited .supplies of raw material; in fact, users have not. the capital to-day to do anything of the kind, simply bccauso of the colossal losses which have taken place in consequence of tho great slump in stocks which hnve been carried by everyone from the topmaker to the manufacturer. More Export Trade Wanted. Though there has recently been some improvement in the sales of crossbred tops to tho Continent, there is still considerable room for improvement in this direction. Tho prices accepted have been exceedingly reasonable, due largely, no doubt, to the fact that Continental firms are able to compete on a. very low basis. Bradford houses are being severely hit 1»y tho low cost of combing on tho Continent, exporters of noils finding that they are quite unable to sell at sufficiently low figure-.? to compete with the noils which nro being produced by tho Continental firms. Before, tho war large quantities of noils wero bought In this country by Italian hatting firms, but today they arc supplying their needs on tho Continent. Tho only profitable outlet for noils and other by-products during

recent months has been the United States. This business has been of a somewhat uncertain character owing to tho probability of the new Emergency Tariff Bill coining into force at any moment, but while it has lasted it has been useful in helping to reduce stocks.