THE WORLD’S WOOL

Dominion, Volume 29, Issue 220, 13 June 1936, Page 8

THE WORLD’S WOOL

United Kingdom Maintains Her Trading Position

FIGURES OF SUPPLY AND CONSUMPTION

“World Consumption Of Wool 1928-35,'' an analysis of consumption and trade In wool, published for the Imperial Economic Committee.

New Zealand’s annual production of wool, which fluctuates between 270 and 300 million pounds, is under onethirteenth of the world’s total production. Australia’s clip is over three times and sometimes four times as big as ours, and amounts to over it quarter of the world’s total production. Between them, Australia and New Zealand produce more wool than is produced in the whole of North and South America, Europe, Africa, or Asia. The figures are:— WORLD’S WOOL PRODUCTION, 1934-35. In millions. Percentage lb. of total.

The largest producing countries in order arc: Australia, the United States Argentina, South Africa and New Zealand, Russia. In practically none of these areas except the United States is there any extensive manufacture of woollen goods (New Zealand uses only 24 per cent, of her wool clip in internal manufacture). The chief countries requiring wool for manufacture are, in order of importance: the United Kingdom, the United States, France, Germany, Russia, Italy and Japan. It Is easy to see from these facts the very large part wool plays in international trade as it flows from the first to the second group of countries mentioned above for manufacture, and then back again to the first group in the form of manufactured woollen goods. This flow of trade has been profoundly modified in recent years. Wool production has remained fairly constant and low depression prices have enabled the whole wool crop to be absorbed without accumulating stocks, with the result that imports of raw wool into manufacturing countries have been well maintained. But foreign trade in finished woollen goods has fallen enormously; exports of finished woollen tissues for clothing pur poses from the 10 chief exporting coun tries (exclusive of Japan, whose exports are given in square yards) aggregated 2371 million pounds In 1928 and in 1935 they had fallen to about 103 million pounds. This fall was largely due to the rise of local manufactures in countries that had previously Imported heavily, mainly Japan, Canada, Argentina, Australia, India and China. Naturally those countries most specialised for export suffered severely. Germany has shown a fall of 75 per cent, and France and Czechoslovakia of more than 80 per cent. Belgium also suffered severely, but Italy’s exports were well maintained until 1935. Stringent import control has considerably reduced German and Italian wool consumption and is resulting in the increased use of wool substitutes and mixtures with other fibres and recovered wool. The fall In German manufacture has been brought home to us by the disappearance of German buyers from recent wool sales in this country. Tlie United Kingdom and Japan. During the same period exports from the United Kingdom fell by about 37 per cent., reaching their lowest point in 1932, and rising thereafter. Despite this fall, the United Kingdom has improved her position relatively to her rivals, and in 1935 she provided over one-third of the exports of half-finished products from the chief manufacturing countries and nearly 60 per cent, of the total exports of wool clothing tissues. Of the total world wool trade, the United Kingdom’s share rose from 14 per cent, in 1928 to 19 per cent, in 1932, and lias since risen Slightly. Since 1930 the United Kingdom has taken first place from the United States, whose share fell from 17 per cent, in 1928 to 14 per cent, in 1932. but rose again io 17 per cent, in 1934. Japan has shown a much more rapid advance, though as yet the size of her woollen industry is not very great. She ranks seventh country in order of importance, but her exports of finished cloth in 1935 (21 million square yards) were about eight times as large as in 1928. The increased Japanese production has been absorbed almost entirely in the East, particularly China and Japan, where a fashion change has brought wool into increasing popularity. Samples of their cloth received in New Zealand have been far too light to compete with British manufactures and suitable only for hotter climates.

As a summary of the general trend it may be stated that low prices have maintained consumption at its previous level. Supplies have been provided by the continued activity of of tlie United Kingdom (which uses about one-fifth of the total world production of wool), and a heavy fall in manufadluring in the other big European countries that formerly did much of this trade has been balanced by a rise of manufacturing in Australia, South America anil the East. The increasing use of wool substitutes in Germany and Italy has been counteracted by the rapidly increasing ]>opularity of light Japanese woolion goods in the "East.

Except during the exigencies of war, the chief primary markets for wool entering world trade have been virtually free from efforts to control prices ami supplies. There has been no general effort to prop up a falling market, and though this has given depression a free hand in forcing prices down, it has prevented any unhealthy accumulation of stocks such as proved so disastrous to wheat and other similar commodities.

Advantage Over Competing Fabrics Low prices give wool an advantage over the cheaper fibres .that compete with it, and tend to encourage the use of a greater proportion of wool in mixed fabrics, and for this reason the consumption and price o' wool are better maintained in times of depression than those of textile fibres in general. Similarly, when prices fall, an increased proportion of finer wools is used. Thus finer wool has a steadier price and fluctuations bear most heavily on the coarser wools than New Zealand mainly produces. For the medium crossbred (44/46’s) that is New Zealand’s staple, the price reached 25d. a pound in London in 1928, but fell throughout 1929 till toward the end of the year it stood below 20d. a pound. Thereafter the decline became more rapid till it reached its lowest point, below 7d. a pound in early 1933, and started to climb back to lid. near the end of 1935. Finer wools had reached their lowest point early in 1931, and have been gradually rising since that date.

Australia and New Zealand North and South America Europe (Including U.S.S.R.) Atiia 1,200.0 1,072.9 631.6 338.U 324.7 35.3 20.3 17.3 8'5 Total 3,680.8 100.0