WOOL PRICES DOWN

Dominion, Volume 31, Issue 55, 29 November 1937, Page 12

WOOL PRICES DOWN

First Sale Of Season DROP OF 40 PER CENT. AT AUCKLAND Passings 65 To 70 Per Cent. ABSENCE OF JAPANESE COMPETITION ■By Telegraph—Press Association.- ' Auckland, November 28. A substantial decline in prices occurred at the first New Zealand wool sale of the 1937-38 season, which was held at Auckland on Saturday. Values dropped about 40 per cent, compared with those ruling at the first sale last year. Reserves were not reached in the majority oi cases and only 30 to 35 per cent of the total offering of 25,000 bales was sold at auction. The estimated return is about £l4 a bale. Though prices fell so steeply compared with the rates of a year before, most growers were pleasantly surprised that the drop was not even greater.The activity of Continental buyers, representing principally French and Belgian interests, and th-e demand of local mills for super halfbred lines saved the day. There was a marked absence of Japanese competition, which dominated the first sale last year, and was largely responsible for the phenomenal prices. The top price offered was 17d. for several lots of' fine halfbred wool, which were passed at this figure. Passings were exceptionally frequent, and the majority of bids fell substantially short of reserves, though a proportion of growers sold later by private treaty. The estimated average on the lower range of prices is 10d. a lb., compared with 14.225 d. a lb., and £2O/10/6 a bale at the opening sale last year, and 8.27 d. a lb. and £l2/2/- a bale at the beginning of the 1935-36 season. The ofiicial report states there was an offering of 2-5,000 bales. Approximately 30 to 35 per cent, was sold at auction, competition being fair within restricted limits. The Continent was the principal buyer, with local mills competing for super half-bred lipes. Hogget wools were shorter and finer than usual, being thus particularly suitable for Continental requirements, but did not command the usual premium. The sale proved better than brokers had first anticipated, due to tiie operations of Continental buyers. Compared with last season’s opening sale, prices generally show a reduction of about 40 per cent., although some lines show still a greater drop. The range of prices was as follows, November, 1936, prices, being shown for comparison:—

DROP CAUSES NO SURPRISE

Tanners’ Anxiety Before Sale RELIEF THAT FALL WAS NOT GREATER Dominion Special Service. Auckland, November 28. The lower prices for wool at the first Auckland sale on Saturday caused no surprise. Growers, brokers, buyers and mere spectators had all expected a decrease, and no body was optimistic enough to believe that, with the fall in London prices, there would be anything but a sharp decline at the first New Zealand sale of the new season. Those intimately connected with the trade, particularly growers, recalling wistfully the amazing values that ruled at the November sale last year, were unwilling to offer any forecasts before the sale commenced. The interfse interest taken in the results of the day’s selling was obvious, however, and the gallery was crowded long before buyers had taken their places. There was a particularly full bench of buyers. The excitement that had been unashamedly displayed a year before was missing.- Instead there was an air of tension and growing anxiety for a start to be made so that the fortune of those offering wool would be decided. Distinct signs of nervousness were apparent among farmers in the gallery and also among the majority of those on the selling-floor. Only the buyers seemed unaffected. The first lot comprised four bales of crossbred ewe wool, and bidding rose to 9Jd. The lot was sold, as was the next, but these were folio-wed by a long succession of passes, broken only by an occasional sale. The standard for the day had been fixed. Growers' Reaction. The reaction in the gallery was prompt. Rather surprisingly, relief was more obvious than distress. Growers accepted the turn of events philosophically, realising that while there was a sharp drop compared with the average of 14.225i1. paid last November, the price was still likely to be above that for the 1935-30 season, when Ute average was 8.27 d. a lb. Reserves had in some cases been set high, growers apparently counting on a continuation of the lucrative values of last

season. This did not apply in the majority of instances, however, but even with moderate reserves lot after lot was passed, buyers refusing to raise their bids, often to within 3d. or 4d. of growers’ estimates of values.

The lack of Japanese competition, indeed of any serious competition at all. was soon apparent. Continental representatives dominated the bidding and, with Japan and the United States uninterested, and Bradford offering prices well below expectations, they had matters very much their own way. French and Belgian buyers were to the fore throughout, and it was due solely to their activity, even though it was within strict limits, that the quantity sold under the hammer was not a great deal smaller. “It might have been worse, a great deal worse,” one broker said. “Wool prices soared last year, and few believed that they would remain at that level. Now they are down again, but in some quarters at least they had been expected to fall further. Thanks to Continental activity, the position is better than it might easily have been ”

Lack of Japanese Activity

A sale that offered growers more than many had expected was the general impression of brokers and buyers. There was some measure of surprise expressed at the lack of Japanese activity, but Bradford bidding had not been expected to be spirited, and Continental interest was keen enough to compensate in a measure for this aspect. Forebodings that prices were going to slump badly, not only compared with November rates of last year, but also with those of 1935-36 returns, had undoubtedly existed, and early signs of activity on the part of French and Belgian representatives were reassuring. Had Bradford been bidding, as occurred last November, when Japanese competition was so strong, prices would have been better for growers, but there was enough competition among the Continental firms to keep bidding fairly brisk. Two Japanese buyers sat in their places all day without offering a bid, though they kept a careful note of prices paid. Hopes that the recent trade agreement with Germany might result in some substantial orders were not fulfilled, and inquiries failed to reveal any representative entrusted with instructions to buy on behalf of either German or Italian interests. I hough il was pointed out that the nationality of the firm through which wool is bought is ho true indication of the country for which the purchase has been made. Reasons for the unwillingness of Bradford buyers io operate outside strict limits were suggested by one authority. He said the bulk of growers had fixed their reserves at London parity less the usual margin of Id., and that, since then, London values had fallen. Bradford representatives, apparently expecting a further decline, were endeavouring to keep the price down. Though prices were not high, bidding was consistent and fairly keen.

“The Continent is seeking fine short crossbreds, and it was a typical Continental display,” one buyer staled when asked to account for the unexpected activity of French and Belgian firms. “The reason for the absence of American bids is the improved wool season in the United States, but it is problematical why the Japanese are not buying. It must not be forgotten that they have a war on their hands.' Buyers commented favourably on the quality and style of the wool offering. They agreed that generally it was superior to the offering at the first sale last year, and that it was no fault of the clip that prices had dropped.

Early indications were’ that sales would not exceed 30 per cent, of tlie offerings. Subsequently. however, many growers sold by private treaty, and in some instances buyers paid slightly better prices than they had offerejl when the lots were under the hammer.

1937. 1936. d. d. d. d. Southdown A ... 11 to 12 18} to 20} Southdown B ... 9} to 10} 164 to 10 Halfbred, 56/58 — Extra super ... 15 to 16 — Super to la 23} to 26 Average 13 to 144 19 to 23 Ilalfbred, 50/u6 — 184 Super 13 to 14 17 to Average in to 12} 15 to 16} Inferior . 10 t< > 11 — Extra line crossbred, 48/oO— 164 Super 11 to 12 to 18 Average 10$ to 11 15 to 16} i Inferior 9 to 10 —— Fine crossbred, 46/48— Super 10} to 10} 16 to 17 Average 9} to 10 144 to 15} Inferior 8 to 9 — Medium crossbred, 44/46Super 10 to 101 16 to 17 Average 9 to 9} 134 to 10} Inferior 8 to 9 — Coarse crossbred, 40/44— Super 10 to 104 15 to 16 Average 9t to 9:! 134 to 14} Inferior 8} to 9 — Strong crossbred, 36/40— 15 Super ' .10 to 101 14 to Average 9.} to I 12 J to 13} Inferior 84 to — Hoggets— 11J 11 10.'. ."io/r>6 48/50 io to to 15j to to 2<Ji 11 46/48 9} to 104 14 to 16 Lambs— Down crossbred 12 to 134 Fine Medium — 14 121 to to lot 13i Seedy and 6 inferior — to 10 bellies and piecesCrossbred, good to 11 124 super 7} to 84 to Low to medium 6 to 7i 9 to 101 Ilalfbred. bellies and pieces 8 to 94 15 to 17 l.'r n I chings— Medium Io good 7 to 6| 11 to 12} Inferior to seedy o to 94 to 11 Locks, crossbred 44 to 0} 6 to 8} —