WOOL SLUMP

Evening Post, Volume CIX, Issue 116, 20 May 1925, Page 5

WOOL SLUMP

EFFECT ON AUSTRALIA

REVIVAL OF BAWRA MOOTED

PROSPECTS FOR FUTURE.

(FROM OUR OWN CORRESPONDENT.}

SYDNEY, 15th. May.

Upon the prosperity of its wool industry Australia depends to, a greater extent, perhaps, than,any other country depends on any one industry. A bad wool clip is immediately reflected iii all other trades and industries. General prosperity follows a good one. Therefore the slump in wool values' since the beginning,of. the year. has. had. an important effect on this country's finance and commerce. .So great has been the interest created that the return to the gold standard and the State .electioneering campaign, have been jostled out of position.^ Many view the situation with alarm, Bat. the remainder is divided feev tweeh a certain feeling of uneasiness and a wonderment as to what all the fuss is about. . ■ .. : .'....

The value of our exported wool has increased, from £25,500,000. in 1913-14 to over £57,000,000 in 1922-23, the last year lor which complete figures are available. Last year's and.this year's totals will both' be considerably higher. In contrast with the large increase in value, there has been only a 20 pel- cent, -increase in the quantity of wool. The chief, factor in the increased total value has beeii the advance in. the average price front lOd per lb to' Is 6d (twb years ago). During the present wool season, in November- arid December last, the. aye'rage-price reached as high as 2b 4£d pel- lb.; -There was^a particular demand then : fbr the higher quality wools; and this, coupled with speculative buying; made for a high average. Since the, beginning: of the yfear; prices have slumped .'so badly that all the Australian series have been postponed until at least July to give the market ah 6ppbrturiity to recover. The discdiitiniiance of the sales means that the banks which have advanced money against this wool will require to keep their money locked up in this way for' some considerable time yet, instead of having it available for other purposes. Unless the remainder of the clip, about a quarter of the whole, is cleaned when sales are resumed,. there will be a carry-over of wool t6 next season;. aiia next season's clip is expected to be larger than the current one.

The problem facing the industry, then, is how to get rid of curi-eiit .slocks without "sacrificing theni on a falling market, and hbw to keep that market at its present level, if. riot at a Higher level. The suggestion of a.revival pf the.operations of Bawra has been mooted; but unless £anic replaces the present, uncertainty this suggestion is not likely to be widely supported. -A Sydney man who has been associated with, the wool-sell-ing trade for 60 years, Jias offered a sohv tion of the problem. ,Hfe. advocates that tlie' grower should indicate to the world that he is not in accord with any wob) control or , attempt to, stabilise prices. Once tliat is done he thinks the retiirD to normal conditions cail be gradually offepted. He declares that tlie interests of the wool-seller and wool-buyer are closely, interwoven, and prie depends upon the 'other, for satisfactory and payable results; He points but that. this year's curry-overi will be 550,000 bales. By the cud pf th 6 year, 1,500,000 bales will be available from.the new clip'; and the balance of theclip tb 30th Junbj 1926, will be 50a,q0b bale's; without alldwiiig for afly increase. It will take the best brains, he avers; to clear this quantity of 2,550,000. bales, and "best brains" call 'blily.be obtained by sellers and buyers -working harmoniously, together: If this is done;, ho believes; thei-'o ileed be iio fear that the grower will hot receive a fair aiid profitable price for his commodity.