BENEFITING BY EXCHANGE

Evening Post, Volume CIX, Issue 124, 28 May 1930, Page 14

BENEFITING BY EXCHANGE

'The present exchange position of Australia and New Zealand on London has sbmo bearing on the present improvement, mi the tone-'of the wool market. Ihe sub-1 ject has been gone into by Messrs. Winchcombe, Carson, Ltd., woolbrokers, Sydney, who show that the millman abroad remitting funds for the purchase of wool at present only requires to lodge approximately £94 at the London banks to secure a credit of; £100 in Australia or £93 10s, plus cost oi'cabling. In the case!of business in .New Zealand, the amount required-is £95. That situation actually means that the buyers can pay V2d per 1b more for greasy wool on the market than would be possible were exchange rates normal. Fortunately demand for the staple is so" keen that strong bidding results in growers securing that Vad produced by the current special financial circumstances. Australian funds are short -in London.. . To discourage calls being made-beyond the resources of their London funds, the financial authorities must make an. abnormal charge on those desiring totransfer money from Australia to- the British Isles. The situation is caused byihe inescapable law of supply and demand.' Money, like wool or any other commodity, becomes relatively cheap ■when it is plentiful, and dear when it is scarce. Wool is now definitely selling at prices above pre-war-basis. Actually wellcrown wools of the finer classes have at all times realise-d figures above 1014 levels, but inferior wools were some time ago selling at rates below that basis. Messrs. Winchcombe, Carson, Ltd., report that recent Sydney catalogues have averaged £14 7s 5d per bale,-or ll^d per Ib. The average for the Sydney market in 1911-12 was £11 19s per bale, 1912-13 £13 13s Id, and 1913-14 £13 6s 3d. The Sydney average for this season to 30th April was £13 12s lid. Prospects for a continuance of the more buoyant tone latterly experienced are decidedly favourable.