PRICES UP

Evening Post, Volume CXI, Issue 39, 16 February 1931, Page 12

PRICES UP

OUTLOOK UNCERTAIN'

(From "The Post's" Representative.) SYDNEY, 4th February. Although there has been a distinct ■ recovery in wool prices at Australian sales during the last few days, it is too early yet to become excited about it. Still, there has beeu an important widening in the demand, and a measurable improvement in prices-up to 10 per emit, at the Sydney sales last Monday—and together these two factors have created no small measure of interest and hope, which is bound to be reflected in New Zealand. At the. same time it must be remembered that the trade has bitter recollections oC price recoveries during the past three yearn, all proving but a flash in the pan, which also served to accentuate the subsequent losses. Therefore it is natural that the present improvement, although most wholeheartedly welcomed, should be viewed, with some suspicion. There is a general inclination to postpone rejoicings and to wait until the Tisc is more fully confirmed. A Melbourne authority, reviewing the position, said: "Without wishing to look too closely into the mouth of what may prove to be a gift horse, one cannot help but observe that the better tone in the wool market has not been preluded by any of the usual signs, such as improvement in the general trade of the world, or an upward move in commodity prices. On the contrary, the general price levels of commodities still tends downwards, which is a bad sign; and, further than this, the news from wool manufacturing centres in Europe is still couched in pessimistic terms. On the other hand, however, there are factors which, though less tangible than price levels and bad trade returns, are working none the less surely towards an improvement in trade. Chief among these are the accumulating evidence of a concerted effort by international bankers to set the ship of trade afloat again, and a growing conviction that the cycle of depression must, by all the laws of economics, just about have run its course."

The effect of the curtailment of the London sales was immediately noticeable in Australia, for competition became more general and more keen almost at once. Of course, the movement in exchange rates camouflaged-to some extent-the rise in the market; that is to say the true market as apart from the vagaries of the exchange. This makes the actual quotation both difficult and dangerous. There can, however, be no gainsaying the fact that tlie : market -generally has improved and that there are still signs of an upward tendency. This is borne out by the more general demand from France, Germany, and the United States, and finally England. The most pleasing feature of the competition has been the fact that the greater part if not the whole of its improvement is obviously due to a genuine machine demand, as distinguished from the demand purely for exchange purposes, which, for months, has been the dominating featu& of the market.