PRICE OF WOOL

Evening Post, Volume CXXIV, Issue 107, 2 November 1937, Page 12

PRICE OF WOOL

POLITICAL FACTORS

INFLUENCE ON THE MARKET

(From "The Post's" Representative.) LONDON, September 18.

■■"If ■a ■ few months ago, the average student of wool trade conditions had been asked to name the series of London sales likely to see, the best spot market values: of. the current calendar year, he would unhesitatingly havfnamsd tte'September sacs Bis argument would have been that the period immediately preceding the arrival of -the first of the new season's colonial/wools would naturally finda finetf-balanced supply situation in thi« country at its most acute point and that spot market.supplies would expect t^henefit from such a state of affairs, says the "Yorkshire Post," commenting on the fifth series of colonial wool sales in London this week. ■ >■ That is precisely the position, which exists at the moment, and the unusually strong statistical position .of ™oolin .this and most consuming countries-which has been the talk of the trade for some months—is .as yet entirely unrelieved by the arrived of the 1937-38 wools from overseas. Nevertheless, new and unexpected complicating factors have come over the wool trade, and few people would care to-suggest that London values this week' tffie September series) will be the besfof the. year, though they may: be .better than many people at the moment, anticipate. , AN UNSETTLED WORLD.

■ The root cause of present uncertainties in the wool trade can be diagnosed without much difficulty, for. it lies "chiefly in the unsettled state of international politics. As a world commodity, wool is potentially: capable of reacting to changes or disturbances of magnitude in.almost any corner of the globe. In recent years wool has demonstrated a remarkable capacity for withstanding successive disturbances in world affairs with a minimum of dislocation; but at the moment it is confronted with a formidable array of uncertain elements. Outstanding among them is the-state of \ war in the Far. East, which is popularly .supposed ■to be the main reason' Why Japan is, still absent from the 'Australian wool market; but in certain other countries and on the high-seas nearer home there are conditions far from. reassuring. . When account is also/ taken of the evident ■weakness of national finance m more than.one foreign country it is hardly surprising that wool should be feeling tfce effects. Nor is it the only commodity' which is experiencing ;certain reactiton. ; - - 'ENGLISH TRADE VIEW.

The1 majority of the wool-using trades ih: England' view, not without misgiving, the possibility that 1937-38 prices might maintain the highest levels of 1936-37, and it is not too much to suggest that any such course of events would have' created serious problems for. most sections of the trade/1"' ■ " '""'■':'' ";;};". ■ '• ■' " The trend'Of world events has decreed that, for the time being at any rate, the possibility need not seriously be -considered. ■. A sub-normal demand for the. staple from, certain countries has established a basis of world values: which has allowed the Bradford topmaking trade to discard the protective element > which has < characterised its quotations for some months. At the moment, a sober effort is in progress to establish a hew basis. .

The over-sanguine expectations ■of a" few' weeks ago have been set aside, and: it 'seems equally important that pessimism' should be avoided. To depart\from- the highest point does not necessari]y,mean that the lowest point is the. next stop, and the London sales have a valuable', opportunity .of giving' to the' industry as a whole, a sane guide :for the immediate future., A certain, modification in values df merinos, as compared with the last closing.rates,, seems, inevitable,- if London is .to fall into line with the world position, but the 'slight premium value usually ' associated with spot wools should enable London values to compare favdurably with anything now being- paid -overseas. ■ Fine crossbreds are expected -in • Bradford to ease a little ,in sympathy with merinos,. but there is doubt as tp whether the same tendency will be seen in medium and low crossbreds.

The next London series of sales begin November 16. The New Zealand sales begin at Auckland on November 27 "with a limit .of 25,000 bales;' Napier follows on December 3 with a limit of 28,000 bales; and Wellington on December 8, with a limit of 30,000 bales.