WOOL MARKET

Evening Post, Volume CXXV, Issue 92, 20 April 1938, Page 12

WOOL MARKET

DEMAND AND SUPPLY

GERMANY AND JAPAN

Winchcombe, Carson, Ltd;, Sydney, April 12, report:—lf owners with wool in store unsold meet the market the quantity carried over at June 30 should not be excessive. Judging by cable reports from Japan buying on that account is likely to cdntinue. Despite the extended use of blends with staple fibre, the wool so far purchased is insufficient for requirements. The South African clip for the current selling year is now estimated to be 230,000,0001b or the equivalent of 766,000 bales of Australian weight. That is' a decrease of 15 per cent, on the 1936-37 quantity. Drought has decreased African production 30 per cent, since the peak point of 1932-33. It is considered that the effects of the droughty conditions in 1937 will be most evident in the quantity available during the coming season. As in Australia the rate of wool selling in South Africa this season has been much slower than a year previously. Our Port Elizabeth correspondents advise that on February 28 the quantity of unsold wool in African warehouses was 86,529 bales, being three times the total at the similar date of 1937. Considerable quantities of short wools were anticipated to arrive during the subsequent four months. Larger quantities of the staple of less than normal length are being shorn in Australia. 'The lack of supplies" of. good-length -..wools is responsible ; for, the relatively keen .demand which.has prevailed' for them/ ' * . Japan has not only been buying wool in Australia but has also purchased limited supplies in South Africa. Germany has been a great factor on African markets. A trading agreement was originally made with the Government for the purchase of wool to the value of £3,200,000 in African currency. An-arrangement for a further £600 000 has been made bringing the total to nearly £4,000,000. Up to the end of January, Germany was' easily the season's largest operator in Africa. The experience with Germany in Australia and Africa this season shows how price attracts trade. Only a certain amount of money is available for German wool imports and larger quantities can be bought than a year ago when prices were higher. Better values would have been relished by growers, but, the. figures . which, have have facilitated" the sale of the clip. If the Continent had not been able to lift larger supplies this season, the heavy stocks of -wool, on hand, would have' probably 'embarrassed' the market. . The new season is so far ahead and world conditions are too uncertain to form a worth-while opinion on the pijpbable values which will prevail. But a reduction in the size of the Australian and African clips is probable. That position should helpful from the selling viewpoint particularly in regard to offerings showing attractive length. Much will depend upon the circumstances obtaining; in the United Stales. Industrial activity in that country is an influential factor on world 'markets generally. Lack of life in American business has been one of the chief causes of the lower commodity prices experienced during the past twelve months.