TRADE AND FINANCE

Evening Post, Volume CXXV, Issue 108, 10 May 1938, Page 14

TRADE AND FINANCE

PRODUCE & MARKET REPORTS FROM DAY TO DAY

NEW ZEALAND FLAX

STOUT COMPETITION

SISAL SITUATION

FAILURE OF CONTROL SCHEMES

"Evening Post," May 10. Recovery of the market for New Zealand flax (phormium tenax) is not yet in sight, and the High Commissioner's weekly market report, May 6, as cabled, does not foreshadow any improvement in the position. Export prices current in Wellington yesterday, and those quoted at this time last year, compare as follows:—

May 9, May 7, „ J 1938. 1937. Grade. Per ton. Per ton. High fair 17 10 0 29 10 0 Low fair .... 16 0 0 28 0 0 These prices are f.0.b.; those for May 9, 1938, in terms of sterling, and covering insurance and freight, are equal to £18 5s for high fair and £17 low.

Wigglesworth and Co., Ltd., fibre brokers, London, reporting on the position of New Zealand flax in the London market as at the close of March, stated, that "despite an increased subsidy from the Government, many mills are reported -to be closing down, being unable to. produce at a price which will compete with other fibres. Offers are scarce, and except for the sale of occasional parcels afloat, few transactions are recorded." Nominal values were given as follows:—Good fair, £21 per ton; high point fair, £19; fair, £17 10s; common, £16 10s; rejected, £15 10s; No. 3 tow, £12. Prices are c.i.f., London basis, April-May shipment. Incidentally values of East African sisal were quoted at the same time as follows:—No. 1, £17 10s. to £17 15s per ton; No. 2. £17 to £17 ss;. No. 3, £16 10s to £16 15s; c.i.f. European option at ports, according to standard and shipment position. THE BINDER TWINE DEMAND, i

. New Zealand hemp (phormium tenax) was and still is used for binder 'twine for harvesting and formerly considerable parcels of this .fibre were shipped to the United States for manufacture there for this specific purpose. The New Zealand fibre, however, appears to have been supplanted by sisal and other fibres in the manufacture of binder twine. . , But. African sisal is not having a much easier time in the fibre market than New Zealand flax, according to Mr. Alfred Wigglesworth.. He, it may be recalled, was in Wellington for the ..British, Empire Chambers of Commerce conference, and while in New Zealand went thoroughly into the flax industry at its point ,of productiori.' Mr. Wigglesworth has just reviewed "the sisal situation today," and he. shows that "the steep fall in the price of sisal is causing- great concern in East Africa and elsewhere." Until September (states Mr. Wigglesworth) all seemed rosy: for at £27 to £28 production showed a satisfactory return, and. the prospect of a prolonged period of prosperity seemed assured. Suddenly the picture changed, and now everyone is asking the reason for the transformation which has occurred." • After dealing with . statistics as an indication of "coming trouble," Mr.

Wigglesworth remarks that they have their limitations because of the diffii Gulty of obtaining statistics of consumption when it "swings from sisal to manila and vice versa according to price." High-priced other fibres may divert production into jute or into Indian hemps for various purposes. Spinners would be reluctant to make these changes, but competition might force ihem to do so, and "it is evident that % stable price is a formidable argument against, such substitution. This is an end desired by both producer and "consumer and should be the aim of all connected with the industry, but it requires stable demand which,, under existing conditions, is unattainable." The admission is made that East Africa has lost business to Javan sisal, that Africa must pay scrupulous attention to those points which count most with the spinner, whose requirements vary between bold fibre for binder "twine, and fine fibre, the finer „the better for small sizes of yard. The ■'importance of ■ high-class dependable ■•flualrtyv ' perfectly ■ decorticated, care-fully-graded :to length, and of good col;ou"r cannot be oyer-stressed." ; : ' THE AMERICAN SLUMP. . !• "After showing wtare'the bulk of the African sisal goes, the writer remarks 'that .the United' States is a most undependable factor, and being the •largest individual consumer her abstention from the market can upset completely the balance between production 'and consumption—and has done so" notably on the occasions of the slump of 1930-32, and the depression of 1937-38. ' , J , . ! The full capacity of binder twine production in the United States ]s estimated'at about 150,000 tons, and .in Canada about 45,000 tons. This, is pro-

bably half the total world production. The: consumption is most variable, and in recent, years has probably never reached-full capacity. Reference is made to the new factor, the "Corilbine" reaping machine, by the use of ■ which the use of twine is unnecessary. „ Mr. Wigglesworth holds that as loiig as. sisal has to depend so largely upon binder twine, it must be liable to fickle consumption and fluctuation in price. A remedy lies in the direction of diverting supplies into other The writer then passes to control of production, which he does not commend. He states: "It may be thought that production might be controlled so as to conform with consumption, and that this might be done as far as longrange control of new planting is concerned.- Control of this kind would require co-operation with the Netherlands East. Indies, and with Mexico." Further, in order to be successful it would have to be correlated to production of fibre from the Philippines, and to phormium, grown-in New Zealand. The idea is not new, for an international meeting was held in London in June, 1935, during the height of the last depression, and was attended by delegates from Mexico, the Philippine Islands, Netherlands East Indies, Kenya, Tanganyika, New Zealand, and Mauritius.

EXAMPLES OF CONTROL. "Common agreement was reached that it was desirable to do something to control production," remarked Mr. Wigglesworth, "but before tangible steps in any direction could be taken the market awoke from its slumber, stretched itself, and rose to a figure that satisfied producers. Consequently, no further interest was shown in the scheme." He asks: "Is it feasible to direct and control the planting programmes and production of these widely scattered regions with sufficient skill to make production exactly meet consumption? Can it be done for any commodity, and what example lies before us?" The example of Brazil is given, with its 54,000,000 bags of coffee deliberately destroyed, and the consequential complete unbalancing of the currency and economic position of that countr-y. Eegulation of rubber had been more successful, but rubber had had its vicissitudes. Tea control had been suc-

cessful; and output of tin can be re-

STOCK EXCHANGE

FACES CURRENCY PROBLEMS

PRICE RECOVERS

AUSTRALIAN LONDON LOAN

(By Telegraph—Press Assn.—Copyright.) (Received May 10, 9 a.m.) • LONDON, May 9. Scrip in the new Australian loan for £7,000,000, of which 60 per cent, was left with the underwriters, has recovered by 3/16ths to 9/lGths discount.

The loan opened at a discount of J per cent, and fell to 1 per cent. The issue price was £99 and the rate of interest 3J per cent., the yield on redemption being £3 16s 6d per cent. The term of the loan was 1952-56.

GENERALLY STEADY

AUSTRALIAN INVESTMENTS

(By Telegraph—Press Assn.—Copyright.) SYDNEY, May 9. Several leading industrials gained strength on the Sydney Stock Exchange today. Tooth's shares were at the best point of the year. There was also a good demand for shipping shares. Base metal issues, however, were quiet.

Sales included:— £ s. d. Bank of New South Wales 32 12 6 Comm. Bank. Co. of Sydney 21 1 0 Queensland National Bank . 5 3 0 Union Bank 9 0 0 Colonial Sugar 50 0 0 Burns, Philp 2 13 6 Burns, Philp (South Sea) N.Z. delivery 1 7 6 Berlei, Ltd 2 1 0 Tooth and Co 2 18 0 British Tobacco (pref.) 1 11 0 G. J. Coles 4 1 6 Australian Glass 4 15 0 Dunlop-Perdriau 1 2 6 Farmers „.. 112 6 David Jones 2 1 0 General Industries 0 19 4| James Stedman Sweets ..... 015 6 Felt and Textiles 1 13 3 Mauri Bros 3 8 9 Goldsbrough, Mort 1 10 9 Wilcox Mofflin 0 8 8 Henry Jones Co-op 2 9 9 Traders' Finance 1 0 104 Standard Cement 1 0 0 Mount Morgan 0 9 0 Mount Lyell 1 7 1§ Broken Hill South 1 10 10£ Rawang Tin 0 8 10 Tongkah Harbour Tin 0 10 7j Taranaki Oil 0 8 0 MELBOURNE, May 9. On the Stock Exchange of Melbourne today the markets were generally steady, but quiet. Sales included:— £ s. d. Comm. Bank of Aust 0 16 7. Nat. Bank of Aust. (£5) 7 10 6 Bank of Australasia ...... 10 0 0 Australian Paper Mfrs. (pref.) 1 5 6 G. J. Coles 4 1 0 Australian Iron and Steel ' (pref.) 1 7 9 Dunlop-Perdriau 1 2 6 Cox Bros ' 0 16 0 "Herald and Weekly Times" 219 6 Australian Foundation Investment Trust 0 4 5 Mount Lyell 1 7 0 Broken Hill Pty 3 1 9 Broken Hill Pty., new issue Ll7 6 Loloma Mines 1 2 4J

PRICE AND RETURN

Latest sales reported and made on the Stock Exchanges of the Dominion, with the highest prices and the approximate yields per cent, per annum to investors (all subject to appropriate taxes and exchanges where operative), based on last year's distributions, and considering redemption and brokerage in the case of redeemable securities where dated, were as follows:—

Highest Yield price. p.c.,p.a. £ s. d. £ s. d.

stricted; but the fact has not ensured a stable price. "But sisal must be cut with clock-like regularity if the life of the plant is to be maintained at its optimum."

The price of sisal, as with New Zealand flax, has gone the way of the market for many other commodities. Those markets have been depressed by the great'reduction in the purchasing power of the United States. Recovery in that country, it is believed, will mean recovery of commodity prices in general, including those of fibres such as sisal, New Zealand hemp, and manila.

(By Telegraph—Press Assn.—Copyright.) [ (Received May 10, 10 a.m.) LONDON, May 9. Continental currency problems are restricting business on the London Stock Exchange,

Wellington. Nat. Bank of N.Z. o.s. 2 14 0 3 14 0 t Goldsbrough, Mort .. 1 10 6 5 4 11 ■ British Tobacco 2 8 0 43 4 ; Broken Hill Pty 3 0 9 4 '2 3 Consolid. Brick 0 8 10 2 16 7 i Electro. Zinc (pref.) 2 6 0 7 32 2 Felt and Textiles 1 12 9 6 2 1 : Hume Pipe 0 18 10 6 7 5 N.Z; Drug 3 7 0 4 15 6 Taranaki Oil 0 7 9 — Woohvorths, Ltd., first pref 2 1 7 4 16 2 Woohvorths (rights) .0 3 6 — Mount Lyell \ 1 6 2 — Auckland. Inscr. Stock, 4 p.c., 15/6/1952-55 ......a. 104 7 6 3 14 8 [nscr. Stock, 3hi p.c., 15/3/1939-43 . ...*a. 99 17 6 3 10 3 Inscr. Stock, 3% p.c., 15/11/1938-52 ... ,*a. 103 7 6 3 8 5 Auckland Power Bd., 4% p.c., 30/4/1945 a. 103 0 0 — Bank of N.S.W u. 31 15 0 3 15 7 Bank of N.Z 247 498 Australian Glass 4 15 0 3 3 1 Broken Hill Pty 3 0 9 4 2 3 G. J. Coles 4 0 8 4 13 0 Eenry Jones 2 9 6 4 0 9 Mort's Dock 0 10 6 , 7 12 4 Mount Lyell 16 4 — Mount Morgan 0 8 9 — Christchurch. Bank of A'asia l.s. 9 19 0 4 0 4 Nat. Bank of N.Z. o.s. 2 14 0 3 14 0 Dalgety and Co. 8 8 0 4 15 2 Goldsbrough, Mort ... 1 10 6 5 4 11 N.Z. Befrig. (10s pd.) 0 8 4 6 12 0 Felt and Textiles .. 1 12 9 6 2 1 Tooth and Co 2 16 9 3 14 0 Broken Hill Pty 3 0 9 4 2 3 Broken Hill Pty. (contr.) 1 16 9 — G. J. Coles 4 1 0 4 12 7 YVestport Coal 1 4 0 4 3 4 Woohvorths, Ltd. (ord.) 1 2 4 3 7 1 Woohvorths, Ltd. (rights) 0 3 5 — Wool worths (South Africa) 0 15 6 — Mount Morgan ...... 0 8 8 — Mount Lyell 1 6 7 — Dunedin. Inscr. Stock, 3% p.c., 1938-52 a. 103 7 6 3 8 5 N.Z. Paper Mills 1 5 0 5 12 0 N.Z. Paper Mills (rights) 0 2 6 — Taranaki Oil 0 7 5 — Woohvorths, Ltd. (ord.) 1 2 4 3 7 1 Woolworths, Ltd. (rights) 0 3 7 — Nokomai Gold 0 17 — * —On the expiry of the tax free period the interest rate will be adjusted automatically. a.—Market price includes accrued interest but not brokerage. 1.—Less English income tax. o.—Free of English income tax. ( s.—Paid in sterling. u.—In Australian currency.