TRADE ITEMS

Evening Star, Issue 18044, 11 August 1922, Page 8

TRADE ITEMS

RATHER DULL MARKETS. The reciprocal trade ' tariff between Australia, and New Zealand has now been ratified unaltered l by the Lower Houses of both Parliaments, and presumably »s passage through the Upper Houses will bo «, formality, because of their constitutional inability to alter measures of sueh a nature. Its operation will date from the simultaneous proclamation by the respective Governors-General. Locally merchants appear sceptical of Mr Rodgers’s statement in the Federal Parliament that so many orders from New Zealand had been placed with Australian firms, contingent on the lowering of tariff barriers, that special snipping arrangements would have to be mad© for delivery. , , , ; 0n the other hand, ono has yet to hear of Australian orders being placed in New Zealand. So far from an out et being created for the surplus oats of the South Island, the new tariff appears likely to bring Victorian and Tasmanian oats into competition with ours in the North Maim market. Australia, has made no alteration in her former duly of Is od pei cental; while New Zealand has reduced her dutv from 2s to Is 6d. Rumors were current* yesterday of' buying activity m the Gore district at up to 2s 3d per bushel on tracks for A grade; but definite confirmation was being awaited. Earlier m the week the oat market locally had been showing less life even than previously. The seed market, however, retains life, and steady business Iras been transacted on a satWaclory basis, prices remaining practicailr unaltered. The increased demand for grass seed, together with the distinct falling off recorded by the chief finns in sales of fertilisers, as compared with this time last year, indicates that many farmers will signalise the end of the Government guarantee for milling wheat by putting land down in'grass instead of cropping. A great -manv of them are left with quantities of wheat ori their hands, and have had' their hopes raised by the Mimsterial announcement of intention to permit under restriction the export of wheat below milling grade. A great quantity of wheat of this kind in South Otago and Southland l is still in stack, and there are better hopes that this may later prove dry enough to warrant its being shipped when a market can be found for it than there are of a good deal of what was threshed' some time back. Since Australian buying orders for New Zealand hides suddenly ceased a few weeks ago, anything but heavy; ox hides have been nearly unsaleable. No particular explanation has been given for this cessation. though some hazard 1 the opinion that South American hides may bo finding their way to the Commonwealth. Tariff changes are not responsible, for there have been none. The Australian demand in New Zealand has been principally for our heavy ox hides, which, either by reason of climate or feeding or both,'are much superior to theirs, and inferior to none in the world. It was Australian buying competition which kept our market up, and it has been commented on that representatives of local tanneries have made no effort since by moderate purchasing to keep prices from declining in the way they have, since they are now left with fair stocks of relatively high priced raw material on their hands. The rabbitskin market, always a much more speculative one than hides, continues to show a decline, according to latest cabled advices. There appears to be a distinct fear of English competition with the local woollen mills in the matter of hosiery, and there is a tendency to complain that retailors have short memories in respect of the efforts made to produce this class of goods here at very reasonable prices compared with those to which the imported article soared during the war. The way in which these latter prices hare now come back suggests .that the loss of European markets through inability to purchase has caused Home manufacturers to devote special attention to Australasia as an outlet. It may be asked how competition is possible when imported goods have to stand the handicap of freights and stiff duties. It is alleged that in Britain raw wool can now he bought cheaper than the local mills have bought, the difference in some fine wools being up to 2d per lb. The pronounced reversal of conditions in the Homo industry is being watched with much interest here, but no one dares to prophesy as to whether it will be merely temporary or to any degree permanent. The latest mail advices in Bradford trade journals state that once again the situation in the wool trade and the wool textile industries has undergone a marked change. Quite recently the outlook seemed rosy, and there were many optimistic enough to predict another boom. The position of fine cross-bred and merino wool was assumed to be safe. The commercial treaty between Russia and Germany many believed, about to reopen important markets for the English wool products, both partially and fully manufactured, and. in a general sense, there was to be a revival in the export trade because of increased purchasing power among the Emopeon nations and the wool requirements of the Far East. The seller ruled the roost, now fine grades of wool have suddenly lost ground. So also have the medium and lower grades of cross-bred. But the predicted boom in the United Slates has not materialised. The spurt in the demand for worsted yarns from Germany has been cheeked. It is now realised that

the development of business with Russia in, wool textiles will be a very gradual process, even via Germany. There are also fears that Germany herself may be on-the eve of a financial crisis which will prevent her being quite as important a factor in the wool market as she has been for some time past. The recent feeling of confidence has, therefore, been displaced by one of uncertainty. This is causing both spinners and manufacturers to refrain from 1 speculative purchases and to post-pone-commitments. There is no doubt that much business

in yarns and piece goods was brought out by" the advance in the value of raw material Obviously, however, those engaged in the sale of fully manufactured wool textiles must be in a position to make a. profit on the relative basis of values, and manufactures now assert that it is

impossible to obtain proportionate prices for then - goods, and they have resisted the advanced rates recently asked for yarns.

The general demand for yarns on export account h*is not developed as expected, thus causing nervousness in that department also. The truth is that raw material has been advancing'at too rapid a rate for the rest of the trade, and having in

mind the severe lesson of the slump of 1920 users of wool and wool products are not willing to buy freely of the raw material until there is a’ more healthy

position in the piece trade. Largely the trouble is financial, for there ;a no" doubt about the world's need for

wool textiles. The difficulty is it has not

tho necessary purchasing power. There is also still a' financial 'problem at Home. Occasionally there are reports of linns being unable to meet their obligations ot to carry out the arrangements made for the liquidation of their heavy losses when values fell so seriously in IS2O. Much nervousness exists, especially in the export trade. Tho. point-of importance for the future is whether this increased consumption will be maintained. It must not be overlooked that certain classes of raw- material, because' of their cheapness, have been used in the woollen industry in place of other materials employed in pre-war days. If prices advance substitutes will again be used. .Recent developments have made it clear that, with the lesson o! the slump of 1920 still fresh in their minds, manufacturers and piece merchants will be guided bv the demand-for piece goods, and) not by any efforts to produce artificial prices for wool.

Lancashire reports that the slowness of the recovery in the cotton trade, which i.« the subject of a comment, is not really aurprising, nor does it occasion anxiety aa to. the future. Cloth is exceedingly dear. With cotton more than double the price ruling in, June, 1914, and the cost of spinning, weaving, bleaching, finishing, s <md distribution all over the tjje

ultimate price’ of the completed article—the actual figure which the consumer is asked to pay—is even now auch os to give him pause. What wall happen to cotton in the near future no one can say with confidence, but producing coste generally are declining, although too slowly, per* bans, to give satisfaction. Until they are a good deal lower than they are today, and the price of the finished product approaches, that of pre-war days, there is not likely to bp a rapid ‘ development of business. The uncertainty as to the future range of cotton is an adverse element in the position. Business men cordially approve of the report of the committee on the incidence of taxation in New* Zealand. The condemnation of the heavy burdens on companies 1 through the system and extent of income taxation is not more general than the approval of the suggestion that abasia of average profits over a longer period than one year should be adopted in assessment, obviating a big amount of taxation on profits of a previous year having to bo found in a lean succeeding year when losses, instead of profits, are being made. There is also general approval of the committee's insistence on the need for big reduction in Government expenditure. Some of the departmental efforts at economy have been causing mirth. Concentration in ono departmojit of buying of stores, etc., for various departments is said to have worked out thus: The previous buyers remain in the service, and fresh appointments are spoken of to reinforce the staff now coping with additional work in the making of Government purchases.