The Evening Star THURSDAY, AUGUST 31, 1933. WOOL’S RECOVERY.

Evening Star, Issue 21504, 31 August 1933, Page 8

The Evening Star THURSDAY, AUGUST 31, 1933. WOOL’S RECOVERY.

There have been so many occasions in the past four years when pseudo authorities have spoken about “ turning the corner ” that the phrase has become debased currency. Probably for that reason certain recent symptoms and developments have passed with a minimum of comment. New Zealand’s prosperity is finked up with Britain’s, and the basis for optimism in this part of the world is the steady recovery of British trade and industry. Of this there can now be no doubt. Fortified by this knowledge, full importance can be attached to the pronounced rise that has taken place in prices for soma but not all of our staple exports. At the moment the wool market is commanding the liveliest interest. This week a representative sale was held in Sydney, and a “ clean-ing-up ’’ said was held in Dunedin. For certain finer classes in both cases the svjpply was obviously unequal to the demand, and growers can await the main sales with the confidence born of the knowledge that buyers are in receipt of orders which they have been unable to fulfil. Particularly is this said to be so in the case of Japanese demand. Some little while ago there was talk of Japan retaliating because of the outcry against the Japanese trade drive in Australia, this to take the form of transfer of her wool-buying from these parts of the world to South America. Happily for our pastoral interests, what is known as the statistical position forbids any country being able thus to pick and choose as to the origin of supplies of raw material. Because of losses in the flocks of parts of Australia which were visited by the old enemy, drought, the Australian clip will be smaller this season. At the same time mills in most textile centres are short of stocks, while they have been favoured with orders which involve as speedy a replenishment as can be accomplished. The renewal of activity in the West Hiding of Yorkshire is attested by a drop in the unemployment figures by considerably more than half. There may not be so much actual revival in some Continental countries, but a disposition on their part to buy raw wool in advance of actual requirements or on more than a hand-to-mouth scale is stimulated by a realisation that stocks of wool bought at a reasonable price may be a better security than a doubtful currency in these days of uncertain and fluctuating exchanges. The difference which the rapidly changed market spells to wool growers here is indeed great. On yesterday’s range of prices in Dunedin fine wool may bo quoted as 40 per cent, higher and coarse wool as 25 to JO per cent, higher. This comparison is made with the closing sales in March last, after the exchange rate on London had been raised, so that both sets of prices 1 are measured in the same currency.

Tho Sydney rise is stated at as much as 50 per cent., and this indicates the urgency of the demand for the fine wools. It is to be hoped now that the last has been heard of growing wool at a loss. Last season (according to Dalgety’s annual review) Australia’s wool cheque was £39,370,746 from a clip of 3,635,779 bales, which compares with £73,877,862 from 2,955,585 bales in the last season before tho slump (1927-28). Tho competition which has led to so pronounced a rise in tho wool market is a sign of returning confidence. Anticipatory of this rise there have been other signs of belief in the emergence of better times. Official statistics dealing with transactions in rural land support the view that in many cases such land is ceasing to bo regarded as a liability instead of an asset. In other words, money for investment is again being directed towards land instead of away from it. This welcome change is likely to be hastened by the very altered aspect of the 'wool market. If, as seems probable, Britain is destined to show' the W'orld the way out of tho trading and industrial morass, one may hope for an increased purchasing power developing among the masses in Britain, and this should give a lift to prices of other of our staple exports besides wool. In her small way New Zealand could help towards a restoration of that purchasing power by unpegging the rate of exchange and so freeing our import trade with Britain from a restriction which the British manufacturer strongly resents. With higher market levels and cheaper oversea freights on his produce the New Zealand farmer should soon no longer require the subsidy on exports w’hich ho has received since the end of January. Tho chairman of the Associated Banks in his Rotorua speech said some heartening things of New Zealand’s prospects, and he spoke not only from his own observation, but on advice from London. He, however, refrained from allusion to that particular matter.