THE WOOL MARKET.

Evening Star, Issue 21638, 6 February 1934, Page 8

THE WOOL MARKET.

There may have been disappointment in some quarters at the result of the second wool sale in Dunedin yesterday, but on the whole the result of the auction was satisfactory. The prices obtained were much as had been expected by those who had closely followed the market developments in the last few months. Well over a million pounds has accrued to Otago growers as a result of the two Dunedin auctions, and the producers—and indeed the whole of the province, town and country—can be profoundly thankful for the favourable emergence from the depressing conditions of the past two or three years. There was an active demand yesterday for fine qualities, of which there was a considerable quantity forward, but cross-bred wool found rather a dull market, with a consequent drop in prices. There is no reason for discouragement, however, for, as has been repeatedly pointed out, the statistical position is sound. The sudden and progressive rise in prices had raised hopes among many growers that it would continue for all descriptions of wool, but it should be obvious to everyone that a point must bo reached beyond which the buyers cannot advance. In Otago the farmers with small holdings produce mostly cross-bred wool, so to them the slackening in the demand is a serious matter, and it is sincerely to be hoped that prices for their lines will not Tecede any further. Many of the smaller settlers carry on mixed farming, and the low prices for butter-fat are an additional handicap. So far as the wool position generally is concerned, there is ground for confidence throughout this year. A shortage in the clips in Australia and in South Africa, with its record drought, and the signs of returning prosperity in the world, have stimulated a demand that is likely to continue for some time. New Zealand looks to London as the wool barometer, and from the latest reports the conditions are favourable. The firm of Messrs H. Dawson and Sons, which is regarded as a reliable guide, considers that the slight reaction in the London sales from the peak values is healthy, and should not cause any disturbance of confidence. It is pointed out that the consumption of wool continues apace in the manufacturing centres. The Australian wool growers’ representative in London reports that, while easier tendencies have developed in most of the wool markets, partly as the result of profit-taking, the financial strain of early overseas purchases, and currency uncertainties, the trade position is sound. The long view has to be taken in the matter of wool marketing, with the realisation that stability is to be preferred to meteoric rises, with the inevitable dangers of disastrous reaction. In considering the welfare of the market and conditions generally overseas, it is obvious, as has been pointed out, that if wool values outpace the purchasing power of the jiublic confidence will soon be displaced by nervousness. The inherent value of wool is not disputed. It can never be displaced, but the competition of substitutes, produced on highly scientific lines, would be more serious than it is even now if wool went to prices that were embarrassing to the textile manufacturer at Bradford and on the Continent.