WOOL PROSPECTS.

Evening Star, Issue 21710, 3 May 1934, Page 8

WOOL PROSPECTS.

The report of the London wool sale this week is not particularly pleasing to wool growers in Australia and New Zealand.,, The conclusion of the New Zealand selling season was not reassuring to those who comprehend that several seasons on end - at prices corresponding to those realised during the bulk of the past season are needed to make up the leeway incurred during several seasons of production at a loss (in most cases). In extenuation of the tame ending of a selling season which, having opened at levels which dispelled a great accumulation of pessimism, on the whole justified a belief that the evil days had passed it must be admitted that included in the closing catalogues was a preponderance of wool by no means attractive to buyers who for the most part had practically filled their orders and who were hesitant in their bidding. It has • also to be realised that more than the past season’s clip has come on the market in one selling season and has for the most part been absorbed; for there were growers in the fortunate position of being able to" refuse tho poor offers of 1932-33 and even earlier seasons, and hold their whole clips in store in town or country until the market recovered. Again, of late weeks Germany has not been in the market as a buyer. There can be little doubt about her wanting raw material for textiles, but Germany’s finances have not at all recovered from the collapse of 1929 (when 6,000,000 Germans were thrown on the streets workless), which was one of the European reactions from the American crash. Germany’s purchases abroad are rationed by her Government, and evidently the Government policy is a purely hand-to-mouth one. Temporary embargoes on imports are imposed and lifted in a most bewildering way, and at the same time signals of distress are hoisted once more in the form of demands for a moratorium of war debts already scaled down to about a tenth of their original figure. What competent observers declare is that the reconstruction of Germany from fioor to ceiling is necessary and may take a generation—more probably under a revulsion from Hitlerism than by continuance of his methods.

Before the war it was Germany’s complaint that she was being encircled in both a military and a commercial sense. Now it seems to be her idea to shut herself up within herself and to be as self-contained as possible economically, at the same time warning the world what will happen to it when she has recovered. Material misery ranks high as a factor in this attitude. Nevertheless, such breathing of threatenings has its influence on other Powers, which are inclined to aggravate their own post-war self-sufficiency in trading matters so as to be prepared to protect themselves from Germany if and when she ' does spring. This obstacle to a resumption of international trade on a prewar scale is causing alarm everywhere, and the latest symptoms are nervousness on Australia’s part as to price

prospects for her next clip. (Shearing in Queensland may begin some time next month.) The early estimates for the coming clip are in the neighbourhood* of 3,200,000 bales, and there will be no carry-over in any wool-growing country of consequence, nor are stocks in manufacturers’ hands understood to be anything but light anywhere; while South Africa’s wonderful recovery from drought cannot be speedy enough to avert another heavy shortage in her clip. But some of those interested in wool-growing are already taking longer views, influenced in this by the attempts of so many countries to live in water-tight compartments. It is being pointed out to Australian wool growers that Australia’s near-monopoly of fine wools may not continue. Some years ago the United States erected high barriers against the admission of raw wool. Now Germany has imposed a temporary embargo, and Italy has decided that wool shall only be imported under a system of licenses. She has a reciprocal trade treaty with South Africa and may draw supplies of raw wool (when again available) from there in preference to Australia, with which country she has had long-stand-ing sources of friction in the canegrowing parts of Queensland and more recently in Western Australia. The question has been asked: “ Are supplies available outside l Australia?” An Australian expert answers: “Of course they are. In normal seasons almost as much fine wool is grown in South Africa as in Australia, and South Africa has many merino flocks of the best Tasmanian blood. The tendency in that country is to breed towards the Tasmanian typo: now, rather than towards the stronger wools, as in Australia.” The same writer pursues the subject in a direction somewhat unexpected, but by no means far fetched. He writes: “Before the introduction of the quota and license systems to regulate trade, all the signs pointed to a bright future for the wool-growing industry. The outlook may be just as cheerful still, but the new systems to regulate trade arise from the more desperate and determined policies adopted by various countries aiming at self-containment, and these policies may affect the raw wool industry, as they, have affected already other primary industries. /It would be foolish to assume that other countries are incapable of producing much more of their wool requirements. A century ago Spain, France, Saxony, Italy, Russia, Britain, the United States, and some other countries grew merino wool of superfine quality. France and Germany, now leading wool importing countries, were then the principal countries of export. In later years it was the product of Australia, grown more cheaply than elsewhere, and allowed to enter every market without restriction, that determined the fate of tl>e wool-growing industry in the older countries.' But if these older countries elect to do so', by policies of nationalism, they eqn grow more wool and they can grow "merino wool. The cost may be great, it is true, but costs of production seem to be of but secondary consideration with the countries which are adopting plans of economic isolation. There is nothing fanciful in the fear that large quantities of clothing wools can be grown iii those countries of Europe which aim at self-con-tainment.”