CAUTIOUS OPTIMISM

Evening Star, Issue 22229, 6 January 1936, Page 5

CAUTIOUS OPTIMISM

WOOL MARKET RESUME SUPPLIES ARE SHORT NEW ZEALAND CROSS-BREDS IMPROVE. A cautious optimism is the keynote of a resume of the wool market in 1935, given in a report from Messrs H. Dawson, Sons and Company’ Ltd., of London. The summing-up of the firm as at November 19, is that stocks of wool in most consuming centres have boon allowed to fall to an unusually low level. Consumption has v continued apace, both in the worsted and the woollen sections, and lias quite overtaken supplies. The ladies’ goods demand has kept many of the English .mills fully employed in both sections. Meanwhile sentiment has been generally cautious, and textile traders, remembering their experience of two years ago, have been pursuing a careful and sound policy. The progress of values since the January series of this year gives the most significant testimony of the soundness of the raw material. The Yorkshire quotations for 64’s tops wine generally about 23jd to 24d at that time, as compared with Slid to 32d in November, thus showing an advance during the past 10 months of 33 per cent. SUPPLIES WILL BE ABSORBED. It has to be admitted that the urgent need for prompt deliveries has established some premium on spot arrivals of the new season’s wool. It is certain, however, that the quantities available at the current auctions will be readily absorbed at this higher level. In Yorkshire the position at the combing mills is almost astounding; while there is also considerable overtime and night work in the woollen trade section. Employment is better tlan fur several years past. Stocks have been reduced to a low level, and both consumers and dealers are anxious ,:o replenish. Despite this, however, there is considerable nervousness due to tae experiencs of 1933 and 1934, and the substantial advance already established gives ground for some caution. ‘There are, nevertheless, some cutstanding facts that justify the picsunt level. The supplies from Australia are likely to be about 150,000 bales fewer than last year. Moreover, the season’s offerings are being rapidly disposed of; nearly a quarter of a million bales have been sold in excess of the quantities of the previous season, and consequently it is quite probable that the Australian auctions may finish this year about Eastertide. The serious loss of sheep 'by the drought in Queensland is a fact that cannot be lost sight of, seeing that in some districts stations have been almost decimated., There will; of course, be some dead wool.coming forward, but the real loss will be felt in the lambing and the resultant loss to sheep during the next two years. JAPANESE BUYERS ACTIVE. As regards demand, Japanese buyers in Australia’ are unusually active, and some of the more optimistic reports have estimated their requirements for the coming season to- be largely in excess of previous years, and believed by many experts. to be in the region of 800,U00 to 900,000 bales, although this figure may be a little exaggerated. Nevertheless, their purchases already are well ahead of last yar. It is satisfactory to know that the South African clip is not only mqi-e robust, but likely to provide an increase of 70,000 to 100,000 bales. Twothirds of the clip has yet _ to be marketed. Some German buying has already taken place in South Africa, but not to the same extent as last season. Germany has also been able to obtain a portion of her supplier from Australia.

Another satisfactory feature of the world’s position is the genuine improvement in the textile trade of the United States. The consumption has increased enormously, and the domestic clip is fully ear-marked. They are already buying freely in Montevideo and British America, although they are not yet able to import to advantage from Australia or this country. It is fully expected, however, that they will be forced to come very shortly into our markets for our Australasian sorts'.

In qross-breds there is also a decidedly improVed position, although there is still some disparity between the value of cross-bred tops in Bradford and the price of raw wool, especially in the medium grades. Cross-bred tops appear to show about 15 per cent, advance as compared with the end of January, but raw wool, especially New Zealand’s, shows 20 per cent, to 25 per cent., owing to the strong demand for those cheaper grades from those from some of the poorer European countries which cannot afford fine merinos. HIRE PURCHASE SYSTEM DEFENDED Mr George Kendrick, of the firm of Bowmakers Ltd., Bournemouth, England, in reviewing the company’s year, describes the business done in financing motor car purchases, and remarked that the time was rapidly disappearing when bankers and _ economists looked askance at the principle of hire purchase. In effect it made credit available for the consumption of goods produced on credit. Mr Kendrick asked those who decried the system what the position of certain prosperous industries in England would be if facilities for consumption credit were to be withdrawn. Their company did not pretend to do more than a small share of the business available’, yet last year they had financed merchandise to a value of over £3,000,000, and he would leave it for the shareholders to judge what that meant in terms .of employment. Experiences with the company’s subsidiary banking facilities trust confirmed the board’s belief that they were only fringing the potentialities which that form of finance offered. But whatever the possibilities were, the directors intended to move with the caution which had characterised their methods in the past. COTTON, RUBBER, ETC. Press Association—By Telegraph—Copyright LONDON, January 4. Friday’s closing prices were as follow: Cotton.—Spot, 6.44 d per lb; February. 6.20 d per lb. Rubber. Para, 63d; plantation smoked, 6id. Jute, —January-February, £l9 17s 6d. '' , Copra. —■ January-February,, South Sea, £l3 15s; smoked, £l3 2s 6d; plantation Rabaul, £ls. Linseed oil, £3O. Turpentine, 4os 6d.