WOOL SUPPLIES.

Greymouth Evening Star, 16 June 1936, Page 4

WOOL SUPPLIES.

SERIOUS WORLD SHORTAGE.

So keen has been the demand for wool during the season just closed, and' so quickly has it been ‘ J 1 that stocks in overseas nmnuUc.tuieib hands are now cxceedm o ly low. T fact that two and three-year-old crossbreds have been dug out tor sale in London is symptomatic of the supply being quite unequal to the demand But there is a feeling-m many centres a hope—that prices will not rise unduly, because of the opening dear wool would make for artificial products. . , . The offering at the closing sales m Sydney was of a very nnsce laneous nature (says “Warp” in the Sydney Mail”). It included no supei linesand only- a moderate showing of good autumn-shorn lines. Similar conditions prevailed in London, where a successful series has also been held. Second-hand lots were; plentiful, and' it is reported that many of the crossbreds on offer were two and three seasons old. Stocks must indeed be low if these wools are being dug out from the dust of seasons, and buyers are taking them. That is the outstanding feature of the market. It is not possible to secure anything like accurate or up-to-date information as to stocks in users’ hands, but all the straws point to no stocks being available at all, and it is stated authoritatively that manufacturers in the United Kingdom have only enough wool to see them up to the end of July. August overseas is a holiday month and not much wool will be required, but, even so, the new season will probably start off with a completely clean sheet right throughout the trade —something we have not seen for many years. In view of this, it might not be too much to expect better prices; but the fact that there lias not been a move in this direction before now points to the belief that wool is not going too high—at least, not for some considerable time. The only factor against the future at the moment is that prices have declined somewhat in the United States, where business is reported as being very quiet. However, the latter fact rather counteracts the reports of lower prices, because not very much is being sold at these lower prices; and, after all, the United States is very self-contained, especially so far as wool is concerned', what it does having very little effect outside.

The low stocks in the United Kingdom seem to be due to a stronger demand, but 'from the Continent comes the suggestion that there the shortage of stocks is due to the German position. Germany has been trying to do without the staple, but does not appear to have been very successful, the threat not to buy Australian wool and to replace it with various “woolstras” being almost an utter failure. Certainly, Germany has curtailed buying here very considerably —although the demand is better of late —but she has been buying on the Continent in an endeavour to secure supplies to keep up, at least, her export trade. Remarkable contrasts are providfed by the concluding sale.s of wool in Sydney of the past . three seasons. Two years ago the market was “dead,” with a heavy carry-over, which, if not as big as has been the case in some other years, was nevertheless a heavy load for the new season to carry. Towards the close of the next season matters improved considerably, and the sales closed to a fairly strong demand and with only a comparatively moderate carry-over. This season the market closes at a point which, considering the quality of the offering, may be considered the best of the season, and be considered almost bare of wool.

The only wools now available are those coming in from fellmongers and certain parcels which had high reserves placed upon them by owners whose view of the future is decidedly on the bright side. Most of these owners are dealers, and as most growers had high ideas as to values throughout the season, probably the dealers had to pay good prices to get any wool at all, so that they will need to obtain something higher than current rates to make a profit. HIGHER PRICES. It would be unwise to prophesy that prices will not go higher. With a scarcity of wool for the time being, some buyers will have to pay dearly for their requirements; but to base ideas of next season’s sales on prices recorded during the next few months would hardly he justified. For one thing, wool has reached a point beyond which buyers cannot go without causing a decided increase in the retail cost of the manufactured goods. This is the real danger point to wool values. The trouble is that retailers have now more or less established values at certain set figures for suits, overcoats, etc., and they will find it difficult to hold their trade if they increase prices. Such articles of wearing apparel as stockings, for instance, would' be extremely difficult to advance in price. Manufacturers would probably much rather intro-j duco a proportion of substitute material to cheapen costs than increase prices.

It used to be a fairly common saying—and a true one—that in the days of high prices the actual cost of the materials bore very little relation to retail prices. Costs of manufacture accounted for most of the difference, but nowadays these costs have been pruned severely in many ways. Raw material costs have also been pruned, as growers well know, and are still but a limited proportion of the manufacturing costs, but they are nearing a point where they will begin to be quite an item in the cost of a relatively cheap manufactured article. That is something to be avoided at all costs. Artificial materials have already too strong a hold on the public mind to be comfortable to the woolgrower, and they must not be allowed to get a stronger grip. Growers may remark that this is entirely in the hands of the buyers and that they cannot control prices, but many growers who are whole-hearted-ly supporting the suggestion of a levy for wool publicity have the idea that woo] publicity, if successful, is going to mean higher prices. That is something wool publicity can never hope

to achieve without the aid of better financial conditions throughout the entire world. Meantime there are plenty of avenues for improvement in the woolgrowers’ conditions by the ■ increasing of the demand for wool at ■ current prices, and the supplying of ‘ that extra demand. If growers can !| grow more wool, the extra wool cost--1 ing relatively less, they will be much better off than they would be with '! higher prices. Their future would be ;! much sounder.