WOOL PROSPECTS

Gisborne Times, Volume LXXXIV, Issue 12769, 27 January 1936, Page 2

WOOL PROSPECTS

IMPROVEMENT ANTICIPATED. RAW STOCKS ARE LOW. The tendency in the wuul market at the present time is definitely upward and th'ere are very good reasdris for the expectation that wool prices will improve still more in the near future, says the, “Sun,” Specialists are not prepared to hazard eonfidbiit predictions on this Score, because they know from experience that th'c wool market has a, habit of upsetting calculations, . but we should appreciate that avool prices are still very depressed indeed, and stocks in manufacturers’ hands are said to be low. The factors , which may be operating to the benefit of wool prices seem to be

1. Prospects' of diminished supplies next season. 2. Limited stocks of raw material on hand in overseas countries.

3. Low prices for wool, particularly for gold standard countries. According to reports it is improbable that the South African clip will be much more than 600,000 bales next season. The recent drought in that country depleted flock numbers greatly, and although seasonal conditions are favorable now, it will take South Africa some time to reach the maximum output of earlier years. In South America and New Zealand the output of superior clothing wools is not likely to be increased very much, and it would not be surprising if the prevailing drought in Queensland causes a considerable shortage in the next Commonwealth, clip compared with the clip of this season.

That raw wool stocks in. Great IJritain are low there appears to be very little doubt. According, to an official report raw wool in warehouses and depots in Great Britain at the end of February were 25 per cent, below those at the end of February, 1934. Stocks in railway and canal depots in Yorkshire, which reflect the position in manufacturing centres, were 50 per cent, below the stocks at the end of February, 1934! It is believed also that in European countries and Japan stocks are low. Some manufacturers are bare of wool. In Germany some woollen manufacturing establishments may be obliged to shut down because of depleted stocks. The low price of wool is, however, the soundest factor upon which to have an opinion concerning market tendencies. A. movement from gold such as the depreciation of the Belgian currency, which has occurred, might easily make a great difference. At the recent sales buyers for France have been very active. It may be that the French manufacturers are determined to lay in stocks of wool while it is cheap as it is at present in terms of French currency. Even at the rates of last season, whcili were 50 per cent, to 60 per cent, higher than the. rates of this season, wool was anything but dear to the principal wool-using countries, with the single exception of Japan, and now it is good buying even by Japan, with her greatly depreciated yen. But there is - not much raw avool available to buy, and rates are hardening in consequence. The recent improvement in the market Avas unexpected a few Aveeks ago and experts considered that any advance on the then current rates Avas improbable this season. Yet the market has improved in the interim quite appreciably, and such are the proA’erbial vagaries of avool.