JAPAN’S WOOL PURCHASES

Hawera Star, Volume LIII, 10 March 1934, Page 7

JAPAN’S WOOL PURCHASES

HUGE INCREASE IN ORDERS EXPERIENCES OF A DECADE. IMMEN SE PROD UCUV E capacity. In view of the discussion that has arisen and the opinions that have been expressed regarding Japanese competition on the New Ziealand and Australian wool marKets, it is interesting to note that the Wool and Textile World, a prominent Bradford periodical, has devoted a leader to the subject or Japanese competition for tlie"riritisli textile manufactures.

“it is stated that the council, of the Wholesale Textile Association intends to make representations to the Government with a- view to urging it to take steps To prevent the importation into the United Kingdom of cheap textile: goods from Japan,” says the writer. “There is evidently a lear in some quarters that even the existing import duty may prove to be lnsufiicient to prevent the dumping of goods into this country, and if there is any evidence of substantially increasing iniports, it is, of course, a matter that should receive the most careful consideration.

“At present, however, the real menace of Japan is not apparent in the British home market; it is in overseas markets that it is . being experienced, with increasing force, and the problem of how to meet it is one that is causing grave concern. Japan has set '.oilier wool textile industry a two-told task. First, Japanese requirements must be met; secondly, outlets must be found overseas for the surplus production. Both considerations are vital to the prosperity of the industry, inasmuch as productive capacity has been increased to such an extent in recent years that the Japanese home market can no longer absorb the output, even although, to all intents and purposes, importation of cloth is pie-' vented, on account of tariffs and exchange.

CAPACITY OF MILLS ih© need for a big export trade is also imperative, because Japan lias to import and finance huge quantities .ot raw wool to clothe her machines, xhe position in .Britain is almost identical; The bulk of our wool is imported; the productive capacity of our mills is far in excess of home trade requirements, even in times of national prosperity, and a big export trade is essentia] to provide an outlet tor the surplus production. “The British Economic Mission to the Far East (11)30-31) stated in its report that Japan’s competitive power mainly depends upon (a) conversion costs, and fb) marketing costs and methods. That the competitive power is gaining impetus year by year is only too apparent, but it is exceedingly difficult to see how it is to be countered. “Under the heading of ‘Conversion Cost,’ it is manifest that labour is by far the most important item, ana, according to AVesxern ideas, wages, and the standard of living in Japan are so completely out of focus as to make one almost despair of ever bringing them into the picture. Possibly, over a long period ot years, there will be a gradual raising of the standard of living and conditions of employment, but that change can conic only from within. “The British Economic Mission came to the conclusion that Japan undoubtedly constitutes a serious potential menace to Great Britain’s export trade so long as low production costs tanbe maintained. The report also urged a drastic reduction of production costs of all kinds in Great Britain. On the assumption that full effect could >ie given to this admirable recommendation, the relative positions would be scarcely changed, for the commission considered that Yorkshire wages costs per unit of production are at hast two and a-half times, and may be as high as tlirp© times, the Japanese costs.

INCREASE IN JAPANESE BUYING

“Then years ago Japan bought 153,000 bales of wool in Australia: last season she bought 644,000 bales, this season she is buying just as freely in Australia, and is also operating in South Africa and in South America. The raw material is being purchased in open competition and at world prices, and the manufactured products e-.il ultimately come on to the world .nnrkets at prices to defy competition. The Wholesale Textile . Association niav have ample _ justification for directing the attention of the Board of Trade to the menace of Japanese textiles in this country, but the danger in overseas markets is still more glaring. . . “Surprise has been expressed m some quarters that Japan should be in such a position as to be a menace to the export trade of European countries, but her purchases of raw material afford a good indication of her productive capacity, even although, as is generally assumed, very large stocks of *wool are being held as a national reserve in case of emergency. “In 1920-21 Japan bought 4 per cent, of the wool sold in Australia, and was seventh on the list of buyers, but during the last three seasons sho has taken from IS to 20 per cent, of the wool sold in Australian markets, and has advanced to the second position as a buyer-country. Another significant trend is that, whereas about 10 years ago only merino wool was imported, about 30 per cent, of fie total ini ports is now crossbred wool.