THE H.B. TRIBUNE MONDAY, MARCH 24, 1924. FRANC AND FLEECE.

Hawke's Bay Tribune, Volume XIV, Issue 90, 24 March 1924, Page 4

THE H.B. TRIBUNE MONDAY, MARCH 24, 1924. FRANC AND FLEECE.

Australian woolgrowers have been watching with close interest the heavy depreciation of the French franc in the world’s money markets, and are doubtless rejoicing in its marked recovery and praying that this may prove permanent. For them French competition at their sales is of much more direct, and therefore more obvious, importance than for New Zealand flock-owners. This is, of course, because the French mills have always handled a very much larger proportion of the fine wools produced in Australia than of the coarser grades that form the great bulk of our own output. Discussing the subject a recently received Sydney exchange points ’out that reports from abroad for some time stated that the mills in France were producing goods right up to their pre-war capacity. It is, therefore, surprising to read that at the annual meeting of the French Woollen Manufacturers’ Association it was reported that during 1923 the woollen factories had produced only about 70 per cent of their usual capacity. The export trade proved larger than last year, but business in France itself had been restricted. Orders were curtailed owing to the resentment of the public regarding increased prices for fabrics. It is certainly a tribute to the soundness of the wool market, says our contemporary, that prices have kept buoyant when the factories in France, Yorkshire and Germany have not worked up to pre-war activity. It certainly shows what a powerful influence the increased demand for wool from Japan, Italy, America and elsewhere has proved. If prices had almost entirely depended on competition from Europe as they did up to 1914, latter-day levels would not have ruled. To date this season France has been the largest buyer of wool in Sydney; but in pre-war time she took 230,000 to 250,000 bales of wool in the first eight months of each selling year. Tor the eight months ended February 29 last, exports from Sydney to French ports totalled only 159,217 bales. It is fully recognised that the fall in the international value of the French franc has been one of the main causes of the diminished French competition for wool in the Australian markets. Increased prices of the manufactured material, and the consequent decreased internal demand mentioned, were largely due to this, while, of course, adverse exchange movements made the buying of raw material abroad ever more costly. As a result we have it stated that the stocks of tops, particularly of merino, at the French centres of woollen manufacture are very substantially lower than they usually arc at this season of the year. With a decided and stable improvement in the franc’s exchange value, however, this shortage should augur well for an improved French demand as soon as the new season’s clip begins to come in, and that in Australia will be only some three or four months hence. Probably, indeed, the need of wool will compel France to seek it at some time ; during the Australian off-selling season, and possibly she will be found a vigorous bidder for Queens- ; land merinos in Brisbane during the i winter. That centre will be the only j market in Australia in which bulky . supplies will be available. i It may be thought that all this is not matter of any great concern i to New Zealand sheepfarmers. But j it is always to be borne in mind f that improvement in crossbred values invariably follows only upon J strong demand for merino. It is j only when merino supplies prove p insufficient to fill general require- I rnents that crossbred gets its a chance. The 1920-22 seasons should v have impressed this pretty J thoroughly upon us. So, revived French demand for Australian C merinos early in the coming season I should find its reflection in the New P Zealand sales that come later. Thus it is that our pastoralists are more concerned than most of them probably think in the maintenance of o the partially restored value of the French franc, and this consideration may prompt in them a little more t<

than a mere casual interest iu the cable news we may hereafter receive regarding it. Similarly, they may perhaps take note that the Japanese yen is threatened with definite depreciation in outside markets, a threat that, if fulfilled, may result in more restricted buying from the land of the Mikados. Germany has reaped one rich harvest by watering the currency, but it is not a process that can be repeated by her or any other country with impunity. That trick is now fully exposed, and the over inflated bubble is burst.