THE WOOL MARKET

Hawke's Bay Tribune, Volume XXIII, Issue 210, 18 August 1933, Page 11

THE WOOL MARKET

RECENT FIRMER TONE. MARKED ADVANCE MADE. The rapid firming in the wool market is commented upon in the review of H. Dawson, Sons and Company, Limited, London, which states, under date July 4:—“Since the last series of London sales in May a momentous upheaval has overtaken the market. Values have made startling advances in the raw material and in tops. The rise has come with such rapidity and hurricane force that there is a natural apprehension as to its stability. The reaction was overdue but there is fear lest the pendulum is swinging too far. Consequently it is difficult yet to find a safe negotiable basis for tops or yarns, and the turnover, except in raw wool, is limited. Meanwhile, protective quotations are alone obtainable. Muau..: tturers find advances are difficult to enforce, although cloth stocks are reported to be depleted. It is hoped that the large buying power of the multiple distributors may assist to stabilise the advance, by taking the next lower grades in some lines. “There are several contributing factors to the situation which must be taken into account before a clear policy can be adopted with confidence. It is notable that the rise in values coincides with a similar improvement in many other basic commodities. On the other hand, it has been largely helped by the efforts of the United States in this direction, which efforts have, however, been mainly accomplished by an inflation of their dollar. This element of weakness has to be recognised and cannot be entirely eliminated until the vital problem of stabilised currencies can be straightened out. “The strongest factor in the situation is that, in spite of political and

financial uncertainty, there is an undoubted improvement in the demand for the manufactured and semi-manu-factured article. Shelves are lightly stocked, and there is a large vacuum to fill, after the hesitancy and pessimism of recent years.” The United States influence is dealt ■with in a more recent report by Winchcom.be, Carson, Limited, Australia, which states:—‘‘The degree to which the wool market has eased is an indication of the special fillip by which inflation in the United States boosted prices. When the dollar was descending in value, those with funds in America were investing their money in goods in preference to leaving them in a depreciating currency. The dollar has of late improved fin value and that extra buying has' ceased. From a statistical point of view wool is just as strongly entrenched as it was in mid-July. A heavy consumption of Merinos and the finer crossbreds proceeded last year. As employment has improved in Great Britain and Europe, the likelihood exists that goods will be more freely purchased during the ensuing 12 months. The easing in prices from the extreme level experienced, therefore, does not lead us to change our opinion that the new clip will realise appreciably improved average rates on the general basis of results secured for the past season’s wool.”