WOOL TRADE IN 1915.

Lyttelton Times, Volume CXVII, Issue 17096, 19 February 1916, Page 6

WOOL TRADE IN 1915.

effect of the khaki boom. PHENOMENAL RISE IN VALUES. MAXIMUM PRESSURE ON MACHINERY. [From Our Correspondent.] BRADFORD; December 31. The predominating influence throughout tho wool trade during the year 1915 was the Great War. Factors which in normal times would have loomed large in an annual survey have receded into the background and have been replaced bv features without precedent in the history of the industry. From time to time "internatioiVal commerce in wool and wool products has been disturbed bv wars, more or less extensive, but there has never been anything to compare with the sensational developments in values and business which have arisen from the present gigantic coil flict between the European Powers. No country in the world has escaped the influence of the Armageddon, and through it all Bradford has. in a great A- degree than over, been the hub of tho wool trade. The shutting off bv the course of military events of im-> nortant wool-consuming centres of Germany, Austria, .Belgium, and North France caused A phenomenal concentration of demand upon Great Britain, or to he more precise, upon tho West Riding of Yorkshire. The tremendous Aush .of orders to meet the needs of fhe Allied armies, the fluctuating operation of embargoes—due to the exigencies of the military situation—kept the trade pulsating with excitement and sent values of tops and yarns leaping to record heights. The fact that so large a proportion of the wool supplies of the world is grown within the British Empire, gave the Government, with the patriotic” support of the Colonial authorities, a large measure of control over raw material. THE NEEDS OF THE ALLIED ARMIES.

This was important chiefly as regards cross-breds, and instead of there being, as predicted, a shortage of wool for military requirements, there was enough and to spare, and towards the end ot the vear the Government allowed the export trade to be resumed to “ sale ' destinations. On a rough computation Lie Allied Governments had to clothe twenty millions-of troops, and there is official authority for stating that «j * proximately 150 million J ai s tary clothing were produced m this country during the first year ot the wa , in addition to vast quantities of ho, ir>-v including such items as thntj Uiree million pairs of seeks. Enormous quantities of wool' far greater than Hus country had ever handled beioie, noie consumed in the effort to keep pace with the demand, and maclnnoij nas run clay and night, month after month. Machinery capacity became a donating influence in fixing the values o semi-manufactured and manufactured goods, and this was accentuated as the ever-rising tide of recruits toi Army thinned the industrial ranks, as the end of the year approached it became evident that the khaki -boom was on the wane and manufacturers began to pay mere attention to ordinary domestic needs, although there was still a good deal of machinery employed on orders of a- military character tor France, Russia and Italy.

A YEAR AGO—AND NO AY. In view of the unparalleled times through which we are passing, it is interesting to recall the prevailing opinions in tiie trade a year ago and to compare them with what has actually happened in the meantime. In December, 1914. everybody was convinced ' that the enormous demand for khaki would mean a cross-bred boom and perhaps a famine in supplies before the end of the year, but merinoes were considered to be in quite a position. It was argued that the United Kingdom and America could not consume the large proportion of merino wool that in normal times served the machinery in the new isolated parts of the Continent, and that consequently a slum-, in values seemed inevitable. Already the price of merino tops had fallen to the extent of sixpence per pound from the comparatively high prewar level, whilst cross-breds in the same j period had risen threepence. Indeed, by the end of January fine cross-bred tops were as dear as merinoes. Looking back over the events of the year, i 0110 realises- how hopeless it is j for the most enlightened prophet to endeavour to predict far 1 ahead when international trade in so essential a product as wool is completely dislocated by, an almost world-wide war and temporarily controlled by factors for which there is no precedent. UNEXPECTED DEVELOPMENTS. There has been a cross-bred' boom, it is true, but did anyone dream that cross-bred tops would advance a shilling per pound above pre-war rates? And then again, instead of there being a famine in cross-bred tops, the Government was actually prevailed upon to permit an extensive export trade because in the last quarter of the year there was an inconvenient accumulation of stocks. The greatest surprise, however, was with regard to merinos, and here the chief factor that was overlooked was the effect of a. concentrated demand on limited and inadequate machinery. coupled with diminishing labour. Instead of there being a slump, 70’s tops at the end of June were worth one shilling per pound more than before the declaration of war, when they were considered dangerously dear at 2s 9d. Subsequently there was a successful bearing movement and' a drop of about sixpence, but this was followed bv a sharp reaction in November and December, and by the end of the year the June level had been regained. The course of raw material values did not coincide with the movement in tops, because, owing to the manner in which machinery capacity controlled the market, topmakers for a time enjoyed most generous margins, but, at "the same time, in the colonies and in London growers and importers were pleasantly surprised by the sustained demand for good combing sorts. The natural desire for wools which gave least trouble in combing, coupled with the inadequacy of carbonising plant m this country, caused the unusually large proportion of faulty and inferior wools to be neglected, but even for these sorts there was a recovery at the back end of the year in London, when better sorts were scarce and values all round were booming. THE RISE IN MERINOES. In tho first two months of the year -here was a combination of circum- ' stances that laid the foundation of the sensational rise to record prices in the midsummer. Firstly, the position of merinoes was changed as if ov 11 magician’s wand when tho embargo on Aus-

-iS £ >' tralism exports Was lifted. The admission of American, Japanese, and rencii competition brought about an lnuneclate rise of 10 per cent in Australia, and the subsequent announcement that merinoes could be shipped from tins country to the United States and Allies, under‘license, had a similar effect in London. . , The position of affairs was accentuated by the fact that stocks in Yorkshire had been reduced to a minimum owing to the belief in a further fall. A depleted market was suddenly confronted with a rush for orders for tops and yarns, both for home and export trade. Users grasped the fact that demand was going to outrun production, and contracts were placed months ahead: indeed, some went so tar as to cover to the back end of the year. The trade was caught short ot merino wool, and, to make matters worse, there was so much congestion at the ports and on the railways that consignments which in normal times would have come to hand in a few days were as many weeks on the way. This congestion greatly interfered "with the London sales arrangements, wool purchased at one series being still at the clocks when the next series was reached. A temporary re-imposition of the embargo, pending the completion of the export arrangements with the United States Textile Alliance, had no retarding effect and panic prices prevailed. I Hero was a general outcry for merino wool, and particularly good combing sorts calculated to cause a minimum ot trouble in the process of top-making. UNPRECEDENTED PRESSURE ON

MACHINERY

As the year advanced the trade became more and more at the mercy of machinery and in buying tops and yarns price was a secondary consideration. The time of delivery was the vital point. The chief reason for this enormous acceleration in the demand for merino products was the call upon British machinery to make good the stoppage of imports from the Continent. Under normal conditions 75 per cent of the yarns imported into this country were required for the hosiery industry of the Midlands and Scotland, and the inability of Continental spinners to supply the goods meant big orders for British spinners. Extensive clothing orders which in times of peace had gone to the Continent were also diverted to home manufacturers, and these developments, coming on top of the vast needs of the Allied Armies, put a maximum pressure on every available comb, spindle, and loom. The Board of Trade returns affordample evidence of the trend of events. During the eleven month? ended November 30 we imported only 582.1141 b of woollen and worsted yarn as compared with 18,560,2581 b and 30,638,7161 b respectively for the corresponding periods of 1914 and 1913. Burin o- the same period of this yean we imported 5.009,000yds of woollen and worsted manufactures as compared with 44.707,913yds and 54,719,402yds for 1914 and 1913 respectively. These figures alone indicate some of the gaps that had to be filled by home producers. On the other hand, we lost a good slice? of our export trude in ynrns imd clothing, but this was to some extent balanced by the huge demands of France for woollen and worsted tissues. Our exports of woollen and worsted tissues for the eleven months ending November 30 amounted to 135 million yards as against 143 million vards. and 153 million yards, in 1914 and 1913 respectively. France took no less a proportion than 49 million yards of the eleven months’ exports as compared with less than four million yards in 1914, and about six and a half million yards in 1913. France also more than trebled her demand on us for yarn, chiefly for hosiery purposes. THE CROSS-BRED BOOM.

During the first half of the year the tremendous call for khaki and for uniform clothing for Franco and Russia eclipsed all other factors in the export trade. Hundreds of thousands of new recruits were clothed in makeshift uniforms because manufacturers could not keep pace with Government orders, And the conservative preference of tiro War Office for a woollen fabric had to be modified so as to enable fncturers to supplement the ''output. We have since been officially informed that during this peripd tho War Office was not merely meeting current needs but accumulating stores for the future. Over 40,000,000 yards of khaki tunic and trousers cloth, and 10,000,000 yards of greatcoat cloth were bought for the British Army alone. _ In the spring tho tension with regard to wool deliveries was relieved; in tact, raw material supplies eventually came to hand at a much greater rate than they could be put through the combs and stocks became inconveniently large. The shortage pf labour also began to constitute an aciite problem as the Army increased in size. In fact, a “bottle neck” was created, and topmakers, behindhand with, deliveries, were met on the one hand by a clamant demand for the tops and on the other bv ever-growing stocks of wool, it was felt, however, that all the cross-hied wool would be wanted before the end of tho year, and this idea was fostered bv the rigorous manner in which the War Trade Department conserved the season’s clip for home use. Thus towards the middle of the. year there was the anomalous spectacle of values of tons and yarns soaring to record heights, whilst warehouses were packed with wool. THE ADVANCE IN HOME WOOLS. The British clip cams on the market when merinoes and cross-breds were booming and growers reaped a rich harvest. The values at the country fairs were from od to_7d per lb above the basis of the previous year, and Bradford quotations had to be adjusted accordingly. When the new level was fixed. Lincoln, Shropshiies, Downs and similar wools were 6d per lb above pre-war rates. Staplers soon found it difficult to persuade users to pay such prices; in fact, they had paid dearly for their supplies, and it was not until the hack end of the year, when the raising of the embargo brought American buyers into the.market, that remunerative business was possible. Holders of stocks never wavered m their belief that all home-grown wools would sooner or later be 'wanted, and Bradford quotations wore well maintained during a period when merinoes and croSs-brcds sharply declined.

EFFECT OF THE BEARING MOVEMENT. The apex of the rise both in merino and cross-breds was reached at the end of June, and a phenomenal rise it had been. Reckoned from January 1 me-

rino tops had advanced 18d pci lb. fine cross-breds lOd, medium cross-breds 9d and low cross-breds Bd. The trade began to realise that it was time to cry “ Halt,” and the pendulum swung back with dramatic suddenness. What actually started the July decline it is difficult to say, but it coincided with the unique innovation ot the nnpoitation of fine tops from the United Stales. When the tension was at its height it was suggested that fine tops combed in America should be imported and when calculations as to price, freight, insurance, etc., were worked out, it was found that there was a modest margin of profit for America on the basis of June quotations in Bradford. Orders were placed and about 500,0001 b weight were shipped to this country. It proved, however, to be only a passing phase. The vigorous bear in" movement in Bradford in July soon wiped out the margin of profit and wo heard no moro about American tons. . Users of tops and yarns developed a spirit of cautiousness, and from the raw material markets came reports of waning competition. Restrictions on exports caused an accumulation of stocks of merino tops in merchants’ hands and for financial reasons there was towards the end of July a distinct desire to realise. Offers were made in secondhand, which soon pricked the bubble of topmakers* inflated quotations. A decline set in and it. did not reach ns limit until the middle of October. By that, time 70’s had dropped to the extent of 7d below the highest point whilst 60’s super fell to the extent ot Cd. and iu crossbreds the decline was about 4d.

ANOTHER UPWARD TURN. There were signs of reaction when in September the War Trade Department realised that there were mure cross-bred wool in the country than the trade could consume. It was announced that 105 000 bales of cross-bred and similar wool would be exported under license to safe destinations, and m other respects the restrictions on export trade were relaxed. This immediately checked tho fall, hut it was not until tn<3 British Association of Wool Buyers convinced the War Trade Department that it was desirable to export cross-bied tops that values took an upward turn. Who would have thought 111 JanuaiJ that in October there would be a busk export trade in cross-bred tops? 1 h s development coincided with, or w as immediately followed by, a revival ot competition in the primary markets. America and Italy forced the pace 111 Australasia whilst at the October-Novem-ber sales in London there was an astonishing advance of from 10 to U per cent all round, and at the December sales another jump of 10 per cent was 1 recorded. America became a ng factor, partly as a. result of the placing of considerable orders for the Allied armies with United States firms. in October that country took from Bradford £360.000 worth of wool and m November £334,000 worth, as compai - ed with £41.000 in September, £54,000 in August, and similar figures for the earlier months. The total exports of wool to all countries went up from 8,700,0001 b in August to 14,000.0001 b in September, 18,000,0001 b in October, and 17.000.009 lb in November. A complete restoration of confidence, coupled with an idea that as a result of the boom in recruiting there would be further diminution in the output, caused a good deal of forward buying and up went prices with a bound.' In December topmnkers were practically booked up for months ahead both in merinoes and cross-breds, and values of tops regained tho June level, whilst it was almost impossible to buy some sorts of yarns. Thus a unique year came to a close with buoyancy in Bradford, and in the raw material markets, and with values 011 an ascend in- scale. FEATURES OF THE YARN TRADE. In no branch of the industry lias the pressure on machinery been greater than in the yarn trade, and spinners have been able to command very generous margins of profit. In the first half of the year especially, the Government demand for khaki more than compensated for the loss of the export trade with Germany and Austria, whilst there- was an extensive trade both for home and export in hosiery yarns

such as Germany and France produced in times of peace. Notwithstanding the manner in which markets were l united oy the strict application of embaigoes, spinners were overwhelmed with ousilicss and orders were booked toi months ahead. - Firms which were adapted for French mule spinning could have sold their output over and over

To such an extent ..did the call for hosiery yarns develop that some ot the largest Bradford spinners who had never touched this class of trade turned their attention to it and found an outlet for all they coukl produce in the Midlands, France, and in neutral countries w liicli hitherto had been supplied by Germany and France. The total export of worsted varns for tho eleven months ended November 3u amounted to 11,138,0001 b, of which 3,738,1001 b went to France. For quite a. long period the export, trade was restricted to merino yarns, but as the year advanced cross-bred yarns wore also shipped and in the later months after the khaki boom had waned there was quite an extensive export trade. Earlier in the x-’ar the ordinary domestic trade had been neglected in consequence of the concentration on military needs, but when the latter were practically satisfied there sprang up quite a. big demand for dress goods and coating yarns. Tho acute problem for spinners at the end of the year was the shortage of labour, and most of them were ,in the embarrassing position of having pressing orders awaiting fulfilment and at the same timo spindles standing owing to lack of employees. This promised to bo 011 c of the chief considerations early in the year Some idea of tho effect of inadequate, machinery capacity on yarn values may be gathered from the following prices for a few standard sorts prior to the war and at subsequent periods :

1914. 1915. 3915. July. July. Dec.

MATERIAL

The manner in which wool has been diverted from its usual channels as a result of the war is amply demonstrated by the available statistics. Messrs Dalg’ety and Co.’s analysis of the distribution of Australasian purchases during the wool season 1914-15 as compared with the preceding season is as iolInU't '

* During the war period Russia obtained supplies through Japan.

Messrs Schwartz. Buchanan and Co.’s figures relating to tho London sales, transit wools and direct imports, further illustrate the extent to which colonial wool was diverted from the Continent to the United Kingdom and America. Here are the statistics for the past three years:—

The South American market being the oulv important source of supply tree from British control, was quite a law unto itself, and values became almost prohibitive. German agents bought heavily, no doubt with a view to accumulating supplies ready for the close of the war. In the “ Review of the River Plate” it is indicated that durin" tho season October 1, 1914, to September 30, 1915, the United States took 103,070 bales from the Argentine aS compared with 34.779 bales in the preceding Season. Tho United Kingdom took 77.319 bales as against 43,200, the increase being accounted for by the diversion of shipments winch had usually crone to Antwerp. Nothing was shipped to Hamburg and Bremen as against 85,000 bales in the preceding season, but it is noteworthy that to Genoa was sent 47.600 bales as against bOOO bales. The. amount usually shipped to Dunkirk (72,551 bales in the preceding season was largely diverted to Bordeaux and Marseilles. , The total number of bales shipped from the Argentine in the season cuding September, 1915, was 000,0 l/, -ns a gains'! 305,606 in the preceding season. In addition there Cere bales from Uruguay (over half of wh.eh went to Genoa) as compared with 100,000 bales in the preceding season.

THE OUTLOOK. When so much depends on contingencies arising out of tno wrn futile to attempt to peer into the futuie or adopt a prophetic attitude, fluctuations in values' will m no small measure depend on the attitude of the Government with regard to export facilities, but broadly speaking the de mand for wool products will cor-itinue to keep pace with raw ma enal supplies and machinery capacity. ihe latter depends not merely on the amount of plant available btU on the supplv of labour to keep u Should peace come during the jeai will find the Central Empires hungry for wool and woollen garmeins and some time must elapse before we reach the inevitable period of forced economy Hollowing upon the colossal wastage o An important factor in the near future will be the serious diminution of supplies. Consequent upon the terrible losses of sheep it is' calculated that the now Australian clip will show a decline of 500,000 bales, whilst the New Zealand clip is expected to show a shortage of 40.000 to 50.000 bales. Wool production in the United States continues steadily to decline, whilst there is little hope of any appreciable increase in South Arnca. The flocks of Germany and Austria, estimated at 19,000,000 prior to the war must, have been greatly reduced L the result of the meat famine Looked at broadly from the point ot view of supply and demand, wool seems to be in a strong position.

1-30's Super Lustre, 12 !> 2 7 13 9 2 94 per ftr - 1-16's Super, per lb . 1- Botany (70's tons), per gr ■ 2- Worsted (medium), per lb • 2-32’s . Worsted (medium), per ib . 2-10’s Worsted (me0 3 1 7 8 14 1 s 1 10 13 0 2 10 14 6 3 0J 3 1 S 3J 5 6 6 3 3 10 0 1 dium), per lb . 2 1 2-60's Botany 3 5 EAW MATERIAL SUPPLIES AND

1914-15. 1913-14. Bates. P.c. Bales. P.c. United Kingdom Continent- . 983,353 142,503 61 9 437,550 22 1,233,155 ' G5 U.S.A.. and Canada 234,80S 15 115,196 6 ''Japan, China, r.nd India 81,890 5 20,50-9 1 Local manufac111,817 6 turers 102,152 7

1915. 1914. 1913. Bales. Bales. Bales. Home consumption 1,923.000 96S.000 1,013,000 1.6S9.0C0 sumnlion 212,000 1,6(0,000 American consumption 351,000 160,000 54.000 2.656,000 2,626,000 2,767,000

1915. Jan. Feb. Mar. April. May. June. July. Aug. Sep. Oct, 40-3S-39 39-7-38 38-6-37 n* *1 fi Nov. 39-41 Dec. 43-15 70's Merino . 64's Merino . 60's Super . . 60's Ordinary GO's Cape . . « 58's Cro3S-brecl . • 5G's Cross-bred . 50'e Cross-bred . . 46’s Cross-bred . 40’s Prepared . . . 36’s Prepared . , 3'2's Prepared . * 40's Carded . • Devon 36's • t Devon 3’2's . . Pick Hop?. Tops Best North Hoggs. Best North AVethers . Bpst Yorks. • 26?-27 2e-30 301-33 33 33-37 39-45 45-42-44 434-41 41-10 38-10 12-14 ?o-5?-6? 271-28-29 30-321 324-32 32-6 38-44 44-1-43 424-40 40-39 37-39 41-43? 254-26? 27-28.? 29-1-311 *31? 314-35? 37-42 42-05-42 41?-39 39-33 36-33 40 424 25-4?-64 25-4J-26 26J-8 27-28 271-81 26-281 2,4-31-1 31 29-32 32*1 28?-9-301 304-31-301 31-5 :0 4.» -10-33-4'. 39-38 31-35 36-41 43-39-40 39.38 304-32 34-37? 38?-39-3S 37-35 38-37 38-74 35 O l *0*1*0 374-7 35-35? 32-32? 29-284-29 254-244-25? 234-23-23? 23-22-22? 22-21-22? 22-214-22 ”"o;U-2.3 00*4.22 25-244 21? 21? 184-18 18 18-17? n? 1 21 21 18-17? 18-17? 19? 1 ni 37-40 354-38 32?-36. 29-32 42-43 39-41 36-37 25J-27 27-27$ 27J-29$ 29$-30-294 29J-29-31I i 32-35? 36-35 335-32? 32J-32 321-33 24-251 21-231 19-21 18-191 171-18$ 18-20 19 111 20-211 161-17$ 16-17? -44-14-141 26-261 231-24$ 21-23 20-2-2 20-19-211 181-19 22-23-231 17$-18 17$ 141-151. 264-28$ 25-27 23-26 22-21-23 23-211-24 19-23 23.J-26? 1-3-19 17-$-10? 151-18? 28$-2S? 27-264 26-25 2 "2-14-2-1’ 21 24 21 ■ 23 264 19-20 191-194 18? 284-30 264-27 5-24J-25? 24-234-25 23-224-23? 24-25 21-23-21 23-22-23 26?-25?-27 20-19 19J-1S? 185-17? 31-33 33-31 30J-30 27?-29 29-27 264-26 26- 2G?-25 25-24 25-25 ? 2o?-24 04.03 23? 23?-23 23-22 23 25-214 24.4-22 25-254 254-25 214-24 23-23? 24-23? 03 27- 28-2(44 264-054 195-205 205-21 -21 19-204 Qoj.21 2 1 17J-19 19 19-18? 30-29 26-25? 24-23? 2,3 22 22 24-234 03.oof 254-25 21-21? 21-21? 18? 254-27? 23?-2o? 221-24? ooj-23? 00.00.1 23-24? 22-23? 214-27? 21?.22 214-1-2 is‘-is$ 18-1S1 28-29 26-26? 25-25? 24-24? ”214 25 24 28 22 22 18$-19 184-18$ Best Yorks. Ax’ ethers . Lincoln Hoggs. Lincoln Wctlior. 1 * • 14J-141 14>-l-4-14? 141-141 141-151 141-151 141-15$ 154-18? 154-18 152-18 161 18-17$ 18 18?-17? 173-17 172-17 173- 19 19-1S? 174- IS? 181-18 174-18? 184 1S5-1S 181-18 IS 1S-17? 174-184 17.J-1S? 21-21? 18J-19 184-18$ 21? Orel. Half-bred Hoggs Ordv ?-bd. AVethers . Notts Hoggs. . Notts AVethers Selected Irish Hoggs. 161-171 161-171 14J-141 14-141 loi-Jf'l 171-18 171-18 141-154 141-15$ 161-16$ 16-19 18-19 15216M9 ‘ 19-194 19-194 18 18 19-18? 19?-1S? 19J-1SJ 1S-17 18-17 184-174 19-20? 20?-21 21 19-204 204-21 21 174-18? IS? 18J-1S 174-184 18? 184-18 18-19$ 19$ 19^-195 21 21 18 18 194 21-21? 17?-1S? 174-18? 19?-20 19?-20 201-21? 22-224 21? 184-19 184-18$ 20-20? 20-204 Seleoted Irish AV’thrs. Selected Kent AV’thrs 151-161 161-171 161-16$ 17J-171 16$-19 174-19 19 19-20 20-18-19$ 19$ 193-19? 19?-20 20-20? 205-20$ 19$ 20J-20J 20 i 214 •23 Pick Shrops. Hoggs . Pick Shrops. AV’thrs Wilts. Down Tegs . AVilts. Down Bxves . 181-19? 161-19? 18-19 1S-19 191 19J-20 19 - 19 , 19? -20-21 20-21 19-21 19-21 21 -22 21-22 "21 21 22-21 22-21 2M9? 21-19? 214-204-22 22-23-22 22 *214-22 22-23-22 00 194-22 22-23 23 19*4-23 22-23 03 22 2.3 23 22 23 23 14? 14 15? 22-22? 23-22? 23-224 14? 14 15? 23 22? 22? 114 Ordinary AVelsh Mohair —Cape lsts Mohair—Turkav Avre. 121 111 141 121-131 111 141 131-14? 11-13? 14J-15i 14? ' 13? 15? 14J-134 13? 15? 134-11 14 14-44? 13? 13?-14 14' 15? 15? 15? 14? 11 15? 14' 16?