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Matamata Record, Volume XIX, Issue 1791, 15 December 1936, Page 4

THE WOOL SALES THfS t wool .sales , in . the Dominion began with the sale in Auckland whicji exceeled expectations. It was generally expected that prices would be substantially higher ' than last season, but - no one expected them to skyrocket as they have done. . A rise of 60 per cent, is substantial and sensational and clearly indicates that there is an unsatisfied demand for the staple. Perhaps it would be more correct to say that the supply is tending short of the demand. But the sensational rise in values cannot be accepted as a true indication of the market trend. There appears to be a special reason for it, and that reason is supplied by Japan. The Mercantile Gazette says: It will be remembered that owing to a tariff quarry, with Australia, an embargo has been placed on Australian wool by the Japanese Government, and Japanese representatives have not openly purchased wool at the Australian sales, but there is reason to believe that they have secured some Australian wool by other methods than by open buying. The quantity thus secured by Japan must be well below her normal requirements, to keep her machinery in operation Japan must have wool regardless of cost, hence the feverish buying at the New Zealand sales. Whether Japan can keep up the pace is quite another matter. We do not think she can. Japan's command of foreign credit is not so extensive that

she can squander her limited resources. It is very probable that as soon as she secures a given quantity, or enough to put her mills into full work her competition will ease down and prices with it. An extreme market price is unhealthy, for farmers have a disposition to budget at the highest level of prices under the mistaken belief that they have come to stay.

However, if there is a recession in values it cannot be very much, at any rate the wool-cheques this season should be appreciably larger than for the last; but sheepfarmers will want all the money they can get, for the income-tax and land-tax will eat deeply into their woolcheques. The experience of wool since 1931 is romantic. There were three consecutive seasons when the average price was 6d per lb. and less. Those were the days when there were “ drives ” for old left-off clothing, which seemed to be in better demand and more prized than wool. When the rearmament race in Europe began and more men were called to the colours a demand for wool was noted. And as more workers found jobs, as they were bound to, with armament and allied industries active, there was a demand for clothes other than second-hand, then the wool industry began activity. Since it will be another yea* or two before the armament race will have ended we may expect wool to continue in good demand. The current wool season should be one of the best experienced in the Dominion for the past five or six years.