LONDON WOOL SALES

Marlborough Express, Volume LIV, Issue 190, 12 August 1920, Page 6

LONDON WOOL SALES

GENERAL DECLINE IN PRICE

OF RAW MATERIAL

l (From Our Special Correspondent). LONDON, June 3. J We are once again in the throes of 5 another series "or London sales and the opening is by no means very auspicious. Since the last series in Coleman Street, there has been an auc- " tion sale in Liverpool, where -prices I declined 10 to 15 per cent. A sale of J Hull shown wools took place in Brad~u lord la-st Friday, when a further de- ' cline of 10 to 15 per cent, took place, 5 hence the trad© was prepared for «i ; weak opening last Monday. Great 3 hopes have been expressed in regard 3 to the attitude of Continental buy- • ers, who, on account of a more fa.vor--1 able exchange, it was expected would 3 be la.rge operators. Perhaps the wish 5 was father to the thought in many cases, and indeed they have come to > the front in a much better way than • at the two previous series, undoubt- > edly due to a distinct improvement - in exchange rates. Had there been a i- more settled feeling and had finance ' generally been better, there is no > doubt that at current prices we - should see a very extensive buying s movement, but the home trade ap- . pears to be distinctly on the defen- ; sive and ill prepared to purchase extensively. Even the Government themselves, at least those responsible for offering the wools, 'are very apt prehensive, and the abolishment of 1 all sales "by description" clearly l, proves that they are disposed to help : the trade a little. The writer is of ' opinion that it would have been as > v/ell if the current- series had only I lasted a fortnight, but the arrange- > ments for three weeks' selling clearly ■ indicates that they want to put as t much wool on to the market as is > possible. That really is the position to-day. It looks as if the home trade is well supplied with wool, and thero is hardly a firm but what to-day is gravely concerned about the future. That values have suftered a sharp .setback during the past month goes without saying, and there never was a series of London sales yet but what o, weak interval reacted very materially upon the course of value in Bradford. MERINOS DECLINE SHARPLY. There was a particularly large nt- : tendance of buyers at the opening lost Monday, both home and Continental representatives turning up much better than anyone could have, expected. It was patent that a, good number were there very largely as ■ spectators, being anxious to ascertain the standing of the raw.material. Those who had the courage to buy secured some decent wools without paying an extravagant price; in fact, the reverse was tho case. For instance, a well-known New South Wales clip, Bang-ate, only realised 40d for grease combing; Llangolian sold at 56£ d, while New Zealand greasy combing of the S-truan mark realised 41d and tfoolardy from West Australia, realised 551 >*d. These are prices which must be. <-onsidered rea- j sqnabie, and clearly indicate a decline j of fully 15 pev cent, on last sales closing rates. There was considerable reserve in the room a«d withdrawals were very numerous. The top price of the day for greasy merino combing was 68-Jd and this parcel would easily have made more than 80d in March. That clearly indicates weakness and the same was in evidence in the few lets of scoureds that were catalogued. The opening was very unsatisfactory, and to be frank, there has been nothing like it for many years, in fact one has to go back to 1908^'to sec anything like the opening that took place last Monday. Slack, listless, with indisposition even to bid, characterised the attitude of the majority, and but for France the sale would have been nothing 811011) of a fiasco. ■ Possibly there Avill be better sales following, in fact Tuesday's and Wednesday's auctions showed an improved spirit without values moving any higher, but the auctions this week have' been smything but what can be called creditable, and ii the present attitude of the trade is anything to go by, it looks as if \alues are in for a serious fall. THE FALL IN CKOSSBREDS. When we come to crossbreds, the same record of decline has tobe chronicled. Fine qualities are 10 to 15 per cent lower, largely in sympathy with merinos, medium declined about 5 per cent, while coai's-e were about 10 per cent easier. In fact scoured and sliped erossbreds wero also 10 to 1" per cent, cheaper compared, with tho previous series. So long as the home trade remains the chief buyej of crossbred?, the opening decline cannot be expected to show any improvement, and as- far as one can sec there is likely to be no sensibly improved call for crossbreds tuitil there is a greater demand on Continental and American account, the call on behalf of the latter being distinctly disappointing. There >eemed to the writer to be no redeeming fea~ ture whatever in connection with the opening of the .sales, but France is expected to remain in the field as a liberal buyer throughout the entire scries because the exchange continues to show an improvement, and with French interests being largely supported by Germany, which to-day is providing a good outlet for the raw material, France can bo looked to for activity during the current auctions. FINANCIAL STRINGENCY. There :>s no question of a. doubt that the distinct setback in wool values is largely due to financial reasons, for whichever way one turns, we are faced, with the fact that money is tight, both here, in America and Japan. Mr Harry Dawson, rightly says that the "dramatic restriction of credits by banks, although it has crippled all legitimate business, will winnow out the speculative olement, and after a few forced realisations will make the Market sounder." Everybody in business knows that banks have'been restricting _ credits for the past six weeks, legitimate-1, busincfc-; lias been lost, and a. good many firms would have remained ih the'field, as buyers ii: banks had boon' willing to stand by their customers /as usual. One must admit that tho- .present setback in values is bound to do good, although nobody likes to set.- their stock worth less than it cost. That is the crux of the whole question. The .writer is disposed to say that the majority uould not demur a grevt deal at the reduction in values, but for the stoppage of trade which it has brought '■about, and instead of there being a regular flow of business ,-'.s we have been accustomed to sec during the past twelve months, lit hie indeed has been done since the end of-March, j Cancellations of. orders have, hv.-.n very common, pnrticiiliirh 'at she ' piece end of the tr.-'dp, Wit- whr>n nil is .said ami do»<* if j;- the. financial • (lilficulty which i- ili«. w,\\ disturbing uiclor. A;,;,,!);» homo i.rado houses, pnvi |~, n ~|,i;- ;i,. ~j ,i, liveries have been <•"•>':<■■!<■<; liy ,i -i;oc? Nf.-'uy,, and ihu

that production is about equal to consumption. What to-day is wanted is a restoration of confidence, and throughout the trade everybody feels that the recent British budget and xhe vacillating policy of the Government in regard to a, levy on war wealth and the Excess Profits Duty hfi<s to a very large extent knocked all incentive on the head. However, behind all the temporary adverse factors, there is real ground for confidence. Bradford shipping houses, who probably are in closer touch with conditions on the Continent than anybody else, know that there are big gaps yet to be filled; in fact if German wool houses could come into the market in their pre-war style, there would soon be a radical change. Big weights of wool, tops, as well as yarns are still wanted, in fact half of Europe is still at tho "band end" for clothing, and if all speculation has now been shaken out of the market, it will tend to the re-establishment of confidence, and lead to an improve>ment. It is possible that cheaper sorts of wool will be given a chance with the improvement in Continental exchanges. The fact that .many people have now banned the highesb prioed clothes will lead to greater support of medium crossbredsi, and we tliink that these being only 5 per cent, under last sales rates, offers an illustration of the attitude of the trade towards these wools. There are those in London with an extensive Continental connection who are confident that we are going to see a gradual and substantial enlargement of trade with Central Europe and there is nothing to indicate any falling off in work for our mills.