THE WOOL MARKET.

Manawatu Standard, Volume LV, Issue 246, 14 September 1935, Page 5

THE WOOL MARKET.

(Contributed.)

On Tuesday evening next the fifth and penultimate series of London wool sales will begin, and in view of the advance that has taken place in Australia, amounting as in the case of the Adelaide sale's to 25 per cent, the London sales are bound to show an equally pronounced advance; indeed, it is just possible that the advance may be relatively higher, for users will no doubt feel that they will be left if they don’t get in supplies early. The changed tone of the -wool market as compared with last season is due to the marked decline in the output of Merino wool. Supplies of this grade of wool come mainly from Australia and South Africa. The reduced output in Australia is estimated at 276,610 bales, and the reduction in South Africa to about 300,000 bales, making a total reduction of 576,000 bales, which is an appreciable shortage. The trade preference is for Merino wool and owing to this estimated shortage a strong demand has set in. Users became aware or the probable situation towards the end of June when shearing was about to begin in Australia and this was reflected in the quotations for tops, inese prices compare as under:—

June 12 Sept. 5. Rise Per II). Per lb.

The rise is substantial in respect of tho higher counts, but crossbred sorts show a relatively poor advance. It would be to our advantage to see Merino tops go higher for then users would lx» obliged to turn their attention to crossbreds. A swing in the demand for crossbred should" improve prices for them. Millmen are bound to produce some attractive fabrics out of fine and medium crossbred wools, and on present appearances this class of wool should see an-advance of about 20 per cent, on last year’s prices. However, it is rather early to. forecast the probable trend of our crossbred wool for shearing has scarcely started anywhere in the Dominion. The New Zealand sales do not begin until towards the end of November: in the meanwhile we will have the results of the September London sales, also some part of the London November sales. At all events our woolgrowers can look with confidence for larger wool cheques this season. Owing to the large carry over of 164,000 bales the quantity available for the market should range between 700,000 and 750.000 bales.

At the close of the July series of London sales the prices ruling were, according to Dalgetv and Co. as follow :

LONDON BUTTER MARKET. There has been a sensational advance in the London quotation tor finest New Zealand gutter since the beginning of the month. The upward price movement began early in July, and steadily advanced from 89s per cwt on July 3 to 98s on August 28. A rise of 9s over a period of two months is nothing extraordinary, hut in the first ten days of the current month the price rose to 112 s, an increase of 14s per cwt. or about 14 per cent., which is sensational and abnorinn!, and one is curious to know the cause. It is probable that for the moment the supply is not equal to the demand, or that merchants in London who must take a long range view find the statistical position against them and have made an early start t-.. get in supplies. When the present buy inn spurt ends the market will ease “hut that should not cause any anxiety, for over the season prices on the average will he many shillings, it not pounds, above the average of last season. _ , , , The rise in price is due to actual and prospective shortage of supplies. Owing to adverse weather conditions the output from Australia will be. appreciably less than in the past season notwithstanding the stimulus provided bv the Paterson plan, and it is probable that the European supplies reaching the London market have been less owing to the dryness of the summer. The latter would have caused a reduction in stocks in addition to which stocks of New Zealand and Australian butter held in London have contracted very much. _ thus it is quite clear that the rise is due to shortage of supplies stimulated by fear that the shortage may be greater than anticipated. New Zealand, unlike Australia, is likely to show a substantial increase in output, and as local prices must be raised to conform to London parity consumption is certain to contract, which of course would leave more for export. That our output will expand is indicated by the official statistics for the first seven months of this year. The quantities and values compared with the corresponding ' term of last year are as under: Seven Months Ended July 31.

The above figures show a small increase in production but the increase in value is fairly substantial, due to a slight improvement in price. In addition to the above dried milk yielded £158,981 against £207,445, and milk and cream preserved, etc., £49,903 against £39,320. AVe must recognise that nature has been almost wholly responsible for the improved outlook by staging a dry summer in ICurope and a drought in Australia; all the same the promise is that the new dairy season which has just begun will be a profitable one to the dairy industry. The present price of 112 s sterling is equal to 140 s New Zealand currency. There is a prospect that London quotations will go higher for the market is reported firm. There is scope for a further rise when we- remember that the price in July, 1914 (pre-war) was 118 s, but economic conditions then were stable and international trade was normal and functioning under the

gold standard. To-day only a fow countries are on gold, currency, exchanges are in a chaotic state, and international trade is difficult in consequence. As tho wholesale price advances in England tire retailers in the country will he compelled to put up their prices, and that will tend to check consumption and cause stocks to accumulate. Against this, however, there is a prospect that our blitter trade will revive. Prior to 1931 Canada was sending large quantities of milk and cream across the border to the United States. This business came to an end when the HaivleySmoot tariff of U.S.A. was put into operation. Canada was then obliged to convert her surplus milk supplies into butter and cheese, and naturally preserved her domestic market for her own dairymen, and therefore placed an embargo on imports from New Zealand. It is now reported that Canada and tire United States are arranging a reciprocal trade treaty and Canadian milk and cream are on the list. If Ibis treaty is implemented the Canadian market should again he open to us; if so that would prevent any excessive accumulation of stocks in Britain. As we see the position to-day the outlook for the dairy farmers of New Zealand is distinctly good, better than it has been during the past three years or more.

70’s d. d. d. 34 3* 64’s 32 4 60’s 30* 4 56’s 20* 2 50’s 14 15 1 46 s 121, 1* 40’s 10 102 02

Hnlfbred— d. 56's —58’s : d. Good to super 13i to 14£ Low to medium 10i to 12£ 50’s —56’s : Good to suiier 93 to 113 Low to medium 8 to Fine Crossbred — 48’s—50’s: to 9 Good to super Si Low to medium 02 to 8 46's—48’s : to Good to super 8 84 72 Low to medium to Crossbred — 44’s —46’s : Good to super ... n to 8* Low to medium 6i to 7 4 40’s—44’s: to _ Good to super ... 7£ •4 Low to medium 6 to 7 36’s —40’s : Good to super 6| to 7* Low to medium oa to 62

1935. Cwt. £ 1.613,105 6,985,484 1,093.449 2,632,868 Casein 35,321 89,739 2,741,875 9,708,091 1934. Cwt. £ 1.571.417 5,935.911 1,256.719 2,920,360 Casein 34067 92,480 2,662,203 8,949,251