Manawatu Daily Times Australia and Wool

Manawatu Times, Volume LV, Issue 7134, 4 February 1930, Page 6

Manawatu Daily Times Australia and Wool

The drop in wool values which has been characteristic of the present season is causing considerable perturbation in Australia, sufficient, in fact, to have induced growers and brokers to arrange a conference at which the situation will be discussed. There has, of course, been a corresponding movement of prices in New Zealand. It has been duly noted by all who watch the economic prospects of the country (says the Auckland Herald), and has been counted among the "factors which make economy and prudence, especially in public expenditure necessary at the present time. Wool figures largely enough among the exported commodities on which New Zealand depends to necessitate due heed being taken of the market conditions. It is not, and on present tendencies is never likely to be, so important, either in absolute bulk or in relative value, as it is to the Commonwealth. Recognising the high place wool took in Australia’s export list, the British Economic Mission which visited that country last year, said: “Australia exports only an almost negligible quantity of the products of manufacture, unless wo include therein minerals such as lead, silver and zinc; while, broadly speaking, the only primary products she exports in important quantities which are not directly assisted by tariffs or bounties are wool, hides and skins, meat and tallow, wheat and timber. “Of these, wool and wheat are by far the most important, and' it has often, though somewhat loosely, been said to us that the primary industries concerned with these products are the only industries in Australia which stand on their own feet and sell their goods at the world’s price; or even, still more loosely and with a change of metaphor, that all Australia is riding on the sheep’s back.” The mission, without endorsing this view fully, accepted the broad generalisation expressing the importance to Australia of the wool output, and the price realised for it. It is, in fact, the outstanding feature of the economic life of the Commonwealth. The actual position which has exercised the minds of those directly concerned in disposing of the clip can be ascei'tained fiom several factors. The average price realised for greasy wool sold in Melbourne from July 1 to December 31,1928, was 17.03 d. The average prices for wool sold in Australia during the last four months of 1929 were: September, 10.04 d; October, 10.35 d; November, 11.89 d, and December, 11.04 d. An exact comparison cannot be made from these figures, but the indication is plain. For a considerable part of the 1928-29 season, sales at one important centre produced an average of not a great deal less than Is 6d a pound. A portion, and a significant portion, of the 1929-30 season shows, for all Australia, an average of less than Is a pound.

The growers and brokers are to discuss limiting the offerings further This will reserve more wool for what may become a better market’ but the curtailment itself cannot give any assurance of a better demand. The market has not been flooded this year. For the current season to the end of December, 2,250,979 bales had been received into store and 974,495 bales sold. For the corresponding portion of last season 1,209,084 bales were sold. The prospect, moreover, is for a smaller clip when the season is complete than there was last year. The latest estimate is for a total of 2,535,000 bales for the current season, a decline of 111,000 bales, or 4 per pent, on the figure for 1928-29 There is also a prospect of a loss in weight estimated at 101 b. ~a bale, a factor of importance seeing that wool is sold by the pound and not by the bale. The position is, then, that a falling market accompanies a lower gross output, a point which suggests that mere limitation of offerings cannot promise to awaken buyers to renewed activity. The most optimistic forecast, made at the beginning of January, was that there should be no marked backward movement. So far the detailed position affects principally those who depend directly on wool production and sale for their livelihood, though the expectation of a smaller clip strikes a note of wider application. The part that wool plays in the export trade of Australia has been referred to in the extract from the report of the British Economic Mission. Its importance there is emphasised because it is chief among the commodities which enter the markets of the world without aid from tariff or bounty. Its value compared with that of other commodities is outstanding. The clip of 1927-28 was valued at £75,634,000. The value of wool exported was roughly £66,100,000, out of a total of £141,595,000 for all classes of exported goods. The other product mentioned by the British Economic Mission as being wholly independent of artificial aids, wheat, represented £14,630,000 out of the grand total, with flour adding £5,229,000. Hides and skins contributed £9,895,000, gold £2804250, lead £3,512,000 and meats £4,811,000. As these are the outstanding items in the list, the citation of them throws a sufficient light on thß position of wool holds as the dominant export commodity for Australia. Its prospects in the current season and the immediate future underline all that has been said about the need for taking stock in the Commonwealth, for watching the volume of imports closely, and for reducing expenditure wherever possible in order that the straitened circumstances indicated may-be met and the financial health of the country safeguarded. The position is one to be taken seriously by’ all who regard the national welfare with a due sense of responsibility. The final deduction from the consequences which can be expected to follow this decline in the chief source of income is that industrial disturbances such as are in progress could never