LOW PRICES FOR HEMP.

New Zealand Herald, Volume XLVII, Issue 14566, 31 December 1910, Page 8

LOW PRICES FOR HEMP.

PROBLEMS FOR FLAXMILLERS.

MILLS CLOSING DOWN.

A telegram from Wellington, published in yesterday's issue, indicated that on account of the low price of New Zealand hemp on the London market, some of the mills in the Manawatu and other districts would not. reopen after the holidays. Inquiries made amongst Auckland merchants yesterday indicate that the same unsatisfactory position exists in Auckland province as in other parts of the Dominion in respect to the hemp industry. Several mills have been compelled to close down and others will probably not reopen after the holidays. One merchant said there would be only half the number of mills at work after the holidays in Auckland province that there was last year, and another said the number running would probably be reduced to five. Those would be mills that were in a position to produce most economically on account of their situation and their size, but even though only the smaller mills closed down, a number of men would be thrown out of employment. The reason for a slump in the industry is obvious from a glance at prices being obtained. In the early part of the season the figures were equal to £19 for " fair," and £21 15s for "good fair." These prices were not tempting, but millers hoped for better things. Instead, prices have declined until they now stand at about £15 15s for "fair," and £16 16s for "good fair." At these prices several of the millers have made serious losses during the past few months. An unfortunate feature of these prices is that they have synchronised with an improvement in the quality of the hemp coming into Auckland. In the early part of the season millers could hold off closing contracts at current rates, but row fair stocks are on hand and this has made the position more acute.

The reason given by merchants for the low prices offering for hemp is that there is overproduction, especially in Manila. In 1905 the output of fibre from Manila was 904,000 bales. It has steadily risen until during the past year it must have been about 1,300,000 bales. In addition to the large output of Manila, New Zealand hemp has suffered from the competition of sisal, a Mexican fibre which is being placed on the London market in increasing quantities.

Merchants appear to be pessimistic as to the immediate prospect of the hemp industry in New Zealand. The first thing that would bring Jitter prices would be ii reduction in hi ,.output from Manila, and there is no 'reason to anticipate this. The prospects would be improved by the introduction, of labour-saving machinery that would lower the cost, of production in New Zealand, and earnest attention is being given by many manufacturers to this aspect. It is suggested that a capable man should bo sent to Manila to study the conditions there, and report for the benefit of the New Zealand manufacturer, who is much in the dark as to what is the lowest price at which profitable production in the Philippines is possible.