OUTLOOK FOR WOOL.

New Zealand Herald, Volume LXVIII, Issue 20762, 3 January 1931, Page 5

OUTLOOK FOR WOOL.

HEALTHIER TONE EXPECTED. AN AUSTRALIAN VIEWPOINT. SHARP RISE NOT LIKELY. With the Auckland wool sale only a fortnight off graziers and farmers throughout the province await, the resumption of auctions next week, both in New Zealand and overseas, with more than usual interest. Reports from all centres relative to the final sales of 1930 express satisfaction at the close of what was a most disappointing year, but almost without exception voice the hope that 1931 will fir.d a far healthier tone in the wool trade. The crossbred market in New Zealand is adversely affected by competition from (he Argentine, where the exchange at the moment favours buyers to the extent of 20 per cent. An interesting commentary on the wool outlook has been released by Winchcombe, Carson, Ltd., the well-known Australian selling firm. "In 1900-1," states this firm, "the greasy wool sold in Sydney made an average of s|d per lb. That is the lowest price recorded for the past 30 years. During the following year tho average was 6d, and by 1906-7 reached Some mild variation wan subsequently seen, but the figure for 1912-13 season was 9W, the highest rate secured between 1900-1 and the war. The drop in prices during the past five years is without parallel in the history of the trade. Its extent is due to tho high level to which rates ascended, the peak average point, 25£ d, being reached in 1924-25. Past records covering normal periods do not give any encouragement to tho belief that a rapid rise in prices will bo experienced after the current run of low values. A decided rise was seen after the 1921 slump, but that advance was largely caused by the issue of paper money on the Continent. A rcpetitiop of that action is not likely. The Continental countries suffered too severely to wish to see it repeated. Factor of Uncertainty. "The great difficulty is that no person can now state with any degree of certainty what the world's normal scale of prices will be. Practically nil raw materials have receded in value to below pre-war levels. We hope that, prices will not remain permanently even on a scale as low as pre-war basis. But nobody at present can guarantee that they will not. To a great extent that is why world trade as a whole is in its present condition. Manufacturers and traders abroad havo for a long period been operating in hand-to-mouth fashion. They have been uncertain as to whether production of wool, cottqn, wheat and other foodstuffs, metals, etc., would continue to rise, cause stocks of them to - accumulate and as a result depress prices further. "Sooner or later fears in that regard will be allayed, and they appear likely to disappear more quickly with wool than with most other raw materials. Fortunately a policy of ready wool selling has been pursued, and no surplus stocks of that raw material havo accumulated. When business starts to look un the.absence oi them should strengthen the selling position, with gradual good effect on prices for the staple. "The woolgrowing industry can with decided heartiness say good-bye 1930, good luck 1931. Between the first sale of January and the closing sales of last week values for the staple have receded 30 per cent. On several occasions the wool market, in common with markets for their raw materials, has displayed spasms of returning buoyancy, but those modest revivals have not been maintained. Wool consumers in turn waned in the strength of their buying. Favourable Turn Expected.

"Japan, Germany, Yorkshire, America, Italy and Belgium one after the other purchased in diminishing volume, while France continued buying. The latter country has latterly gone more or less into the doldrums but some of the former, particularly Japan, and to a 'lessor extent Germany, have recently bought in larger quantities. In times when events proceeded in more orderly sequence we could confidently assume that improved purchasing on the part of Japan and Germany meant that the downward curve had run its full course through every division of consumers, and tho trend would now be upward. But disappointments seen during the past year make signs of optimism dangerous. A definite favourable turn, however, will unquestionably develop sooner or later.

"The one satisfactory feature about the market has boon the fact that at all times wool has been readily saleable. In that respoct the depression experienced has net been as irksome as some of its predecessors. Even tho faultiest lines have found willing buyers at n price. In fit least ono previous instance the staple as a whole was unsaleable, and in others, tho less attractive offerings were right out of demand. Tho fact of the raw material finding purchasers, apart from the advantage of producing ready money, clears tho road for better sales when the world is in more normal business order." BRADFORD TOPS. LONDON, Jan. 1. The market is quietly firm, with crossbreds slightly moro active; 64,'s are quoted at Is lOd per lb; 60's, Is 8d; 56's, Is 3d; 50's, Is; 46's, 9i}d; 40's, 9Jd. AMERICAN GRAIN MARKETS. PRACTICE OF SHORT SELLING. WASHINGTON, Jan. 1. The opinion that short selling on tho grain exchanges will ultimately be eliminated was expressed on Thursday by the chairman of tho United States Farm Board, Mr. A. Lcgge. He made it clear that ho favoured tho restriction of short soiling rather than total prohibition. 1 Mr. Lcggo expressed doubt, however, that short sales could over be restricted. Properly regulated, tho grain exchange has a useful function to perform, he said. AUSTRALIAN FARMERS. DEBTS FOR FERTILISERS. SYDNEY, Jan. 2. A serious position is arising in the fertiliser industry owing to tho succession of unfavourable seasons. During the last fow years companies engaged in this business had to extend the utmost consideration to their customers. The limit of credit has now boon reached, and some new basis of finance must bo arranged for tho planting season this year. Recent statements of accounts issued by the principal companies show that their outstanding accounts with storekeepers or farmers amount to £2,000,0 CX). Many of the accounts .have been owing for three years.