WOOL PROSPECTS

New Zealand Herald, Volume LXXII, Issue 22192, 20 August 1935, Page 5

WOOL PROSPECTS

FAVOURABLE POSITION DANGER OF HIGH PRICES MEETING THE MARKET Discussing the outlook for wool during tho coming season, the Sydney Morning Herald states that, duo partially to tho decreased supplies of Merino which will be shorn, and also to the largo consumption encouraged by the low prices of last season, prospects for favourable values are very promising. The hope is expressed that the trade abroad will not develop the "fever" in regard to supplies which in some years has produced more or less boom prices. The latter have eventually proved disastrous by curtailing the use of the staple owing to tho selling figures for woollen goods becoming too high for public purchasing power. Welcome though high returns would be to the growers who received them, tho risk of a break in the market during tho course of the selling year would be great. From the broad aspect of the welfare of the sheep industry, the benefit of a period of extreme rates is questionable. Tho financial troubles which h;ue beset many landholders are due to the injudicious purchases of land at excessive prices when wool values were high. In addition, rates for sheep follow the wool market if feed conditions are satisfactory. When the inevitable setback comes, those who have bought find themselves with over-costly stock, which prove unprofitable for woolgrowing, and which can bo nold only at a heavy loss. Tho person who suggested legislation preventing the sale of wool beyond a certain figure would probably be regarded as demented, but li,is idea would show a better regard for the future than the proposals ofteii made in depressed times to fix the price >of the staple and to hold up its sale in an effort to do so. The latter scheme gives no consideration to the fact that accumulating stocks upset buyers' confidence and must prevent prices from recovering, irrespective of who holds them. The results of the schemes of the Canadian and United States Governments with respect to wheat offer convincing evidence of the futility of that action. While an appreciable improvement on tho average obtained last season is desirable and probable, an extreme level of prices is not warranted by present world circumstances, and would be likely to produce eventual ill results.