THE WOOL TRADE

New Zealand Herald, Volume LXXIII, Issue 22434, 2 June 1936, Page 5

THE WOOL TRADE

FIRM MARKET EXPECTED

REARMAMENT PROGRAMMES IMMEDIATE OUTLOOK BRIGHT [from our own* correspondent] LONDON. May 13 Two factors are influencing the London wool market and are considered to have caused the steady rise in prices. Wool brokers anticipate that the market will remain firm and probably appreciate by 10 per cent during the next six months. One factor is the geners;! rearmament programmes in Europe, which means a, steady demand for uniforms by central European countries. Crossbred wool is required for this class of manufacture. The other factor is a reflection of the preparations for King Edward VIII.'s Coronation next May. Orders are pouring in for bunting to line the streets on the day when he drives to Westminster. This demand has meant a run on coarse wool.

lhe carry-over of last season's stocks has been reduced to a minimum aiid contracts placed by tho British fighting forces, although larger than in the past few years, are expected to be bigger as Britain's rearmament programme proceeds. Although France and Germany are buying far less wool than a few years back, it isi generally considered that the immediate outlook for wool is bright.

Wool substitut-es are being used by manufacturers to keep the price of finished articles at a fairly low level. The depression is recognised to have developed in the public a habit of buying low-priced goods. Although economic conditions have improved materially there has not followed that rise in purchasing power to tempt the buyer to seek higher-priced articles, and an increase in the price of woollen clothing is invariably followed by a slackening of sales and a quest for cheaper substitutes. Manufacturers also add a larger percentage of substitute material to woollen articles.

There has been a slackening in the demand for crossbred wool by Russia, where domestic flocks have been considerably increased of recent years by an influx of New Zealand rams and with the advice of New Zealand pastoralists. Russia's wool demand;; are narrowing gradually to Merino wool. It is general comment in London that the standard of New Zealand wool is. by no means as high as it was in former years, and a deterioration in quality has been noticed, particularly during the past three or four yearn. This is accounted for in part by New Zealand using her sheep for a dual purpose, both wool and lamb, and also by tkie assumption that the low price of recent years has given no encouragement to farmers to maintain the standard of their flocks.