POSITION OF MERINO WOOL

New Zealand Times, Volume LXXI, Issue 4407, 13 July 1901, Page 4 (Supplement)

POSITION OF MERINO WOOL

Th 0 course of values for fine-haired wools during the Past mouth or six weeks serves to show that tho market for these descriptions of the staple is gradual! yfreeing itself from tho troubles which resulted last year from the remarkable outburst of speculation to* wards the close, of 1899. Throughout the whole of last year the ordinary laws’ of supply and demand were practically suspended so far as merino wool was concerned. In spite of good general 1 trade and a largely diminished supply of these qualities consequent upon a suo-' cesson of droughts in Australia, war itt 1 South Africa, and the extension of cross.' breeding in South America, prices foil l to an alarming and unprecedented ex** tent, and the past eighteen months has unquestionably constituted the most disastrous period ever experienced by those engaged in the wool trade. Tha depres-' sion, which was universal at one time, 1 became so severe that it was found, necessary to abandon one series of sales in London, and very great difficulties were met with in all directions in financing wool purchases, shipments and imports jnjo London. Failures were of everyday occurrence in all. the leading wool centres of the world, and in numerous instances the liabilities of the houses and concerns which became involved by the enormous depreciation in 1 the wool values ran into colossal figures, ■ particularly on tile Continent. All this was some time ago seen to have been' due to nothing more or less than overtrading on the part of some sections of the trade. Continental dealers, topmakers and merchants, in endeavouring, to forestall users by coming into the Australian and River Plate market# and securing the bulk of what was known to be a

SHORT SUPPLY OF FINE WOOL,

simply made commitments quite unwarranted by the amount of capital they themselves possessed, or which .they could obtain the use of from the hanks 1 or other institutions, and the boom in, wool, like ad its predecessors in this or other branches of commerce, speedily burst. In the meantime the speculative element has not only ruined the market l and those who were foremost in taking part in tho game, but a great number of the best and oldest houses engaged, in the handling of wool as well. Manufacturers who had been working un large quantities of merino wool quickly turned their attention to other kinds of raw: material as soon as they found that flue wools were not only .too high in price, hut for pome time after the col* lapse of the boom, quite unstable iqi value. This was not a difficult thing to do, for an abundance of cheap crossbred wool was going begging for buyers. These varieties of the staple were worked on by those who feared tip touch merino, and it thru looked as though fashion; had changed suddenly to the disad vantage pf the great bulk of Australia*! wooh Bate advices from the industrial centres of Europe, however, indicate that merino fabrics arc now rapidly asserting themselves'once mere, and that materials made from coarser woofs ar» pot at all in favour. Prom this it may be inferred that what took place last year was not really a change m fashion) demanded by the wochconsumiug people of civilised countries, but a chanxej which was merely temporarily- forced on them by manufacturers, who, so long as the price pf fine wool was either phenomenally high or fending downwards rapidly, carefully avoided its u** as far as possible. It may suit the, wool dealer or speculator to fallow th* market whichever way it goes; but, generally speaking, operations even onl this account will be of greatly reduced volume when prices are declining by leaps and bounds, as was the case from January to November last year. In! such circumstances the prudent manufacturer as well as the cloth merchant 1 will certainly prefer to stand aloof rather than risk oiling up stocks, of goods, the cost price of which is quite unlikely to lead to business at figure* which will cover the cost of production. In these important branches it is recognised that so far as the groat hulk of consumers are concerned it is useless, to look for more than a certain price; * that anything beyond that price is prohibitive. The PERSISTENT AND HEAVY FABL in merino wool last ’’car led to an immense decline in the consumption of this das? of wool—a decline which probably more than counterbalanced tee failing off in the supply. The shops were) speedily filled with rough materials, and polite shopmen pleasantly informed their customers that these goods—many of them little better than glorified horsecloths attractively dyed and finished—, were the fashion, and had quite dis* placed the smooth-faced, soft, and supple merino goods in popular taste. In this way a period qf high and falling values was comfortably got over by manufacturers, clptb merchants, and re*, tailers. But the moment prices for merino dropped back to the old level, and it was seen that bottom was touch* ed, the demand for the. fine, dressy, 1 and durable goods, which in large centres of population especially always, command the readiest sale when available at moderate prices, immediately) made itself felt, and manufacturers were, no longer afraid., to make stock meet) it. As a consequence of this the market, fop merino ha* latterly moved up e little, and that it can easily go seme- 1 what higher still without seriously checking consumption is admitted by) good authorities in textile circles. At 1 the same time strong wools are selling! at such extraordinarily low rates that* they will almost certainly prove a bin* dranoe to any very -big advance obi merinos, whilst the decline in cotton, will act similarly. With the Cape flock* decimated, end the great shortage in) Queensland, such an advance might possibly occur j but if it did it would in all, probability prove of very abort duration, for manufacturers, if compelled to pav high rates just to complete existing o r- : ders, would lose no time in getting back on to crossbreds again, so long as the latter were to be had at from 4d to od‘ per lb,—“Dalgety’s Review-