LOCAL WOOL SALES

New Zealand Times, Volume XXXIII, Issue 7929, 12 October 1911, Page 2

LOCAL WOOL SALES

VALUATION AND RESERVES. Writing in the "Sydney Mail" “Rauco” makes the following reference to preliminary valuation, and shows how the fixing of hard and fast reserves based on the quality of one bale of wool often restricts business, aud places difficulties in the way of both broker and buyer. "A good deal of misunderstanding appears to exist among wool-growers regarding wool valuations. it is a common custom among owners, as soon as their clips aro in store, to ask for a preliminary valuation. Tho point often overlooked, however, is that such a valuation is made under great difficulties. In odd cases bales are opened up, but as a rule a small sample is drawn from each lot, for tho loss the bales aro cut the better. Thus the valuer has a mere handful of wool on which to base his estimate, and he has no evidence as to whether tho bulk is either hotter or worse than the. small sample he sees. At best tho preliminary valuation is but a rough estimate.

“At the same time many owners adopt the practice of putting a fraction on to tho figure submitted, aud making it a hard and fast 'reserve.’ When the wool is to be offered for sale a certain proportion is placed on the show floor, and the bales opened up, and it may happen that a full inspect .. i makes it clear that the preliminary c;.. mate was unduly optimistic. It is then a foregone conclusion that tho wool will be passed in at auction, and while the selling broker is communicating with the owner regarding the price bid the buyer fills up bis order, and will not stand to his bid. Re-offored wools aro to a certain extent ear-marked, as buyers remembering that when last offered tho wool was reserved above market values do not pay it the same attention as fresh wools.

“The selling agent will endeavour to get as gloae as possible to tho valua of the wool. Ho has his reputation at stake, but he can only value on that day's basis and cannot possibly say what values will bo a fortnight or a month ahead, when the wool may be offered. On the day of sale, when the wool can be fully inspected, he is able to go very close to the values of the lot, and hence owners who come down to see their wool sold can then arrange as to the reserve to be affixed with more reason.

“Where an owner cannot attend the sale, however, it is unwise to handicap the sale of the wool with a hard aud fast reserve, based on a valuation made some time previously. If he is prepared to accept the full current market value he can safely leave the matter to the discretion of the selling broker, for in these days of keen competition he can rely on the seller straining every effort ; to get the best price possible, and no modern salesman will allow wool to go at a fraction under what ho considers fair market value. Tn the first place, being paid on a commission basis, it is to the agent’s interest to get all he can for the wool, and, moreover, competition is so Keen, and so much depends upon getting the owner a satisfactory price, that the last farthing in the market will bo secured The different salesmen all have clips from the same district, and, naturally', desire to get top prices not only to hold their business, but to attract fresh constituents.

“Then the competition of buyers is a safeguard to owners. There is no keener competition in any trade than in woolbnying, and the various sections are trying to outdo each other all the time. In the Sydney market to-day there are buyers from every . wool-using - centre of the civilised world, and the rivalry is strong. The buyer has to estimate the yield of the wool, and has defined limits to work upon, and knows he must bid up to his limits to secure the wool.”