THE WOOL MARKET

Otago Daily Times, Issue 20942, 4 February 1930, Page 9

THE WOOL MARKET

“NO CALL FOR PESSIMISM.” RECOVERY OF LOST TRADE. OFFERINGS SHOULD NOT BE WITHDRAWN. (Special to Dailt Times.) AUCKLAND, February 3. There is no call for pessimism over the present state of the wool market. This is the view of Sir Emmanuel Hoyle, governing director,of Joseph Hoyle and Sou, Ltd,, one of the largest woollen manufacturing firms in Great Britain, operating five mills with a total weekly output of 120,000 yards of cloth. Sir Emmanuel is in Auckland in the course of a tour of New Zealand. He is making bis first trip to the Dominion, with the object of gaining an idea of the conditions of production and of measuring the prospects for the sale of manufactured goods. He will also attend several wool sales.

" The wool market to-day is only following the normal trend," Sir Emmanuel said, "There are several reasonf for the drop in prices. Following the war there came a boom period, with inflated prices for all commodities. All classes of the community were buying pure wool goods, but when the reaction came and the people had not the money to spend there was a general slump in the prices of wool, as well as of other products. As a result there was accumulated a large surplus of raw materials which only just now is being exhausted, y A point never sufficiently realised is that competition from artificial silk played a great part in forcing down the prices for wool. It wat> being turned out cheaply at tt time when people could not afford to pay foi pure wool goods. Then capitalists in England and the continent were speculating in wool, and by so doing keeping prices at an inflated figure. Even before the markets fell in Australia and New Zealand Prance was selling at very low prices. Another factor which reacted against the wool market was the falling off in use of woollen goods by women. However, manufacturers in England are now making provision for women's needs. They are producing lighter cloths, which have great advantages over artificial silk, and which should recapture much of the lost trade." " Prices for wool are now nearing the bottom," • Sir Emmanuel continued. " The principal thing is that . supplies should not be withheld from the market. This is only another form of cutting down the. back door to mend the garden fence. In other words, growers are trying to regulate prices to their own advantage by keeping back supplies, but all these withdrawals have to come on to the market sooner or later, and buyers know this; consequently they cannot take the risk of offering improved prices when they know that greater supplies are in store. My advice to growers, and. I have no axe to grind in offering it, is that they should put all their wool on the market. Prices may be low, but once this wool is absorbed there will be a gradual* improvement. This must come, but it will not be brought about by unnatural methods. No one wants to see the markets stabilised more than manufacturers. Ido not want to pay an absurdly low price for wool. I realise that a fair price is far more beneficial to the trade. I have heard it said that the difference between boom and slump is only 5 per cent. If there are 10 men each bidding for one of 12 articles there is a slump. If there are only eight articles there is a boom. Trade always goes from one extreme to another. A slump always follows a boom, but with commonsense and confidence of the growers we should soon be able to strike the happy medium of a stabilised market." Australian growers had made a very serious mistake by withdrawing a number of offerings from sale early in the season. Sir Emmanuel added. Prices were low at the start, but they were lower now when the wool that had been withdrawn was being placed on the market. It was to be hoped that this mistake would not be made in New Zea landi There, was nothing wrong with the trade. Once the . arket j was stabilised prices would be adjusted I at an economical level, and there ,would be | cause for complaint. New markets were j awaiting development, and once condi- ; become more .settled in China and Russia therj would be new outlet for j wool of tremendous proportions; Sir ; Emmanuel made a trip through the East : last year. He said there was a rapidlyi growing demand there for woollen goods. i Some years ago Dr Sun Tat Sen had issued a decree for the wearing of Western clothes in China, and this was beginning to bear fruit. China was a great potential market. In Russia, too, there was a great demand for woollen goods, but the Soviet law prohibited the importation of clothing. ' Russia could not hope to clothe her teeming millions from her own mills, buVdifficulty arose in that British manufacturers were unwilling to extend credit to Russia, owing to the instability of the Government. However, it was thought that the Labour Go% r ernment in Great Britain might give a guarantee for credit given to Russia, and this would also help to open a new market. "The danger of future competition from artificial wool can be almost entirely discounted," Sir Emmanuel said. " I have had experience of is, and I know that no artificial fibre can compare with the natural wool. The only successful vegetable fibre is cotton, and it cannot be compared with wool." Speaking of New Zealand wool, Sir Emmanuel said the Dominion's merino wool had qualities for the manufacture of certain cloths possessed by no other in the world, not even the South Australian wool. The crossbreds were second to none, especially halfbved, which he considered was the wool of the future. His firm had bought large quantities of New Zealand wool for many years, and was always satisfied. "My own firm has not experienced any great labour troubles," Sir Emmanuel said. "Our mills have been worked night and day for the past 25 years, and we are at present working 110 hours a week. -In some mills wages have been reduced io per cent., but we have made no attempt', to follow this example. lam not a believer in low wages, as I hold that a greater spending power means a higher standard of living, and also tends to produce a bettor state of trade."

11l England at present there was a greater demand for Empire goods than had ever been before, Sir Emmanuel added. People were thinking Imperially in the best possible way, and every effort was being made to encourage them. He thought that New Zealand could build up a far larger egg export trade to Great Britain. At present hundreds of millions of eggs were imported annually from China, and he thought New Zealand was in an excellent position to develop the poultry industry and obtain much of this trade.