WOOL PRICES

Otago Daily Times, Issue 22052, 7 September 1933, Page 11

WOOL PRICES

INCREASE IN AUSTRALIA GAIN OF £12,000,000, (From Our Own Correspondent.) SYDNEY, August 31. The wonderful increase in prices that has marked the opening of the new season’s wool sales in Sydney has gladdened the heart of the nation. Since the depression set in Australians have been told that the country has turned many corners, but they are reminded of a famous English cartoon which depicted the depression-time world as a maze of corners leading to nowhere. However, with an advance in the average price of wool of at least 45 per cent. Australia may bo excused for displaying even more optimism than usual. On all sides there have been expressions of great satisfaction and business generally has been stimulated by the latest turn in events. There has been extraordinary activity at the chief Stock Exchanges, and in Sydney share buyers operated this week with more confidence than they have displayed at any time since the middle of 1929. Pastoral shares, although they have been lifted materially in price in anticipation of an advance in wool, continued to rise after the first sale and all issues in the group touched now high levels for recent years. General industrial and trading shares also benefited by the bright tone of the market.

The sales attracted a full attendance of buyers and trade representatives, and so great was the interest in the sales that many of the growers came to the city to watch the fortunes of the market. The sale had not been in progress more than a quarter of an hour when it was realised that a substantial advance in prices was certain. The news spread like wildfire and great enthusiasm was displayed in various parts of the city. Urgent telegrams were despatched all over the Commonwealth, The most sanguine anticipations had been more than realised, and there were some who made bold enough to say that the pastoral industry was at last out of the wooth The president of the Graziers’ Association of New South Wales (Mr James WalkerV was among those who said that as far as wool was concerned the worst was over, Mr Walker is not a man who exaggerates. The widespread demand for wool, he said, was one of the features of the sale. Doubtless the decrease in wool production was playing an important part, but it was evident that there was an increased demand for Australian wool. Even the new figure at which the wool had been purchased was not high and barely covered the cost of produce tion, so there was still an urgent necessity to reduce costs. The amount of wool sold on the first day was about 10,000 bales, and this largo quantity was snapped up in two and a-half hours by buyers who came from all parts of the world. Practically the same amount was offered at the opening sale last year and it realised then £130,000. The amount paid this year, it is estimated,, was £170,000. These figures give some idea of what the rise means to Australia, for they show an increased return of £40,000 for one day only. The position can be better illustrated by quoting the experience of a well-known Japanese buyer. A clip offered at this time last year failed to reach the reserve placed upon it and was hold over for 12 months. The Japanese said that 12 months ago he offered 8-1 cl per lb for this particular clip, which this year was sold at auction for 16d. In another way it is well for Australia that there has been a big rise in the price of wool. An improved market compared with a year ago was essential to off-set the decreased quantity of wool that will be shorn throughout the Commonwealth this year. Australia produced a record clip of 3,200,000 bales last season, half of which was grown in New South Wales. The quantity produced this year is likely to be from 7-J per cent, to 10 per cent, less, the clips from the outer plain areas, where drought has prevailed, showing a greater shrinkage. Monetary returns in Australia during the last 12 months were also augmented by the sale of a carry-over of 150,109 bales from the 1931-32 selling year. The 3,000,075 bales sold in Australia last season realised £34,410,321 in Australian currency, averaging £ll 9s 5d a bale. This year it is estimated that 2,075,000 bales will be sold in Australia, and it will be necessary for that quantity to sell at an average of £l2 17s 3d a bale, or 12 per cent, higher than last year in order to produce the same returns. Judging by the opening sales this will be more than realised. Considered opinion is to the effect that the average increase in price will be at least 30 per cent, over the whole season. Like new life to the financial blood stream of the country the extra wealth to Australia from the wool cheque will mean stabilised credit overseas, more employment, greater spending power, and a general revival of industry. The city and country combined in sharing the benefits from increased prices for primary products. At the same time it is made clear by responsible men that there will be no orgy of spending. The pastoralists have a big leeway to make up, and they are likely to move with extreme caution. On all hands the wonderfully strong statistical position of wool is emphasised, and in many quarters it is believed that prices will continue to improve. The wool sold this week is by no ( means the best that New South Wales can produce. Most of it has come from drought stricken districts, but the quality has been exceptionally good, and the wool has shown less vegetable matter than was the case with the early clips last year.