THE WOOL MARKET

Otago Daily Times, Issue 23436, 26 February 1938, Page 3

THE WOOL MARKET

A SLOW IMPROVEMENT “ REASONED OPTIMISM PERMISSIBLE ” / __ That the affairs of the wool world are slowly taking on a brighter aspect seems to be the consensus of opinion among the better-informed individuals of the wool trade, although a certain amount of anxiety is still expressed as to the future conduct of the Japanese in regard to sales (writes “Warp” in the Sydney Mail). With a wider demand from the Continental and Yorkshire sections of the buying trade, the outlook, instead of being in favour of buyers, is now swinging the other wa y. The Japanese have been a factor in the improvement of the wool market, and some observers consider that the fact that they are again showing more than a passing interest in the sales is responsible for the change in the attitude of the other sections of buyers. Generally, however, the opinion seems to be that we cannot expect too much from the Japanese in the near future. At the same time, even if her Interest slackens, it is possible that the initial impetus which they have supplied will be carried on without them. Just how long the season is going to last is something that cannot be predicted at the moment, although the joint conference of the controlling bodies of the trade in Melbourne this week may have something to say in that regard. The position, however, is by no means as bad as it might be, or as bad as was contemplated a few weeks back. The slight improvement in market values has made a great alteration for the better, since more growers are now agreeable to have their clips brought forward, and are generally a little more willing to accept current market rates than was the case at the close of 1937. Actually the offerings are reduced, although the bigger proportion of growers willing to sell makes it appear that allocations have not been altered. However, the point is that, provided sales go on at their present rate, it will be possible to clear up the current season’s supplies before the official closing on June 30. To do this it will be necessary for sales to go forward

briskly each possible selling day, with an offering of about 9500 bales daily, and on the present slate of the market this should cause little difficulty. If that figure c‘an be maintained, the out> look will be much better for the coming season than it could be with a carry-over of more than modest dimensions. , , So far as the maintenance of the demand is concerned, it is interesting to note the opinions expressed in the annual report of a London woolbroker just to hand. They suggest that while the influence of Japan will be large, in the long run the general prosperity of the U.S.A. will have a greater bearing on events in the wool market. There they see the greatest danger. On the other hand, they suggest that on the Continent things are improving. France’s trade is reported to be on the up grade, and forward strides are also reported from Italy and Germany. , Much has been heard of rearmament, and they suggest that the effect of this, as far as Britain is concerned, is only beginning to be felt, and will continue to be so for some time to come. While there has been some increase in the cost of living there, conditions are said to be fundamentally sound, and in the woollen industry itself they report that losses in the slight slump were not serious because of the light supplies generally held. Summing up the position, they think that “ a reasoned optimism is permissible, and “ see no reason why supplies should not be absorbed at about present levels, though any sharp advance in the price of the raw material is likely to meet with very strong resistance from the consuming end and further encourage the use of substitutes.”