WOOL PRICES

Otago Daily Times, Issue 23500, 14 May 1938, Page 3

WOOL PRICES

PROSPECTS OF IMPROVEMENT CHANGES IN SELLERS' FAVOUR COMMENT ON CURRENT CONDITIONS There seems to be a tendency to expect a rise in commodity prices generally, although the news from London and New York, following the “ pump priming” policy announced by President Roosevelt, scarcely encourages the view that important market changes for the better are likely to occur suddenly (writes “R. V. B.” in the Australasian). A gradual improvement would be preferable to rapid rises in wool prices. Any sharp and quick movement one way or another is usually short lived. Of one thing one may be fairly confident, and that is that any changes that do- take place should be in favour of the sellers. What, you will say, are the grounds for making such a bold statement as that? Well, prices have been very low—too low, indeed, except for certain types of wool, which are very scarce. The signs of the times, particularly in America, point to renewed efforts to encourage trading activity. Credit facilities are being extended. The danger of additional upheavals in Europe appear to be averted for the present at least, and a more hopeful atmosphere is reported from various parts of the world. Another, and possibly the most potent, reason for confidence in stronger markets for wool is the prospect of diminishing supplies after the current season’s accumulations are absorbed. Extremely unpromising seasonal conditions continue to embarrass the majority of growers in the principal wool-producing parts of Australia. The prospects of good clips in South Africa and in South America are doubtful also, and according to reports large areas of the northern hemisphere where wool is grown are suffering from droughts. Perhaps the sun spots are playing tricks—taking a hand in the adjustment of things, by causing seasonal vagaries on the earth. STAPLE FIBRE The economic conditions which prevailed in 1937 provided a futile field for the progress of the staple fibre industry says the Australian Estates Company, Ltd., in its last quarterly review. With other textile fibres higher in price, and with some countries suffering from a shortage of funds for wool and cotton purchases, the competitive power of this fibre was strengthened. The following figures compiled by the Imperial Economic Committee show the production in the chief countries in 1937 compared with the two preceding years;— STAPLE FIBRE PRODUCTION IN CHIEF COUNTRIES (In million lbs).

In Germany, now the largest producer, the increase is in accordance with the four years’ plan for national self-efficiency. A stimulus to the industry was given by enforcement of its use as a proportion of uniform cloths, by a reduction in price, and by the restriction of imports of other textiles. The greater part of the industry’s output is reported to be in cotton staple length for use In cotton machinery. In Japan, the increase was by far the largest, and in that country also the object of self-sufficiency has been the chief stimulus. In October, 1937, a Government decree was issued requiring wool kimons and blankets for domestic consumption to contain from 20 to 30 per cent, of staple fibre, and in February last this decree was extended to cover serge and hosiery. Staple fibre has competed largely with cotton,'nearly all cotton yarn and cotton piece goods for domestic consumption being required to contain at least 30 per cent, of the, fibre. The result has been greater encroachment on the use of cotton for native garments. In Italy the rate of expansion has slowed largely because Italy had a considerable export trade in staple fibre to countries which are now producing more of their requirements at home. Nevertheless the use of staple fibre in Italy is still increasin'* and is believed to partly account for the lower con-, sumption of wool products. In, the United Kingdom more than 90 per cent, of staple fibre is of cotton staple length, and Is used on cotton machinery. It may be taken, however, as significant that the production of staple fibre, although increasing, is relatively small in the United States, which has considerable home produced supplies of wool, cotton, and other fibres. There is a measure of consolation to be drawn from the fact that the spectacular increases in the production of this fibre have taken place in countries which, as part of their national policies, have given it artificial encouragement, and generally, these increases have not been the result of consumers’ preference. WOOL FOR GERMANY

The Estates Company also analyses Germany’s wool needs ana points to a declining wool consumption in that country. It is shown that the use of wool in Germany in 1937 was estimated to have been approximately 252,000,0001 b, whereas in 1933 Germany used about 372,500,0001 b of wool. An attempt has been made to offset the reduction in wool imports to Germany by. increasing the production of home-grown wool. Germany’s own clip totalled about 40,000,0001 b greasy weight in 1937, compared with 31.300,0001 b in 1933, but the climatic and geographical conditions of the country are not favourable to further large increases. A greater proportion °f Jhe shortage is being made up with artificial fibre, the production of which has increased rapidly in the last few years. It is stated, too, that an analysis of the textile requirements of Germany has been made ,by the. New York Wool-top Exchange Service, which concludes that there is little possibility that Germany will increase her wool exports in the immediate future, but that lower imports are a probability.

1935 1936 1937 Germany .. .. 34.3 90.0 200.0 Japan .. .. .. 13.6 45.9 170.0 Italy 67.7 110.1 154.0 United Kingdom .. 11.5 28.5 35.1 United States 4.6 12.3 20.1 France 8.0 12.0 13.5 Total 139.7 298.8 592.7