DISAPPOINTING WOOL PRICES

Otago Daily Times, Issue 23517, 3 June 1938, Page 21

DISAPPOINTING WOOL PRICES

REVIEW OF SELLING SEASON GREATLY REDUCED RECEIPTS IN OTAGO DECREASE OF NEARLY £1,000,000 One of the most discouraging features of the season that is just closing has been the indifferent demand for wool, which is one of the principal products of the land in Otago. Receipts from the sheep’s back in this province for 1937-38 season show a decline of nearly £1,000,000 as compared with the gross returns recorded for the previous year., At the five chief auctions held in Dunedin since last July values were lower than at the corresponding sales last year, and with fairly heavy withdrawals and passings the quantity of wool sold fell below the previous season’s total. The combination of reduced sales and lower values, therefore, may be said to account for the deficit of approximately £950,000 in the provincial balance sheet for wool. ,

MARKET PROSPECTS At the present time little can be said with respect to the prospects for wool in the coming season. The market has with difficulty been holding its own in Australia since the close of the selling season in New Zealand, and the third series of sales in London, which closed at the middle of May, showed only a slight improvement on recent rates. Despite the fact that competition was fairly keen throlighout the series there was little in the strength of the market to encourage very high hopes for the coming season. News from most of the manufacturing centres abroad does not disclose any real revival in trade or consumption. In fact, if any variation in prices does occur in the near future it is likely to be caused by the cessation of the impetus to the purchase of raw material which depreciation in the French franc provided from March onwards until recent stabilisation efforts. One ray of hope for the producer, however, is to be found in the prospect of reduced supplies of the sheep’s staple next season in all growing countries, a shortage which is generally recognised as probable and which should prove a source of market strength. In Bradford the quotations for tops have not altered to any great extent, as the following prices for them at the close of the London wool sales on March 30 and May 20 show March 31. May 20. d. d. 70's merino 28 * 27$ v 64’s merino 26$ 26 60’b merino 25$ 25 58’s comeback .. 22 22 56’s fine crossbred .. .. .. ' 10$ 20 50's medium crossbred .. .. 17$ . 17$ 40’s coarse crossbred .. .• , I 7 WOOL NEED OF CONSUMERS An indication of the relative importance of the various countries as users of wool is supplied by provisional returns published by the Imperial Economic Committee. They show the quantity of wool imported in 1937, plus the domestic production, less the amount exported, the resulting totals being the quantity retained for use:— lb. lb. United States .. 777,000,000 Germany .. .. 287,000,000 United Kingdom .. 639,000,000 Japan France 382,000,000 Belgium ~ .. 143,000,000 Russia .. .. 329,000,000 Italy 122,000,000

During most years the total for the United Kingdom exceeds the United States figure, imports for the latter country being unusually large in the first half of 1937. Mill activity has been better in Great Britain than in America during the past 10 months. The greater part of the American supply is home grown, but the bulk of British requirements is imported. About 80 per cent, of Russia s supply is produced in that country. THE OPENING AUCTION There was a decrease'of more than a quarter of a million pounds in the gross proceeds from the first Dunedin sale this season as compared with the returns from the corresponding auction of the preceding selling season. A sum of about £119,000 of this large deficit was accounted for by the smaller offering at the opening sale this year, but the remaining £130,000 could be explained only by the considerable drop in the level of wool values ruling at the 1937-38 auctions. The gross proceeds from the December sale, 1937, amounted to £398,736 11s lOd, compared with £666,038 5s 5d in December, 1936, The average price per pound at this season’s sale was 12.77 d, as against 16.24 din the previous December. The per bale average this season was, £l7 Is 6d, compared with £2l 18s 7d for the corresponding sale last season. The number of bales sold in December, 1937, was 23,352, but at the first sale in the 1936-37 season a total of 30,372 bales was disposed of.

Last season in Otago the average price per bale for wool over the four sales held was 16.94 d per pound, or £23 0s 4d per bale, and the total proceeds from the round of auctions was £2,318,067 17s lid. THE FEBRUARY SALE The gross proceeds from the second sale, held on February 9, fell short of the receipts from the corresponding sale last year by £309,210. A smaller offering than usual at the first sale accounted for £119,000 of this total, and heavy passings at the second auction, which reduced the amount sold to 5000 bales below the February total last year, could be blamed for a further £70,000, but even allowing for approximately 11,500 bales which had been disposed of at that time last season, Otago was still short of the previous year’s returns from wool by £369,000. The February sale this year, at which 29,823 bales were offered and only 25,788 sold, yielded a gross return of £370,146 18s lid. The average price per pound was 10.39 d and per bale £l4 7s Id. At the corresponding sale last year 30,623 bales were offered and 30,323 bales were sold. The average price per pound was 16.58 d ami per bale £22 9s sd. The gross return for the sale was £679,356 16s, over £300,000 in excess of the present season’s figure. A FURTHER DECREASE The total receipts from the third sale on March 15 amounted to £356,136 16s sd. compared with £754,951 12s 7d for the corresponding auction of last season —a decrease of £398,874 16s 2d, which, added to the deficits at the previous sales made the Otag® wool cheque for the 1937-38 selling period £961,929 18s 4d lower than

that of the previous season. With an average price for the current season of a little over £l4 a bale, only about £240,000 of that huge deficit was accounted for by the reduced offerings at Dunedin this season, so that Otago was faced with a reduction in the provincial income from wool alone of nearly three-quarters of a million pounds. The average price per pound at the March sale was 10.22 d, compared with 17.79 d last year, and the mean value per bale was £l4 2s lid, as against £24 10s 6d in March, 1937, The offering at last month’s sale was only 25,975 bales, of which 20,1/8 were sold, compared with over 30,000 bales sold at last year’s March sale. THE FINAL FIGURES The final balance of wool accounts for the season by the seven selling brokers operating in Dunedin showed a deficit for the year of approximately £950,000. The gross receipts from the five sales held in this centre since July of last year totalled £1,405,168 18s 4d, compared with £2,345,180 11s lid for 1936-37. The difference, therefore, was £940,011 13s 7d, of which only about. £112,000 could be accounted for by reduced sales this season. Last season a total of 102,957 bales was sold, this year’s figure being 94,822. At the April sale 21,120 bales were put up for auction and 18,183 were sold. The averages worked out at 9.47 d a lb and £l3 3s 7d a bale. These figures showed a drop on those realised in March, when the averages were 10.22 d and £l4 2s lid respectively. The comparisons for the two seasons are;— 1936*37. 1937-38.

DOMINION SALES TO APRIL Figures up to the end of April, which'cover with unimportant exceptions the whole of the New Zealand wool year, show that this season the offering has been considerably larger than it was last season, but that the actual sales have been smaller. The decrease in sales this season is, however, not nearly as heavy as it was expected to be earlier in the season, as sales were exceptionally heavy in April, usually a light month. The figures, which have been compiled by Dalgcty and Company, show that offerings in the 10 months to April 28 were 708,865 hales, against 686.150 in the same period last season, an increase of 22,715 hales. This increase accords fairly closely with the increase of approximately 1,000,000 head in the flock totals of the Dominion, and show that the farmers, in spite of the exceedingly discouraging prices ruling throughout the New Zealand series, offered their wool quite ns freely as usual. Sales for the 10 months were 50,241. bales fewer than for the corresponding 10 months last season, the total being 631,007 against 681,248. The figure would have been considerably bigger had it not been that March and April saw exceptionally heavy offerings and in general, a disposition among farmers to meet the market. April in normal seasons generally produces only limited catalogues, but this year, growers having held off till the last in the hope of an improvement in prices, came on to the market heavily in April. There were four sales in April, at which 128,762 bales were sold. Exports for the 10 months this year show the very substantial decline of 97,316 bales on the total of 716,141 exported for the same period last year. The figures, however, would not include a considerable proportion of the wool sold during April, and the actual difference will almost certainly be substantially less.

WINTER SHOW AND RACING CARNIVAL

Bales. Value. Bales. Value. £ s d. £ s. d. August .. 2,256 27,112 14 0 2,321 40,509 2 6 December .. 30,372 666,038 5 5 23,352 398,736 11 10 February .. 30,233 679,356 16 0 25,788 370,146 18 11 March .. 30,782 754,951 12 7 25,178 356,136 16 5 April .. 9,314 217,721 3 11 18,183 239,639 8 8