MARKET FOR WOOL

Otago Daily Times, Issue 23529, 18 June 1938, Page 3

MARKET FOR WOOL

AUSTRALIAN SALES MORE CONTINENTAL BUYING RESULT OF LOWER PRICES Continental operators have been valuable buyers at this season's wool sales. Their recovery in activity has to a great extent been responsible for the fact that Australia up to the end of the first week in June had been &ble to sell about 2.600,000 bales this season, or ovpr 90 per cent, of the quantity available for the year. With Japanese purchases much below _ norma] and American buying negligible, the marketing of the clip would have been considerably less satisfactory if the Continent had only operated to the degree seen in preceding seasons. The lower cost of wool has been_ an encouragement for European buying, according to the latest report of Winchcombe, Carson, Ltd. Australian woolbrokers, but stocks of raw material and tops had reached a very low level in the European countries. At the close of September last the quantity of tops on hand at the German combing establishments was 3,900,0001 b At the corresponding date of 193? the total was 21,400,0001 b France was more or less similarly situated her September stock of tops -eing 9,000.0001 b below the figure a year be fore. . A variety of causes has contributed to the larger Continental buying, that in view of the much-expended output of artificial fibres, particularly in Germany and Italy, the revival in European purchasing of wool offers some measure of assurance regarding the use of wool. Stocks of tops have increased on the Continent during recent months

Business in most countries is now suffering because of the recession in prices for most primary products As in the early depression years, these have become cheaper, and the decreased public purchasing powei resulting has gradually curtailed sales of mrnufactures. As in the past, nowevet, the first sign of recovery is likely to show in improvement in values for raw materials. When indications show that a rise in rates is probable, manufacturers commence to restock and speculative interest is awakened. Such movement is not so far evident, and hopes of its development centre on the efforts of the American authorities to stimulate industry by Government expenditure. A strong demand for wool will be necessary* to ensure a satisfactory monetary return for the new Australian clip, according to the report Not only will a reduced quantity be shorn, but the length and condition of the wool grown over a wide area, particularly in New South Wales, will detract from its value.