THE WOOL TRADE.

Otago Witness, Issue 2410, 10 May 1900, Page 4

THE WOOL TRADE.

A circular issued by Messrs Dalgety and Co. (Limited) gives the following interesting figures showing the exports of bales of wool from Australasia during the nine months of the current wool season, ended March 51, as compared with the figures for the corres'Jonding period in the two preceding seasons : —■

[The figures lot Westralia are to the end of December. Those for Tasmania are to the end of January.. A& the exports from these two colonies are unimportant the net results at the close of the season cannot be much affected thereby.] In April, May, and June (the last quarter of the wool season) of last year, the exports from all the colonies amounted to 140,000 bales, so that similar shipments for these three months this year will be required to keep the deficiency at 75,000 bales shown in the figures above. While it is not expected that 140,000 bales will be .ay&ijftkh} jjojc ex^or^frogi jthe pdoni.es.

in the period indicated, a decrease of 50,000 bale& — equivalent to 100,000 bales Australian — is advised from South America, and fiom South Africa a decrease of 50,000 boles is expected in consequence of the war. The sales in the principal colonial centres for the past year stand as follows : — Sold in Bales. Sydney .. „ das^u. Melbourne .. .. .- •• •• 232,077' Geelong 55,519 £ rial- .Me 70,035 .Brisbane 26.638 New Zealand 95,000 Total sales in colonies .. .. 939,560 ! Sales for previous year.. „ 871,389 Increase sales in colonies .. 68,17] | It -will be seen from these figures that ' in spite of a decreased output, the quantity ' sold in the colonies shows an increase on last year of 8 per cent. Destination of Wool Purchased at the Sydney Sales. — It is roundly asserted that i dining the boom prices for merino wool were forced up considerably above the intrinsic value of the article, and that this was the result of excited competition between buyers on Continental account. This view of the case is pustairied by the figures in the following table compiled for the Town and Country Journal, Sydney, and from which it will be seen that, while buyers on British account were comparatively quiefceent, securing mainly superior qualities of crossbred', the rush for fine wool on the parl of the German, French, and Belgian continents was unprecedented : — Distribution of Wool Purchased at the Sydney Salss : — Bales. Germany and Belgium 160,003 Prance 103,000 England and Scotland 40,000 Austria \ 8,003 Japan 3.500 United States . . 3,000 Local manufacturers pnd scourers 45,030 The figures are based upon the shipping returns, showing the ports to which "i-he wool is consigned. It is further explained that "in comparison with last year's dissection, the above table shows that whilst Germany and Belgium have taken considerably more/ wool than before, other principal countries have fallen back. It is clear, therefore, that German operators were the main supporters of the rise. Yorkshire buyers were very quiet throughout the season." Referring to tke remarkable abstention from operations by buyers on Yorkshire account at the current season's sales in the colonies, the writer of the Commercial Review in the Sydney Mail, April 7, lem-irks: "From the Bradford market the news this week is again discouraging. Business is depressed, and super 60's tops are now quoted at 27d per lb and common 60's at 26d per lb, or a fall of ,^d per lb for the week. From these quotations it will be seen that tops can now be bought in Yorkshire for less money than was paid for scoured wool in Sydney before Christmas. It is quite clear from this that Yorkshire u&crs must be having a very good time indeed. From the last. t~ao series of sales in London they have been able to acquire ■wool ft pence per lb below the cost of the wools bought by their Continental competitors in Australia and South America. Yorkshire bought very little in the colonial markets, the gieat bulk of the wool sold here being tecured by Germany and France at prices wjuoh will, on average, bring the lops in at jib out something like 33d to 33 d per lb, or 6d per lb more than super 60's tops can be sold for to-day in Bradford. Such a striking difference as this in the cost of the raw material must give the Yoikshire manufacturers a tremendous advantage over their rivals on the Continent." Early in March last, when asked his opinion os to the ''.slump" in price.s for fine wool and the "situation"' on the Continent, a well-known London broker replied as follows : " The Continental wool trade is in this most difficult position — they have been out to Australia, and allowed fanaticism to supersede both judgment and 'discretion. They have bought most heavily all the wool they could, and paid prices which reason never either suggested or recomnifjoded, and to-day .there is no doubt that some of them are either going to be lamed or killed. Prices have slumped fully as much over there os here, and they are holding stocks which have cost them all round DlB to 520 per bale in Australia. But this is their position. The money stringency has been as great over there as here, and the German bankers are now dealing with .their clients in a very firm manner — in fact, our information is such that we should not be surprised to hear tell of several failures. The wool is now arriving from Australia and it will have to be taken tip. But are the firms sufficiently strong to be able to stand the frightful loss, and what are they going to do with the wool when nobody is desirous of being heavy buyers? The only policy open to them seems to be that they must realise part of their stock at the best prices they can, and, with the loose money they have, ccme into London and rush that market for all it is worth, on purpose to keep things up both here and on the Continent. There is no doubt that a good show in London will do nrach to improve all markets, but the present heavy liquidation of Australian pui chases will play a most important part in the near future of wool values."' When asked, "Is there a probability of a rebound in wool values?" this authority gave the straight matter-of-fact answer : "On that question I have no misgiving whatever. Some think that the next sales will be the cheapest this year; others seem to think that the May series will be the cheapest ; but when things get more turned round, and this war nearly settled, we shall see wool of all qualities at near last l)ecember rates. In the present state of inactivity, and the bulk of the last Australian fine clip on the market, men seem to be in clover ; but wait till July sales appear, and we' shall see then what wool will be like. The shortage from Australia will be close upon. 100,000 bales, while the South African clip is computed by the best authorities as likely to b.e ,50^000 fojileg lesjs tkaa ]#s£

year, the South American clip another 40,000 bales less, and, with the consumption as large as ever, the stocks available will certainly be readily taken after we get out of this present ' Slough of Despond.' But," he said, as he continued thp conversation, '•' what is the. wcauiug of this inquiry for crr>*=i>i'eds ? Some of our <us« torn"-* nave sent us recently inquiries for medium and fine crossbreds, while in t>il my; life I never knew them before to ask for such a quality. These customers, bear in mind, are not Bradford top-makers, but outside manufacturers who have been used to making nothing else but the fine-faced black cloths, Venetians, coverts, billiard cloths, and such fabrics, and now they are asking us to buy by private treaty fine crossbreds. What is the meaning of it?"' The answer vouchsafed was : '" That there was no doubt that their customers were smitten, with the true patriotic feeling, and at a ru?h had come into the market with large orders for the popular ' khaki ' cloths, and they were, mostly made out of crossbred wgols.- Then, no doubt, the high prices to 'which merinos hav-e been rushed were telling seriously against them, and clothiers hod stoutly set their backs against them." Messrs Wincheombe, • Carson, , and Co. 's review of the wool trade in the past season traces the course of prices since early in last year. The phenomenal rise in prices during the closing months of 1899 and the remarkable decline which so unexpectedly followed in January, February, and March, of this year are most instructively discussed. Referring to the gain to the colonies from the inflation experienced in prices Messrs "WinchcomLe, Carson, and Co. observe : "As might be expected from the extraordinaiy rise in values during the past year, the value per bale shows an immense increase. And, as applied to the whole output of Australasia, this increase would show a gain to Australasian producers of over nine millions sterling ! it must not be forgotten, however, that the colonies will not reap all the benefit which the table below indicates, because a large proportion of the clip was shipped for sale in London, and is only now being disposed of. The wool thus dealt with will suffer from, the fall which has recently occurred. Ifc would be more correct to say that the figures given represent what would have been the value of last year's clip had it -all been ?old in the colonies, and. inasmuch as this statement cuts against London as applied to the past season, we must be fair and point out that in some previous years the conditions hive been the other way about, and wool sold in London has realised more money than it would have done had it been sold locally. This is what happens when the market turns upwards after .the Isew Year. As a rule, however, it turns the other way. The new year seems to have a fatal facility for ushering in a fall in wool. Adopting our own actual sales as a base, we find the bulk value of scoured wool over the past12 monies has been £19 per bale, and greasy £16 15s per bale, the average being £17 10s.

" The following table shows the comparison for the past nine years : —

■" Estimated.

Regarding future prospects, Messrs Tv T inchcombe, Carson, and Co. say that '" with, a continued drought extending over some of the largest wool-producing districts in' Australia, and with an almost unpre- , cedented condition of trade activity in. Europe, it would seem easy and safe topredict a return to high prices for fine wool in the near future. But, in theory, merinowool ought to ba booming now, as it was in December. 'And yet the facts are against us ; prices are depressed. During the past three months we have been experiencing the recoil, and the value of wool has, tumbled down without there being any change in the conditions which usually govern the market. The only reasonable - explanation is that prices had been forced, up considerably above the intrinsic value of the article, and are now finding their proper level. At the present time the level established is, we believe, lower than the conditions of trade would justify. Statistical returns on June 30 next will show that Australia has produced about 100,000 b-tles less wool than last year, and there is no prospect of any but a small quantity being recovered next year. Cape exports must also show a heavy deficit this year (and next) owing to the war. At the same time, industrial t prosperity is the rule throughout Europe and America. Add to this the consideration that every day brings us nearer to the time when the United States must be again large buyers of Australian wool, and it will be seen that we have ail the elements of a. good time ahead. That wool will return to the extremes of last year is in the highest degree improbable. But an increase of 10 to 20 per cent, upon the existing range of prices about the middle of the year, or between that and September, would not be by any means a surprise."

The same authority proceeds to point out that one thing- has been made clear by recent events, and that the deficiency in the Australian merino clip, though serious, is not sufficient in itself to justify a run on the article at high prices, and, after all, the falling off in the output of Australia sincfc 1895 is not more than about 15 per cent. There certainty has been in addition to this a large decrease in the production of merinowool in Argentina during the same period. But if we include the English breeds of sheep, as well as halfbreds and other intermediate grades more or less approaching

merino, it will be found that the world's supply of wool is still within 12 per cent, of its highest point, 1895. And bearing in mind that' the clip of 1895 caused a good deal of outcry in Europe against, over-pro- j duction, a fall of 12 per cent, from that , point cannot be held to indicate any seri- '; ous scarcity. "In fine merinos alone the j deficiency is greater, and with the prospect ! of a further deficiency next shearing, this ' becomes a matter for consideration with ! those who must have fine wool. But these j only comprise a section of the trade, and even with them there must be a limit of | price at which it would suit them better to give up fine v.*ool and take to something cheaper. "

ijeColons'. 1900. 1899. ciease crease. 18P8. Victoria N. S. W. tj. Aust. Q'nf-lancl N. Z'L'nd Tasmania W. Ausl 282,142 M 1,973, 973 115,452 70/05 338,56] 8,349 22,50b 354,170 27,972 (501.574 ]05,21S 10,170 101,347 L-33,18? 5,374 8,139 210 20.059 2,417 1,523 779 — 372,94$ 69,601 584 062 112 409 £2,342 100,922 340,196 13.19t) 20,417 — 1,550,149 lolal ... 1,477,988;

Gross vatue Total Output Value of Yeai'a Australasia. pe Balf. Clip. 1801-2 ... 178W0 bales £9 15 0 £17,442.f0» 1893-3 ... 1.87 ,01) „ 30 4 l» 1?,4: J ,1.000 3893-4 ... 1,873,0 0 „ 919 6 18,fiS0,('00 1691-5 ... 1,P69,(00 „ 810 0 3(;,73tj,000 1895-6 ... 18 12,000 „ 10 8 0 39,156,00 a )>!M-7 ... 1,812.100 „ 10 f 0 19,168.000 1897-8 ... 1.7C001.0 „ 10 9 0 17>74,000 'S9S-9 ... 1,t:65,00f» „ 10 18 3 18,169.000 LS92-O ... *1,575 OI'O „ 37 10 0 27,5* 2,600-