WOOL MARKET IN 1906.

Otago Witness, Issue 2762, 20 February 1907, Page 10

WOOL MARKET IN 1906.

MESSRS CHARLES BALME'S REVIEW. {F&ou Our Own Correspondent.)

LONDON, January 5.

Reviewing the position and fluctuations of the wool market in the year ju6t ended, Messrs Charles Balme and Co. say: — "The course of events in the wool trade during the year has been very similar to that noticeable in 1905, and clearly demonstrates that under existing conditions of consumption the world's production of the raw material is not sufficiently large to satisfy the requirements of machinery. Twelve months ago attention was drawn to thefact that manufacturers' reserves of wool were practically exhausted ; to-day, after another period of buoyant trade all over the world, their stocks are, if possible, even smaller, although some 230,000 .bales more colonial wool have been delivered to European and American consumers than during 1905. In these circumstances prices for both merinos and orossbreds have been maintained at a level which has proved highly remunerative to wool growers; on the other hand, complaints have emanated from manufacturers that at tho rates current for wool, tops and yarns, they have Yoen unable to 6ecure what they considered an adequate price for their cloth. "An untoward feature of the market duririfir the latter half of tho year," cay Messrs Balme, " was the persistent attempts made to reduce quotations by ' bear operators who were anxious to discount tho possible adverse effects on wool values of a further increase in the Australian output for the current season before tho beginning of a fresh cam■aign in the colonies. In making their calculations, however, they did not allow for any expansion in European consumption or for a renewal of the American demand for the raw material ; consequently, although these manoeuvres were for a time attended with a certain measure of success, they rendered the condition of tho market so sensitive that, on receipt of cables from Australia reporting delay in shearing through wet weather, prices rapidly hardened, and smart losses were made by tho6« who had sold for future delivery, many of whom had not tho wool on hand to cover their contract's." After noticing in detail the several variations of the marketflind its conditions, Messrs Balme remark: "The result of the year's operations has thus been to raise quotations for merinos by about 5 per cent., fine cro6sbreds 7£ per cent., medium crossbreds 5 per tent., and coarse crossbreds 10 per cent." They beJi^ve that " this seasou's supply will yield some 175,000 bales more merino wool than last year- No corresponding augmentation, however, is looked for in the output of crossbreds, as, although ehipments from New Zealand, Uruguay, and Patagonia will probably be rather larger than last, year, the flocks in the Argentine Republic are decreasing, in many districts land on which sheep, were

formerly depastured being now used for agriculture or cattle-raising. Moreover, in North America, as well as the different European countries,, the number of cheep is diminishing or at the best stationary." They think that "prospects for the new r year appear favourable. Trade all over the i world is buoyant, and stocks practically exhausted. It is true that supplies of merinos will be greater than for some time past, but even allowing for 175,000 bales more than last year, the total available will only reach the figures touched in 1895, while during the period which has elapsed since then consumption has greatly expanded owing to the increase in population. Indeed, since the beginning of the Australian droughts, users have not had an opportunity of replenishing their stocks of merinos, so that, given a maintenance of the present favourable business conditions in Europe and America, the trade should have no difficulty in absorbing the larger provision of fine wool which will be to hand during the current year at a relatively Tiigh level. The production of crossbreus is not increasing, and in view of the 6m all reserves of this class of produce remaining in consumers' hands there seems no reason to anticipate any material reduction in values during the ensuing 12 months." This, on the whole, is a decidedly favourable and encouraging review ac regards 'the position and prospects o* New; "Zealand's . most important product.