THE WOOL OUTLOOK.

Otago Witness, Issue 3098, 30 July 1913, Page 17

THE WOOL OUTLOOK.

DALGETYB ANNUAL WOOL REVIEW FOR AUSTRALASIA. There are so many factors which near duectly or indirectly upon the course of general trade that to forecast market movencnta of almost any commodity is a promuch ' S naturalI .V approached with much diffidence more especially as pasl 1 story proves that of all commodities non® is more sensitive to fluctuations than wool e trust that on this occasion our forocast as regards the more immediate outlook was ",o° l Wlll , provo to bo as correct ns it "as 12 months ago. MODERATE WOOL STOCKS. At the moment of writing it is known tnat stocks of goods manufactured from "00l are low, but that, owing to the quick transportation of the past clip from Auatralasm, South America, and South Africa to the large consuming centres, spot Buiip'ia* ot the raw material arc ample for immediate requirements. But it is also a fact that if the consumptive demand during the next few months approaches that of laat year then before the ensuing clip become* available to consumers supplies wil! bav* reached vanishing point. Although the clip of 1911-12 was a record one, it went rapidly into consumption at iov?^ iri ”r'allies, and towards the end of . “o m Europe, the margin of supplies "as a very narrow one. It stands to reason therefore, that the greatly-reduced quantity of wool which will bo available to manufacturers for the current year, in consequence of the severe drought having caused such a startling reduction in the Austra.ian and South American clip, will not bo sufficient for requirements provided that trade is on an equal basis to that of the past 12 months. It has to be admitted that never befo-in has the consumption of wool in the work been on the same ratio as during the pai year; but it must bo liorno in mind that the requirements of the world have onou mously increased of late years. Thanla to good harvests and full employment ol labour at a better level of wages than baf over before been realised, there has boon, a trade boom in many countries, and iiiorf particularly in Great Britain, in which th( wool-manufacturing industry has enjoyed full advantage. Tnat this great expansion of trade has taken place despite the most disturbing of influences—such as the Balkat. industrial and political unrest, 4 Presidential election and tariff revision it j U.S.A., and a senstive and at all timet deficient money market—is remarkable. THE WORLD’S TRADE. Never before has Great Britain expert- ■ enccd such a year’s trade, tho boom in which still continues, and, according to tho Chancellor of the Exchequer, is destined to do so throughout the coming year. Trade has been exceptionally good in Prance, and it lias also boon good in Germany, though much slacker of late in the last-mentioned country, on account of monetary stringency. Despite the bumper wheat crop in Russia, trade with that country has been disappointing. owing to tho financial disruption of tho preceding year, which would ora this have righted itself but for tho war between tho Balkan States and Turkey, and at tho present time the deferred settlement of disputes between tiio allies themselves. These drawbacks have done much damage to trade in Austria-Hungary. American trade, which otherwise should have been very good on account of tb© big wheat and cotton crop- 3 , has been restricted by pending drastic changes in tho tariff and exodus of go'd to Europe. It will be seen that by no means were conditions during the past year generally such that an unprecedented consumptive demand for wool at relatively high values should have ruled, and when these things are turned over mentally, and the future, as regards wool values, is surveyed, it is difficult to dispel the conviction that the coming clip should bo easily absorbed without any serious retrograde movement in tho market. The groat nations of the world have shown, by their co-operation and handling of tho remarkably complicated position in the near East, that tho horrors and waste of a big war must and shall be averted, if at all possible; and if only the Allies, who inflicted such a crushing defeat upon the Turks, and have gained so much in territory and prestige, would settle the difficulties which have arisen between themselves, it is only natural to suppose that there would bo an expansion of trade, and consequently increased demand fur wool in those countries which have been moat directly affected by tho war. PROSPECTIVE WOOL SUPPLIES. Though there will be some increase in wool supplies during the ensuing year, thanks principally to tho splendid season now being experienced in Australia, tho not increase in the wool clip will not outweigh tho increased requirements under ordinary trade conditions, for in attempting to estimate the increase in the Australian clip the tremendous losses of grown sheep and the poor lambing of 1912 must bo borne in mind. According to latest reports, there should be some slight increase in tho wool output from South America and South Africa, but by tho time supplies are available to manufacturers stocks promise to become exceedingly meagre.

Prospects for the world’s crops are particularly good, so that if nothing unforeseen happens employment should be plentiful and food cheaper and the spending power of the masses greater; but in this later connect.on the one grave aspect of the present and the future presents itself, inasmuch that throughout the world the financial position is one of great anxiety. THE FINANCIAL POSITION. Briefly stated, it would appear that, though the world’s gold output has onoij mously increased of recent times and reached the record of just upon £91,000,000 during the. year 1912, there is insufficient gold available for the huge requirements of trade. This position has boon brought about in a great measure in a peculiar manner—namely the increased hoarding of gold in India, which is one of the most serious aspects of the world's finance, and is particularly troublesome at a time when its circulation is so universally required. There has been in addition enormous unproductive expenditure of money upon the navies and armaments of the world, and no lets than £90,000,000 upon the Balkan war. The withdrawal of French money from Germany and the increased taxation in the latter country, caused by the growing requirements of the army and navy, have seriously checked trade there; whilst the best financial authorities in the United States of America draw attention to the fact that the reserves of gold in the national banks of the States are lower than for a long period. Instead of gold being shipped to the United States, as it should have been In settlement of trade balance after a year of bumper harvests and generally good production, there has been a serious drawing of geld from America to fill the depleted coffers of Europe. Another reason for this peculiar movement of gold is that at flic present time a higher rate of interest can be obtained ir. the older countries of Europe than in America. LEVEL OF LAND VALUES. There are some who argue that wool values stand at too high a level to permit of expanding consumption; but we do not agree that wool is relatively too dear at the prevent time. It has not increased in cost during the past 10 years in anyhing like the same ratio as its groat competitor, cotton, for instance, and many other of the world’s chief commodities A sovereign cannot buy anything like the same quantity of building or clothing material as formerly. Why should it be expected to purchase as much wool ? Certainly ivith woo! scarce and cotton plontifu', ns is the position to-day and outlook for the year ahead, there is some likelihood of greater adulteration of woollen goods during the coming year than was the case during the past 12 months, when one of the features of the textile industries was the increased demand for wool and pure-wool garments to the detriment of cotton and wool and cotton mixtures. Wo express the opinion that were it not for the difficulties of finance, wool values, and more particularly merino woo! values, would bo more likely to advance than decline. Merino wool is mentioned by us as being more likely to maintain or improve its position in comparison with crossbred because at the present time crossbred wool is relatively quite as dear as merino; furthermore, the rapid expansion of the frozen meat industry in the more important wool-producing countries is encouraging the increased breeding of crossbred sheep to the detriment of the merino. In discussing the financial position and the world’s wealth there is the indisputable fact that crop prospects are good, the gold output increasing, and that the actual wealth is in the world somewhere; but, sound as those arguments may appear, past history has, unfortunately, proved that panics are caused not by actualities, but by apprehension, and for that reason growers will probably bo satisfied if wool values during tno coming year do not decline from the payable level that obtains at the present time. THE DAIRY INDUSTRY. DEVELOPMENT IN SOUTH TARANAKI. (Fr.OJi Ora Own Correspondent.) WANGANUI, July 22. The Ivg development of the cheese industry in South Taranaki is reflected in the operations of the Kgmont Box Company. During the 12 months from July. 1912. to June, 1913 the company manufactured 282,294- buffer boxes and 219.005 cheese oases. This is a decrease of 28.414 butter boxes and an increase of 56.863 cheese cases on the preceding year’s figures. With a view to si'll further inducing farmers io go in for the best milking strains, the E-.rmont A. and P. Associat : on has decided to hold dauw herd competition, to be open to aT farmers with a herd of 25 ocw? r r over, the competition to commence on Avgust 1, 1913, and finishing on May SO, 191 J