LONDON WOOL SALES.

Otago Witness, Issue 3494, 22 February 1921, Page 11

LONDON WOOL SALES.

BOOR DEMAND FOR RAW MATERIAL. (From Our Special Correspondent.) LONDON, December 16. It is unfortunately impossible to report anything in the nature of an improvement in. any section of this market, and though this is the season of the year when things generally are quiet, what is being experienced at the present time, particularly with regard to the raw material, and, indeed, in every other section, is something which is quite exceptional. The “B” series of London sales are proceeding, and the results there are anything but inspiring, it having been decided to close them at the end of this week. Since the opening one of the sales had to be abandoned owing to fog. Under ordinary circumstances this would have been regarded as a mere incidental circumstance; but there was a certain amount of grim humour in a statement made in the press to the effect that this fog was a fortunate intervention. When dealing with the actual course of values it is exceedingly difficult to say how things stand. There seems to be a certain amount of reticence in some quarters respecting the reduction of Government limits, but there is no doubt that the declines which have taken place in colonial markets aqd the position revealed in the Bradford* trade since the previous auctions have exerted their influence. The reduced basis on wlich wools have been offered, however, has not resulted in any greater freedom of sale, it being quite evident that home trade buyers have not been inclined to operate. When only about 15 per cent. offerings are disposed of it is evident that some influence is needed to galvanise the market into greater activity. Even superior Tasmanian greasy combing, including some well-known marks, and the reserve prices of which were apparently around 76d clean, failed to make a market, though tho reserve price at tho previous series was around 92d. Bradford firms are apparently not willing to pay more than 60d clean for this class of wool, and in the absence of American competition it is fairly evident that Govern-

ment reserves will have to be still further reduced. The prices put on New England 70’s and other fine wools have also boon very high, in consequence of which few lots have been sold. CHARACTER OF THE MERINOS. There has been nothing very attractive about the merino wools offered, the Kcoureds being mostly inferior descriptions. No realiy superior wools of this class have been offered, and on some days the larger part of the merinos have been shabby, wasty .Australian ami Adelaide combing wools, including Sydney and Melbourne broken pieces. Government reserves for these wools ha ve apparently been maintained, and the result has been that withdrawals have been large. On very few occasions has more than 4-ud been realised for either Sydney or Queensland wools, and, judging from the few lots of scoureds sold, prices have declined about 15 per cent. New Zealand scoured merinos, which were very tender and paor, have been limited at about 42d, a price considerably more than anyone will pay at present. With regard to crossbreds, a process of selection has been noticeable, for a few of the best lots have been picked out, and the remainder loft. There is a remarkable differences between the prices fixed by the Government on greasy 46’s-44’s wools, and what they can be bought at in New Zealand, for this quality of raw material can be secured in the Dominion at the same prices clean c.i.f. London as the Government want for their wool in London. A small quantity of medium New Zealand greasy crossbreds have been sold at prices ranging around 16d, which figure is about on a parity with last series. The market for low crossbreds, whether greasy, aliped, or scoured, is entirely “off.” South American crossbreds have been sold at prices generally about 15 per cent, below the level of last series. The position of the raw material generally is most unsatisfactory, there being little to indicate that any real confidence exists in the present basis of vqlues. The cheapness of wool in the colonies is undoubtedly operating as a very decisive “bear” movement, and no improvement in any raw material selling Centre can be expected until greater confidence develops at the consuming end of the trade. THE AUSTRALIAN WOOL SELLING SCHEME. Considerable attention is still being devoted to this matter, and it is a fact that the trade as a whole are entirely opposed to it. The promoters cannot have grasped the essential principles of the wool trade, or have realised that the natural operation of the law of supply and demand is the only means whereby a proper market equilibrium can be maintained. It has been Irequently emphasised that in past years, when attempts have been made to corner the market, these attempts have been signal failures, and the same thing can only Happen again if this latest scheme is carried forward. The present position with regard to wool supplies is due entirely to a set of circumstances which cannot possibly be influenced by any such agency as it is proposed to put into operation. British Empire wool was brought under Government control durng the war, supplies being compelled to pass through one channel. This resulted in competition being concentrated at one point, and also in some buyers being kept out of the market aitogetehr. The latter was the case with regard to users in Central Europe, who no longer had any opportunity to buy colonial wool. The tremendous needs which developed on war account and the concentrated character of the competition resulted, however, in prices being lifted bn to a phenomenal basis, and now that the war is over and attempts are being made to put the wool trade on to something like a normal footing, it is found that buyers in Central Europe are not only in dire* need of clothing, 7 but are also severely. handicapped in tlieir dealings with this country by the unfavourable rate of exchange. The only remedy for what is undoubtedly an undesirable state of affairs is for some co-operative action which will enable the destitute countries of Europe to take their place once more as buyers of wool in the world s market. No doubt brave efforts are being made by individual firms to overcome the difficulty, and one hears of various commodities being accepted by way of barter for wool. _ Crockery, gentlemen’s hats, and other articles are being received in this country from Central Europe, and wool is being sent in return for some of them. These articles can bo placed on the market here at much more reasonable prices than British manufacturers can offer them, and this makes the goods all the more attractive in view of the fact that they lack nothing in ’respect of quality. To mention these goods here may seem to have little bearing upon the Australian Prime Minister’s scheme for safeguarding colonial wool values; but if be were to" follow the example set in South Africa by endeavouring to establish some form of barter the result would ultimately be far more satisfactory to all parties concerned. BRITISH GOVERNMENT POLICY. The proposal made by the Australian Prime Minister is all the more surprising in view of the policy pursued by the British Government and the state of trade as it is known to exist here. One cannot help thinking that if the promoters of the British Australian Wool Realisation Association really understood the present position of the wool manufacturing industry they would not have brought the scheme forward. There is no need to question the motive or to think that the intentions are anything other than to safeguard the interests of the entire industry ;° but, looking at the question superficially, it does seem as if the interests of the manufacturing end of the trade have been left out of consideration entirely. Probably it would be a good thing for growers and those who profess to be interested in their welfare if they understood more thoroughly the ideas entertained in this country among wool users. Growers may not be inclined to believe it, but there is any number of topmakers, spinners, and manufacturers here who express themselves as being anything but satisfied with the low level to which raw material values have fallen. They recognise that the most satisfactory business has been done in Bradford and district when values for wool have been on a paying basis for the growers themselves, and though it will take some time to discover a really rock bottom basis for wool, and this basis may be the means of starting business afresh, the fact stated cannot be too strongly impressed upon the colonial end of the trade. There is also the question of Government reserves. ■Owing to the unsatisfactory demand the current series of London sales have been curtailed, and though limits have in some cases been considerably reduced, large quantities of wool have been withdrawn. One reason wily the raw material is selling so

indifferently in London is that it is cheap** in the colonies, where wool nas been bought on a basis which will bring in tops at con* sideranly lower prices than are wanted today in Bradford for spot delivery. A careful consideration of these circumstance# should impress upon colonial growers the fact that no attempts to bolster the market are likely to be successful, and it may bo very pertinently asked. Where is ail the money coming from to finance the wool the Australian authorities apparently wish to be placed on one side? Tlieir idea of its value certainly seems to be a long way below the mark.