OUR YORKSHIRE LETTER.

Otago Witness, Issue 3898, 27 November 1928, Page 23

OUR YORKSHIRE LETTER.

RAW MATERIAL SETTLING ON TO A MORE WORKABLE BASIS. (From Our Special Correspondent.) BRADFORD, September 20. Since last May' it has been quite evident that wholesale buyers of fully' manufactured goods have not been prepared to operate extensively on the basis of prices paid for wool in Australia, New Zealand, and South Africa, and this has paved the way for a marked decline in values. For the second time within three years it has been demonstrated clearly that there is a level beyond which it is not safe for raw material values to rise. Once fully manufactured goods get beyond a certain equivalent in the raw material business is cut off, and there has to be a rather painful process of readjustment before confidence is recovered. A leading West Riding manufacturer stated last week that the experience of his firm was that there had been a buyers’ “ strike ” ever since last Easter. No firm that they dealt with had been disposed to anticipate the future in the least. The policy pursued had been simply to buy small quantities—seldom more than five pieces of a given style of cloth. Such orders are obviously' inadequate to keep all the machinery running in a mill of any' size. This has been the weakness of the position during the past three months, and there are now more standing combs, spindles, and looms in the West Riding than during the two previous slumps of 1925 and IS2O-21,

HOW TOP PRICES HAVE FALLEN. No better indication of the general trend of prices and the state of business can be given than by showing the course of top values since last March. It is now well known that since the wool selling season in Australia commenced some comparatively cheap wool has been bought on Bradford account, and though it would be folly to suggest any further decline in raw material values without some justification, it is by no means certain that the present level will be maintained:—

Another -onsideration of some importance is the unexpectedly large quantity available for the current series of London sales. Selling brokers who came to Bradford seeking wool for resale in Coleman Street stated that they were expecting anything from 80 000 to 85.000 bales, and that the auctions would last no longer than a fortnight. It now turns out that the quantity' available is 140,000 bales, which means that if all this wool is offered the series will last three weeks. This has created a mild sensation in the trade, and clearly' shows that holders have sent back to Coleman Street bigger weights of wool than anyone expected. Not only has wool been sent from the West Riding, but also from Boston, Roubaix, and several centres in Germany and Belgium. Such an extra quantity as 50,000 or 60.000 bales is neither here nor there so far as the home trade is concerned, and should become still more insignificant when Continental competition gets to work upon it: but nobody likes to see wool coming up for sale again after it has once presumably been bought for consumption, and it cannot be overlooked that prices to-day are considerably lower than when the said wool was bought in Australia; I give below the quantities available and sold at the September series of London sales during recent years. It will be seen how the present offerings compare with previous ones: —

The figures show that at every other series except 1927 a bigger quantity' of wool was sold than is actually available this time; 140,000 bales should not present the slightest difficulty to home and Continental buyers, but unfortunately', neither section is doing anything like as well as is desirable. There does not appear to be anything to choose between textile conditions in the West Riding of Yorkshire and Northern France. The wool textile industry is not in such a bad way that nobody' • wants the raw material. It is simply' a case of trying to get in at the lowest point, and merino wool will have to fall 10 to 15 per cent, compared with the previous auctions in London if tops are to be made at the price at which they' have been sold in Bradford during the past fortnight. Average 64’s have been sold at 4s, and even less. If the truth could be ascertained it would probably be found that 3s lid has been taken for January delivery, and importing topmakers seem prepared to run as much risk as ever in selling forward. A DISTINCT EASE. The event of the week is the opening of the fifth series of sales in London. There was the usual large attendance of buyers, all anxious to know the latest turn of events. Naturally there were many’ “blue” looks, importers realising that once more wool values are “ in the soup ” and that heavy' losses are again ■having to be faced. It all depends upon the viewpoint taken, whether one thinks that the worst has happened or otherwise; but a fall in merinos of 73 to 10 per cent, provides no sugar-coated pill for anyone. The fall was a nasty knock to those who were looking for a recovery in September and November, but all through the interval I have been urging owners of wool to "et rid of their stocks with all possible speed. The series opened with a very listless spirit, and there were some heavy withdrawals. Prices for wools sold registered a distinct backward move, the best combing merinos declining 5 to 73 per cent., with average wasty wools more like 10 per cent, under July closing rates. Crossbreds moved very similarly to merinos; in fact, practically' all wools lost ground, 74 to 10 per cent., including South African. One regrets very much the decline was so much, but it only harmonises with overseas auctions. However, there is no need for any' undue depression among . pastoralists. Similar times have been seen before; but it all goes to confirm what the writer has been saying for months that the state of trade is really bad and that wool values last season got too high. THE OUTLOOK. Messrs H. Dawson and Co., after referring to “ acute depression,” go on to say: “ The industry has been up against two almost impassable economic difficulties, viz., too much machinery and a wide discrepancy of values between the manufactured product and the raw material. In the struggle to function, hope and confidence have been shaken and replaced by' an almost despairing determination to stop, by any means, the ruinous losses. This has naturally resulted in a desultory hand-to-mouth retail trading all round. There is no speculation in any section, and one cannot trace any sign of either ‘bulls’ or ‘bears’ in any of the markets. Despite this, wool occupies still a fairly sound position, and if reasonable views are taken there is no justification for any vestige of panic. If the home trade can establish the often-discussed 4s basis for 64’s merino tops there should be good, sound business to follow. Meanwhile the great need of the industry (as

much for the producer as for the con* sumer) is for a workable basis to be stabilised. This would restore confidence more surely than any other factor, and probably ensure the quickest and soundest revival of trade.”

March 31. d. May 31. d. July Sept. 31. d. 17. d. 70’s warp • • ■ . 58 574 56 ’ 53 70's average 564’ 564 □ 3 51 64’s warp 56 554 54 50 64’s average bl) 544 53 49 70's Cape, 1 months 58 564 55 53 G4’s Cape, 1 months 56J 544 54 51 58's average carded . 47 46 46 43 5S’s average carded . 424 41 40 36 50’s average carded . 33J 32 31 29 48's average carded . 29 29 28 27 46’s average carded . 27' 264 26 25 40’s average carded . 25 25 25 24 46’s average prepared 271 27 264 25 A 40’s average prepared 26 254 25 LONDON OFFERINGS. 24

Total Available. Total Sold. September— Bales. Bales. 1928 140,009 — 1927 141,000 119,500 1926 198,000 169,000 1925 . . 225,000 181,000 1924 182,500 160,000 1923 . . 223,000 192,000