WOOL INDUSTRY

Poverty Bay Herald, Volume LIII, Issue 16233, 6 January 1927, Page 2

WOOL INDUSTRY

POSITION IN AUSTRALIA

REVIEW OF 1925-26 SEASON.

'-The success of the 1925-26 woolselling season has had much to do -with the prosperity of Australia and wool has continued* our main source of reiki venue, the value of the wool sod running to £57,718,000 (states in f and Commerce of Australia). The most striking features o* the Australian woolsellinjr season, which closed on Ju«e 30 last, were the record volume of the turnover, the remarkable recovery of confidence throughout the wool-consum-ing centres, which made that business possible, and the almost unprecedented evenness? of the range of values througn"These results became all the more gratifying when the conditions prevailmg at the commencement of the season are analysed. In the previous season prices soared to a 'boom' level, and subsequently collapsed, with the result that confidence evaporated and there was. for a time, practically no demand for wool. This led to an entire suspension of sales throughout the Commonwealth for two months, and it waa during this suspension that the new • season was ushered in. The outlook for wool was most disquictening and the position was accentuated by the fact that there was a carry-over of old season's wool of 505.954 bales in the Comomvealth, and, in addition, the prospect of a heavier current clip than usual.

"The coot rolling authorities of the local trade, the "National Council of Wool Selling Brokers of Australia and the Australasian Woolgrowers' Council, had faith in the power of the industry to extricate itself" from its difficulties. and decided upon the resumption of auctions and the mapping out of a selling season. The initial sales were based upon a reduced offering of about 50 per cent, of normal quantities, but before sales had gone far it was found possible to revert to normal offerings and push on with the sales. MEETING THE MABKET.

"The re-establishment of the market was made possible by the keen French demand for wool on the one hand and the conimonsense policy of growers of meeting the market ou the other. To have attempted to bolster prices up to an artificial level would, assuredly, have caused disaster. On the other hand, the free offering of wool was the first step in the restoration of confidence. It was, of course, signally fortunate f bat the French section of buyers should have been suffering from a lack of stocks to fill urgent orders, and the prosperity of the French milk created a. strong and well-sustained demand. Most of the other sections were mere spectators for a time, and the opinion was freely expressed that once the keenness of the French section slackened prices would swing to a lower level. This fear kept many users out of the market. There had been heavy losses during the previous season, and no one was prepared to take any risks However, confidence gradually reasserted itself and, although | admittedly the buying was generally on a hand-to-mouth policy to fill orders, it was in the aggregate sufficient to lift the volume of wool offering. The class of baying referred to was in itself a safeguard against violent fluctuations and the financial institutions behind wool users recognised that there was safety in backing wool users, because there was no speculative element in their buying and because the Wool to he financed was definitely allocated to meeting trade requirements. It is noteworthy .that, although a big volume of money was required to finance the purchase of the clip, there was never at anv period of the. season any need to Call a halt for financial reasons, and it Was never at any time suggested that the terms of payment for wool should . be varied."