THE RISE IN WOOL

Poverty Bay Herald, Volume LV, Issue 17229, 8 April 1930, Page 7

THE RISE IN WOOL

CROSSBREDS UNAFFECTED MORE ENCOURAGING OUTLOOK The rise in the wool market in London, reported yesterday, has induced growers to view the outlook with a good deal more optimism than was the case a few days /before, but so far there is no advice to indicate that Poverty Bay wools have participated in the slight upward tendency. They are firm, however, at late rates, and this fact, viewed in conjunction with the rise in the finer sorts, gives every encouragement for a better demand of tlie type which. bulks largely in Poverty Bay’s output When the attention of a Gisborne broker was called to the news item an nouncing the improvement, he pointed out that this was presaged by the advice at the end of last week that there had been a slight move forward in the Bradford tops market. The rise there, however, has been only for super merinos and fine lxalfhreds, with 44/46’s, the Poverty Bay type of crossbred, firm. Although there was no definite advice, he gave it as his opinion that as tiie rise in the London market had been in sympathy with the tops quotations, the finer sorts had moved slightly upwards, with the coarser types unchanged. The more confident tone exhibited, it was hoped, would carry the market on still further. SPECULATORS OPERATING.

Comment was also made on the speculative buying, in which a Poverty Bay syndicate was reported to have been active. This wool, together with the accumulations held in brokers’ stores and on farms, had still to come on to the market, but it was pointed out that those now’ with wool in their possession were strong holders, particularly the speculators, whose purchases may not come on to the market for a year eleven two years. It was not known how much wool was being held, hut no doubt investigations now' being made would reveal ihe true position before long. One Poverty Bay man, who is among the speculators, when asked his opinion of the position, said he had operated at Dunedin and Wellington, and he knew of others in the district who were buying in stocks, while at least one operator he had heard of had the intention of accumulating from 3000 to 40CO bales* The type he had been buying was 44’s, 46’s, 48’s, 56’s, and 58’s, which sorts, he maintained, were the be§t buying for the speculator to-day. He intended to hold his purchases in New Zealand, and he considered it likely that he would not be able to quit them satisfactorily until the 1931-32 selling season. He intended disposing of the wool in New Zealand.

“It is the speculator,” lie said, “who is keeping up the price of wool in New Zealand at present. It is reported that over 1000 bales were bought by speculators at Auckland alone, while they were also operating at Wanganui, Wellington, Invercargill, and Dunedin. I am still watching the market, and when the other speculators are becoming tired I may go in at the tail end and buy some more. I may pick up a little privately after the selling season is over here.” BETTER TONE ABROAD SYDNEY, March 25. Messrs Winchcoinbe, Carson, Ltd., report: “Competition for merino wool shows sigms of slight improvement on the London market. Evidence favors the opinion that the sheep’s staple has touched its bottom basis for the season. Current selling development supply the most cheerful indications seen at any series in the English centre for a year. They should help in creating confidence for the purchase of the balance of the Australian clip. "Monetary developments abroad de note more favorable times for commerce generally. The Bank of England rate of discount is now per cent., which is lower than the average for the three yeats preceding the war. Cheaper money means more credit for business, and usually produces a greater volume of trade.

“Cotton, -which has been receding in value overseas for some time, has risen from 7§d to Bjd per lb. At that figure it is 20 per cent, to 25 per cent, dearer than in 1914.

“Undoubtedly, at recent levels, wool is good buying, provided circumstances give consumers confidence in prices. It is a question of millmen feeling assured that it will not subsequently cheapen. Quite apart from the immediate condition of business in manufactures, the fact remains that millmen must buv wool to run their machinery. So far this season the sheep’s staple has only been purchased in hand-to-mouth fashion. Tops, yarns and textiles have also changied hands in similarly curbed volume. Once it is felt that “rock bottom” in prices has been touched, a buying movement will probably be seen in all sections of the industry. “Evidence of the degree to which manufacturers have kept their buying in check, owing to market uncertainty, is furnished by American figures. On December 31, United States millmen only had, 147.000,0001 b. of wool on hand, the smallest total held for the past eight years. In February, turn over in tops in France brightened. As in Bradford, business in that quarter probably eased as the London wool sales approached. But the improved tone in that market should again induce purchasers of tops to place orders. “Though we are not optimistic enough to consider that wool values will promptly show market improvement, we are of the opinion that selling prospects are brighter. The s.ale of the remaining portion of the clip during the next four months looks assured. Rome little time apo it looked possible that circumstances would compel sotue carry-over to next season.