Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, SATURDAY, APRIL 12, 1930. THE MARKET FOR WOOL

Poverty Bay Herald, Volume LV, Issue 17233, 12 April 1930, Page 6

Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, SATURDAY, APRIL 12, 1930. THE MARKET FOR WOOL

li<*jK»its during tln* pnst few days of an improvement in -the market for wool, slight though that improvement is, will be welcome news not only to the farmers who are directly concerned but also to business people as a whole, for it is freely recognised that upon the state of the markets for primary produce depends the prosperity of the Dominion. The results of the Wellington wool sale on Thursday were hailed with no small degree of relief, prices having advanced to an appreciable extent over the previous sales in the same centre. It is doubtful, however, whether wool growers will derive a wide measure of satisfaction even from the enhanced values. The gratification that is expressed is not so much in the Actual prices realised, but in the hopes held out of a gradual improvement in marketing conditions. “The silver lining in the cloud of low prices,’’ was one phrase with which the sale was described, but it is questionable whether the lining can lie regarded as anything like substantial enough to warrant- any great amount of optimism. Certainly the “cloud of low prices” has not lifted, and if. is indisputable that prices are still considerably below the cost of production. Taken in conjunction with the report of the closing of the London sales, however —and there is little doubt .that the one had an effect upon the other—there is undoubtedly some reason to look to the future, if not with optimism, at least with a measure of confidence. It is of importance to the industry to know that the London sales had the effect of clearing the bulk of the season’s clip, and that the fears of :ui excessive carry-over of stocks has been largely removed. The fact remains, nevertheless, that -the wool market is still very far from being satisfactory, and unless some greater degree of stability can be insured, this country, in common with the other Dominions, is going to face difficult times in the near future. In a recent, article in an Australian newspaper the president, of the New South Wales Graziers’ Association emphasised the fact that, the present depression in the Commonwealth could be ascribed to a large extent to the fact that tin 1 wool cheque for the season would show a reduction of about £25,0110,000 compared with the previous year, The average price realised in the 1928-29 season, he pointed out, was approximately lSd per lb, while this season it had fallen to about. l()d, with the result that wool was being sold at, a loss to the growers. Fortunately, New Zealand is not quite so totally dependent upon wool as is Australia, but at the same time it is prob ably the most important factor in regulating our prosperity, and the serious fluctuations in the market; have a widespread effect, on the general economic, conditions of the Dominion. The importance of taking steps in the direction of stabilising the market: is fully realised in all wool-producing countries. In this Dominion during recent months numerous proposals have been discussed, but up to the present there has been an almost entire absence of unanimity. This, perhaps, is quite understandable, for the proposals have invariably been linked u)i with such suggestions ns a wool board, and the withholding of supplies from the market, methods of procedure which arc viewed with some

alarm in many quarters, and not with- j out a great deal of justification. The experience of the Dairy Control Board when it attempted coercive measures against tho merchants at Home, and the attitude of the wool buyers when it was suggested that wool was being held, arc two instances of the need for careful and mature consideration before the wool growers commit themselves to any reactionary policy. It would appear that action can only be , taken if the growers of the woolproducing Dominions, Australia, South Africa, and Now Zealand, can agree upon some joint action in their mutual interests. ' in this connection, the recent conference of graziers in Sydney would seem to have taken a step in the right direction when it resolved in favor of an Empire scheme for the control of wool. It would, indeed, be difficult to find a more striking instance of the possibilities of co-opera-tion, for whereas individual action by either New Zealand or South Africa, and possibly even by Australia, might be disastrous, if the three countries embarked upon a concerted campaign its very strength would assure its success. Not only do the British Dominions produce practically one-half of the total wool in the world, but they also produce the bulk ot the ex portable surplus, the only other country to export on a large scale being South America. A study of the wool production of the principal woolgrowing countries will emphasise this point. In 1928 the estimated production of wool was as follows: —

2,525,814,000 These figures are exclusive ot Russia and China, the former of which produced about 350,000,0001b5., and the latter about 50,000,0001b5. Neither of these countries, however, exerts any extensive influence on the world’s markets. From these figures it. will be seen that the three principal woolgrowing Dominions, Australia, South Africa, and New Zealand, produce approximately .1,500,000,OOOlbs. ot wool annually, or in excess ot: one-halt the total of the countries enumerated, it has to be remembered, however, that the domestic wools of European countries and of the United States of America arc practically consumed in the home markets, so that in a literal sense the wool-exporting countries of the world are restricted to the British Empire and South America. The South American countries, it will be observed, produce only 482,000,0001b5., or little more than half of Australia’s production alone, and less than New Zealand and South Africa combined. Clearly, then, there are great possibilities of effectively controlling the industry if the projected Empire pool is put into operation. Such an organisation would not merely seek tu obtain satisfactory returns for growers, but could deal with such varied matters as freights, selling programmes, the elimination of unnecessary charges, and the regulation of supplies, aspects which are of equal importance to the consumers as to tho producers. The proposal holds out prospects which are well worthy of investigation, and which, in addition to effecting a solution 'of the primary difficulty of ensuring reasonable returns to the grower, would be another step in the direction of promoting and consolidating trade within.the Empire.

LI is. United States .. .. nr. 1,0.13,ono Canada It), <311,00(1 Great Britain .. .. ] 19,090,000 Brunei; Germany .. 47,000,000 9.'1,500,000 Argentina . . 545,000,000 Uruguay . . 159,000,000 Australia . . 950,000,000 New Zealand .. .. 258.000,000 South Africa .. . . 285)000,000