WOOL MARKET

Poverty Bay Herald, Volume LV, Issue 17608, 26 October 1931, Page 12

WOOL MARKET

EXCHANGE ADVANTAGES J LONDON, Oct. 4. . Pleasant reading tor Australia is contained in an informative financial review by Mr. G. W. Alexander, city editor of tlie Sunday Express. / , Mr. Alexander attributes the resumption of the buying of Kaffir shares yesterday to the belief that competition in wool' between Australia and South Africa is likely to force South Africa off the. gold standard. ‘‘This is the result of the African gold producers getting the full advantage of the premium on gold,” Mr. Alexander declares. “Australia’s position is most favorable while her pound is at a 25 per cent, discount and the South African is at present at a premium of 17j per cent. This gives the Australian pastoral ist a considerable advantage ' over his •South African competitor. Both are large producers of merino wool, and tho values approximate closely. Assuming the basis is one shilling per pound in London, the Australian grower would receive in his own currency Is 3jd, whereas the corresponding figure in South Africa would he 10.2 d. It may be argued that the costs of production in Australia are higher than in South Africa, but the fact could not bridge this difference. As a point of fact, the low prices realised last season have already forced a large cut in expenditure oil the Australian stations, and this will also help the results in the current year. Altogether the outlook has become much more hopeful for the Australian ' grower, and this development will eventually benefit those concerns engaged in handling and financing the wool. This more assured outlook in tlie wool position appears to suggest that there arc better times ahead.”