THE WOOL TRADE

Poverty Bay Herald, Volume LXIII, Issue 19138, 6 October 1936, Page 8

THE WOOL TRADE

AUSTRALIAN REVIEW MARKET UNCHANGED POSITION OF .JAPAN SYDNEY. .Sept. 26. Practically no alteration lias been experienced in values at this week s Sydney wool auctions. At sales early in the week, the demand for faulty, dusty, burry fleece and skirtings was not as well distributed as at the preceding week’s Brisbane auctions, but on subsequent sale days, the. inquiry for those lines showed a. regain in regularity. All the better classes of fleece and skirtings com mnnded keen competition at fully sub tained figures. Yorkshire was again the most active purchaser, but German demand also exhibited strength and good volume. France was appreciably active. Bidding was also experienced from Italy, Belgium, America, and Australian manufacturers. Japanese buyers were present at the sales but did not operate.

The. expectation of the re-entry of Japan is influencing many growers to re train from offering their clips and cans ing the withdrawal of most of the lines passed-in at the sales. Actual market quotations for greasy inferior to average wools showing vegetable iault, more 01 less freely, do not show a great change compared with a year ago, when Japan was operating, and about 90 per cent ol the offerings was sold at auction. The following figures show the quotations for greasy inferior to average hurrv merino wools in late September a year ago and this week : 1936 1936 * d d d cl Fleece 1.11 to 14 11 lo 14 Broken &. Ist pieces 9 to 12 9to 12 Pieces, very burry 51, to 81 6to 1 Bellies 5 to 7 6to (, “LUXURY OF A GAMBLE” Values for broken, pieces and bellies are practically without ciiangc. latino, iteecc wools are slightly lower, til recent years, Japan lias nought, burry rleece wools with marked freedom, am. they miss, to a large extent, the impetus, to prices which her brisit competition supplied. Owners withdrawing goou wools from sale are indulging in the luxury of a gamble. At present Yorkshire and German demand is keen aim attractive lines are not plentiful, They will become more abundant in the catalogues as the season progresses. On the experience of recent seasons, the consist out maintenance of German buying iopen to doubt, Wool is imported into Germany under permits in order to control funds for foreign exchange. Can any person forecast the degree to which imports will be permitted?

If circumstances elsewhere remain unchanged, the re-entry of Japan as a buyer would probably give a fillip to prices for burry wools. Effect on values for the freer lines would he less certain. A wider margin exists between rates for burry topniaking lines and spinners’ than for some time. Recovery in prices for burry classes might only reduce the difference in values for the two types L the margin prevalent during the bulk ol last selling year. In any ease, the duration of Japan’s inactivity as a purchasei is most uncertain Her buying representatives in Sydney have no information in that respect. The week’s offerings totalled 46.651 hales, of which 83 per cent was sold at auction. The catalogues averaged approximately 12.6 d per lb, compared with 11.7 d in the similar week of last year, when Japanese competition was experienced. SOUTH AFRICAN SALES This season’s South African dip is expected to total 262.000,00-11), the cquiva lent of approximately 873.000 bales oi Australian weight, an increase of 80.551 bales on 1935-36 production, but 227,001bales below the peak quantity of 1932-33, when 330.0:0,OC01I> or about 1,100,001 hales were grown. Figures covering the exports of greasy wool for the 12 months show that France was the largest bnyei in Son'll Africa with the equivalent o! 220.693 bales of Australian weight shipped to her ports. Exports to the United Kingdom were 182,996 bales. Germany 141.553 hales. Belgium 71,643 hales. United Stales 10,250 hales, Italy 19253 bales. The quantity taken byJapan was so small as to be unquotable. In 1934-35 and 1933-3-1, however, considerable quantities were taken by Japanese operators. Japan has already bought freely in Africa this season. That increase in buying and the absence of a great advance in the size of the clip ■ vill debar other countries from securing last season’s quantities. If they continue l-o need merinos, Australia is the only ether quarter in which appreciable sup nlies of them can he secured. Until the South African auctions have proceeded for some time, the full effects of that possible change cannot- he seen. STABILITY IN PRICES

The absence of fluctuation in prices fo wool during last season was valuabliioni the suiiKipoint of the slieepownei

and was also of considerable, aid to maim iaeturers and trailers in manufactures. In September, lk'3s, 64’s quality serge was worth approximately 5s 7d per yarn m Yorkshire. It advanced to 5s 11<J by December, -ts Id in March-May, and wa.5s in July. In those circumstances trading was simplified for wholesalers and retailers. If it were possible, the maintenance of prices on a more or less stable level would be of advantage ; but unfortunately various factors contribute to fluctuating prices. Wool supplies vary, and the volume ol trade changes through a number ol causes. Last season the conditions were favourable, consumption of the sheep’s staple pressing closely on its production, if for reasons beyond control the purchasing power in the world’s countries decreases, the only possibility in maintaining the use of wool is through reduced prices of the products made from

During the depression the wool grown passed into consumption, but it was the reduced prices of manufactures which enabled it to do so. The manufacturer and trader would agree with the grower that a stable level of prices would be advantageous. As n whole, millmen do not make satisfactory profits when prices are low. They show hotter earnings when values are on a higher basis, hut high prices cannot be maintained unless business conditions are favourable.