THE WOOL POSITION.

Rangitikei Advocate and Manawatu Argus, Volume XLV, Issue 12010, 12 March 1920, Page 5

THE WOOL POSITION.

SIGNIFICANT CABLEGRAMS. V '• ,Y- ■?"' V '(?\ -/S '*• ' Per Press Association Palmerston N, March 11. " t At a meeting of shareholders of the Farmers’ Distributing Company, the following cable messages were read. They were not, nntil now. public property at the request of the company:—

The Prime Minister despatched the following, cable : —Director of Raw Materials, England: Dominion woolgrowers, banking and financial institutions, and woolbrokers greatly concerned regarding the position on return to free market conditions for wool. While it is hoped your published forecast that all wool purchased on behalf of the Imperial Government will be shipped hence by 31st December next will be realised, and relief thus afforded will be fully appreciated, it is recognised that this does not eliminate all dangers as regards the coming clip, 1920-21. It is feared that unless arrangements can be made whereby the large accumulation of wool on account of the Imperial Government is prevented from coming into undue competition with the coming clip, grave complications will arise, resulting in a serious fall in values and consequent financial embarrassment of woolgrowers and the New Zealand Government. «,! trust yon will formulate some scheme providing protection to all concerned in the wool industry on this Fide which I can submit for confirmation here.

On February 17th the Director of Raw Materials replied : Your cable has had our careful attention. Owing to the great delays in turning round steamers and owing to the Shipping Controller having diverted space from wool to wheat, it will be difficult for me to maintain shipments on a sufficiently large scale to lift all Government wool this year. However, we will make every effort to do so, and in any case reduce the carry over to the smallest possible quantity. We agree that the position of the growers of new wool depends principally not on whether the Government surplus is stored in New Zealand but on the total quantity left unsold, and arrangements made for the disposal of it. You need not have any fear regarding wool from 48’s upwards, which will be readily sold at a good profit, almost as readily as they come to hand. Forty-sixes are in fairly good demand at prices showing very little margin over appraisement value. We think that our surplus at the end of the year will probably be very little, and need not cause serious concern. Wool below 46’s is selling slowly and poorly in spite of being relatively so* much cheaper than finer wool. I do not think that reducing our selling limits below the equivalent of the appraisement prices would substantially increase our sales unless the demand materially improves. There will be a considerable surplus of coarse crossbreds, both New Zealand and Australian, carried over at the end of the year at which time we expect our surplus stocks will consist almost entirely of those low grades. Unless you have some suggestions to make nothing is to ke done but to continue the present iines, supplying the market freely with every grade of wool, but not attempting to force wool into speculative hands by cutting pricesof unpopular grades severely. I shall be glad, six months hence, when the situation has developed further, to agree with you on any feasible plan for combined action. You need not fear our attempting to force sales by cutting prices without consultation with you.