The Farmstead.

Southern Cross, Volume 9, Issue 3, 20 April 1901, Page 3

The Farmstead.

THE UPS AND DOWNS OF WOOL.

Wool, viewed from its commercial aspect, bas been executing a decidedly unusual see-saw during the past 12 months, during which period the ups and downs of the market have been remarkably demonstrated. In a very interesting article on the position and prospects of the Australian wool trade, which appears in the March number of the ‘ Australasian Insurance and Banking Record,’ the matter is very ably dealt with. The writer points out that in January, 1900, the Price op Wool had risen to an extraordinary height, ■with every prospect, according to the best authorities, of a continuance for a year or so.' Now, we are told, Australian crossbred wools are at absolutely the lowest level ever known, and merino wools are within 10 per cent of the lowest point. In one year the price has dropped, in round numbers, Ten Pounds a Bale. In January, 1900, super sixties tops in Bradford was quoted at 32|d ; on March 14th last they had dropped to 18|d. What makes it all the worse for the Australian pastoralists, is that simultaneously with the decline in price, there bas been a great fallingoff in the clip. The total production for 1899 of Australia and New Zealand was 1,600,000 hales, as against 1.675.000 bales in 1898, thus showing a decrease of 75,000 bales. For 1900 the clip is estimated to be about the same as in 1899. It is more than 300.000 bales less than the output in 1894, and 379,000 less than that of 1895. Taking the clip this year as being the same as last, the Record estimates that the clip of 1900 will realise about £17,600,000, or £8,600,000 less than did the 1899 clip, similar in size. This is not A Very Joyful Pact for speeches dealing with the inauguration of the new Commonwealth. To find an Australasian clip worth only £17,600,000 we have to go hack fourteen years, to the clip of 1886. So far as New Zealand is concerned, it is satisfactory to note that the. 1899 clip showed an increase of 2000 bales as compared with that of the previous year, but, of course, we .share with our Australian brethren the ‘doleful dumps’ of low prices. It naturally becomes a subject of great interest to enquire, first, what is the cause of the falling-off in quality, and, secondly, Why Prices are so Low ? The former is easily accounted for. It. is due to drought—particularly in Queensland. During 1900, the colony was visited by ‘absolutely the worst drought ever known before by white men.' The result is that out of 15,226,479 sheep alive at the end of 1899, it is believed that there could not be much more than 8,000,000 alive at the end of 1900. The sheep of Australasia, it is estimated, have fallen in eight years from 124 500,000 in 1891, to under 93,000,000 in 1899, and the number at the end of 1900, it is believed, will be considerably less perhaps not more than 90,000,000. The cause of the decline in prices rests a little more on conjecture. The theory of the writer in the ‘ Record ’ is that the great cause is that the previous rise was too high. There was in 1899 every justification for a moderate rise, but as a matter of fact wool was ‘ boomed ’ to an extent hardly ever before experienced in the history of the trade. In one year merino wool Rose in Yalue about 70 per cent. Two results followed this great rise. One was that a large number of firms found that they had bought more wool than they could comfortably pay for, and the other was that the great rise in the prices of manufactured goods checked consumption. These two combined made it impossible for the rise to be maintained, and the reaction set in. Not only has the rise of 1899

been entirely lost, but we are now down to the level of four years ago.’ With

The Severe Lesson

which bas been administered to the wool trade during the last twelve months, it is not at all likely that another ‘ boom ’ will be engineered for some years to come. Prices, however, are now so low that it seems impossible they can fall any lower. On the contrary, following the general rule, the low prices ought to stimulate consumption, and this, combined with the lessened output, ought to have the much-to-be-desired effect of sending prices up again.— Wanganui Chronicle.