THE WORLD’S WOOL

Southland Times, Issue 22043, 16 June 1933, Page 4

THE WORLD’S WOOL

SITUATION REVIEWED. MARKETING BOARD’S STATISTICS. The world’s wool production is being maintained at a volume not far below the record level of the years 1928 and 1929, despite five years of low prices. Southern Hemisphere countries, as a whole, have not yet reduced their output, although smaller sheep figures are reported for New Zealand and Uruguay. At the same time, the United States and Russian production has fallen recently, particularly the latter, where the decline may be estimated at about 50 per cent, of the peak production of nearly 400 million lb. in 1929. Although both the United States and Russia are wool-importing countries, their consumption of foreign wool has been declining despite their smaller domestic production, and it is doubtful whether the wool-exporting countries /■an look for any material extension of their markets there under existing conditions. Fine wool production appears to be still increasing at the expense of the coarser qualities (states “Wool Intelligence Notes,” issued by the Wool Statistics Advisory Committee of the Empire Marketing Board). At the end of the 1931-32 season, stocks were unusually heavy in Southern Hemisphere countries, where they represented about 10 per cent, of the season’s output. Shipments from these countries to February 28 during the. current season have, however, been 16 per cent, heavier than a year ago and. if this increased rate is maintained, there should be no further accumulation of stocks in these areas. The stocks which have accumulated during the last few years in producing areas have been largely coarse crossbreds and carpet wools. Chinese and Indian exports (all carpet wool) have both fallen heavily. . An outstanding feature of the import trade is the heavy increase in the Japanese imports which exceeded 200 million lb. in 1932 as against 72 million, lb in 1926. Australia has been almost the only source of supply during this period and the increased imports by Japan of Australian wool have absorbed almost the whole increase in Australian production. Among important European countries, Italy has seen the greatest relative expansion in recent years, her imports in 1932 being greater than in 1926 by two-thirds. The Italian imports are mostly obtained direct from Southern Hemisphere countries, especially Australia. Wool prices continue at a very low level, although current prices for most qualities are above the lowest point reached in 1932. In the case of the finer descriptions, some improvement has occurred during the past year in the price position as compared with that of commodities in general. The coarser crossbreds have again suffered most. Demand in most wool consuming countries has favoured the finer wools and this explains the I‘eiatively smaller decline in Merino and fine crossbreds as against coarser crossbreds. The maintenance of the value of carpet wools appears to be due to the reduced exports from producing countries. Production. The world production of raw wool in the present season will show no decline, according to the latest indications, despite the low prices that have been ruling now for some years. The five important wool growing countries in the Southern Hemisphere—Australia, New Zealand, the Union of South Africa, Argentina and Uruguay—which together supply about 85 per cent, of the wool entering world trade will, it is estimated, produce about 2,050 million lb. “greasy” basis in 1932-33, as compared with about 2,020 millions in 193132, about 1,980 millions in 1930-31 and an annual average of 1,960 millions in the four preceding seasons. Of the other important wool-growing countries, the United States of America showed a decline in production, but insufficient to outweigh the probable increase in the Southern Hemisphere countries. Russian production cannot be estimated in the absence of recent sheep figures, but it is almost certain that a further marked decline has occurred in that country’s flocks, and the wool clip must be correspondingly reduced. But Russian wool is of no great importance in international trade and imports are apparently not affected by declining production. Table I shows the estimated probable production of the more important countries compared with the figures since 1926-27.

In 1931 the tendency for merino wool production to increase faster than crossbred, which had been in evidence in previous years, was again observed. In the major countries producing merino and crossbred wools, it is estimated that merino represented 56 per cent, of the aggregate production in 1931 as against 54 per cent, in 1930. In view, on the one hand, of the relative stability in 1932, according to present indications, in the aggregate production of Australia, the Union of South Africa, and the United States of America—the principal countries producing merino wool—and in view, on the other hand, of the aggregate production of Argentina, Uruguay, New Zealand and the United Kingdom, which are the principal countries producing crossbred wool, it is likely that the relative production of merino and crossbred wools in 1932 underwent little change.

(a) Representing about 75 per cent, of the estimated world production, excluding the Soviet Union (Russia). (b) Subject to revision when complete results of 1931 census are available. The following paragraphs indicate the main features in the recent development of the wool production of the principal countries. Australia. The Australian 1931-32 production was the highest ever recorded, being about 2 per cent, above the previous reCord of 968 million lb. in 1928-29. The sheep population increased between 1931 and 1932 and it is estimated that production in the current (193233) season will establish a new record. The increase since 1930-31 has resulted largely from continued favourable climatic conditions —there has been no serious widespread drought for several years—and so far these conditions have counter-balanced the adverse effect of reduced expenditure by fanners on rabbit extermination, fence repairs and the like; but even if the seasons continue to be favourable climatically, it seems probable that enforced economies, brought about by low prices, must exert an increasing influence upon wool production.

Almost the whole of the 1931-32 record clip was disposed of and on June 30, 1932, stocks at selling centres amounted to only 45 million lb., or about 5 per cent, of the season’s production. In the first eight months of the current season (i.e. July 1, 1932, to February 28, 1933), brokers’ sales of new season’s wool, together with shipments of unsold wool, were 4 per cent, above the corresponding period of last season. [According to later information, brokers’ sales of new season’s wool and shipments of unsold wool during the nine months ended March 31, 1933, were nearly 9 per cent, above last season’s corresponding figure. Practically all the carry-over from the 1931-32 season has been disposed of and stocks at selling centres on March 31, 1933, were 34 million lb. or 27 per cent, less than on the same date last year.] New Zealand. New Zealand’s sheep population in 1932, for the second year in succession, was smaller than in the preceding year, and the total decline since 1930 amounts to 2 millions or nearly 7 per cent. A smaller wool production in the current season is thus indicated, but a slightly heavier average yield per sheep, is expected to modify the decrease in pro* duction. Wool stocks held by brokers aggregated 40 million lb. at June 30, 1932, as against 25 million lb. a year earlier, but exports during the first eight months of the current season (July 1, 1932, to February 28, 1933) were 20 per cent, above, last season’s figure for the same period. This increase suggests that further stocks are not accumulating and, if the present rate of shipments continues, end of season stocks in June next should be lower than a year ago. The wools held over in recent seasons have b.een mainly coarse crossbreds. Union of South Africa.

It is anticipated that the current season’s wool production in the Union of South Africa will be slightly below that of last season (1931-32), on account of a decrease in the number of woolled sheep from 44 million head in June 1931 to 43 million in June 1932. This decrease in the Union’s sheep flocks, which is .the first for a decade, was largely due to adverse conditions in the Orange Free State. Exports of wool during 1932 were somewhat erratic, being seriously affected by exchange factors. Stocks at ports as at June 30, 1932, were 50 per cent, higher than at the end of the preceding season, but exports during the succeeding eight months were nearly 60 per cent, above the corresponding months of the previous season and stocks of unsold wool at the ports at the end of February, 1933, were only 10,000,0001 b, as compared with 64.000,0001 b a year earlier. The figures are as follows:—

1931-321932-33 Million lb. Exports (July I—Feb. 28) 162 252 Stocks of unsold wool at ports, February 28 64 10

Production in 1933-34 may possibly show a further decrease, owing to drought conditions, which adversely affected the spring (September-October) lambing in 1932, combined with heavier slaughterings. The production in Argentina, Uruguay, U.S.A., the United Kingdom and Russia is reviewed. Exports from Producing Countries. As indicated in the foregoing paragraphs, shinments during the present season to d'ate from the principal surplus countries show in every case an appreciable increase over those of 1931-32. The principal figures so far available are summarized in the following table. This readier absorption by consuming centres of the growing wool production is noteworthy, and if maintained throughout the remainder of. the season should substantially diminish stocks in producing areas, which showed a fairly heavy increase at the end of the 1931-32 season.

Stocks In Producing Countries. Visible stocks of raw wool in the four principal exporting countries increased by nearly 70 million lb, or about 50 per cent, during the 1931-32 season ana represented in the aggre- ■ gate about 10 per cent, of the production. The largest stocks both absolutely and relatively were held in New Zealand, where, at June 30, 1932, they represented about one-third of the production. Although this is partly due to the fact that the stocks figures in the Dominion are compiled on a more comprehensive basis than in the other countries for which figures are available, it is also partly due to the lessened demand for the coarser crossbred wools which form a substantial proportion of the New Zealand production. As already stated, it is anticipated that stocks in the four countries in question will show a decline at the end of the current season.

W001S m imuerwem iiiue wiaugc. » • Table I—Estimated Wool Production of the (In millions of lb. principal producing countries. greasy basis). 1929-30 1930-31 1931-32 1932-33 ourpiub countries 1$ >26-27 1927-28 1928-29 Australia 924 888 968 938 912 990 1030 New Zealand 254 262 272 273 271 283 260 'Union of South Africa 246 276 285 309 290 302 300 Argentina 371 349 353 332 354 341 340 Uruguay 129 131 139 148 149 106 120 Total 1924 1906 2017 2000 1976 2022 2050 Deficit countries 1926 1927 1928 1929 1930 1931 1932 United States of America 335 357 384 400 433 460 434 United Kingdom (b) 117 123 124 122 121 124 130 Total 452 480 508 522 554 584 564 Grand total for above countries (a) 2376 2386 2525 2522 2530 2606 2614 Soviet Union (Russia) 351 370 392 394 306 Not available