The Southland Times. PUBLISHED EVERY MORNING. "Luceo Non Uro. ” WEDNESDAY, JANUARY 10, 1934. THE WOOL MARKET

Southland Times, Issue 22218, 10 January 1934, Page 4

The Southland Times. PUBLISHED EVERY MORNING. "Luceo Non Uro. ” WEDNESDAY, JANUARY 10, 1934. THE WOOL MARKET

If the Auckland wool sale had a tonic effect on the Dominion no less stimulating has been the buoyancy of the market at subsequent sales. There was, it is true, a feeling of optimism among wool-growers at the opening of the current season, but the prices have far exceeded expectations and there is the comforting assurance from many well-informed circles that values are unlikely to depreciate before the present clip is disposed of. It was not merely an improvement in world trade which caused wool to soar. A shortage of 400,000 bales in the Australian clip and 200,000 in the South African clip and the small stocks in combers and spinners’ hands were important factors in the changed tone of the market. Speculators who in so many countries in the world were holding wool helped to accentuate the shortage and cause the pendulum to swing towards better prices. An important feature of the sales has been the partial bridging of the gap between the prices for fine and coarse wools. In recent years buyers have shown a distinct preference for the finer grades, a reflection of the public demand which reacted most disadvantageously to New Zealand where coarser wools so greatly predominate. This natural desire of consumers, when wool was so low in price, to purchase the finest materials had a further reaction, for the excessive demand for this class of wool forced buyers to be content with a slightly coarser grade until, as the recent New Zealand sales have indicated, something approaching equilibrium has been re-established. With the advent of higher prices for wool the manufacturers of substitutes will take the field in full force again, since the appreciation of values is really a bonus to them. Forecasting the trend of the wool market is, as many speculators have found to their cost, difficult in the extreme, but there is no doubt that the present is a propitious time for realizing on stocks. A survey of world conditions does not induce the belief that the nations have regained their full purchasing power. Budgets have to be balanced, foreign debt settlements have to be made, the success of the New Deal in America has to be awaited before people can spend as freely as of yore. And even when prosperity is restored there will still be the ebb and flow of supply and demand and fluctuations in price. But at the worst there seems every reason to believe that buyers will still bid briskly and prices will still remain high until the last catalogue of the 1933-34 season is disposed of. By that time the Dominion will have benefited by close on £8,C00,000 in cash and by an equivalent amount of restored confidence.