WOOL CHEQUE OF AUSTRALIA

Southland Times, Issue 23199, 14 May 1937, Page 3

WOOL CHEQUE OF AUSTRALIA

Estimated At About . £62,000,000

BEST SINCE 1928-29 SEASON

Australia’s wool cheque for the 193637 season is estimated at about £A62,000,000, compared with £A54,000,000 in 1935-36, and £A41,000,000 in 1934-35. This is the largest return for seven years, and is almost equal to the amount received in 1928-29, the last of the predepression seasons. The 1936-37 wool season is the second successive year during which growers have received a profitable range of prices. The average prices for the season have been 15 per cent, above those for 1935-36 and 60 per cent, above those for 1934-35. The estimate of the season s returns is given by Winchcombe, Carson, Ltd., Sydney, in their annual review, published last week. The figures include sales in London. “The inescapable law of supply and demand was the greatest factor in prices,” the review states. “Its influence was in growers’ favour, and its effects were strengthened by monetary, industrial, and rearmament developments, which all tended to increase the use of wool.” The following figures show the movements in average prices (greasy and scoured) during the past five seasons:

1936-37 (approx.) 20 0 0 16 In 1928-29, the year before the depression, the average was 16.7 d. Japanese Buying The degree to which the market has withstood disturbing influences during the year is a tribute to the strength of the wool position. Despite the absence of Japanese buying in Australia during the first half of the season, 1,425,701 bales of wool were sold in the Commonwealth, at an average of 15.3 d a lb, compared with 13.6 d for the corresponding six months of 1935. Japan reentered the market in January, and spectacular but temporary rises in types suited to her needs were recorded. Inferior, average and good fleece lines and all skirtings advanced 10 per cent, to 15 per cent. Crossbreds shared to a greater degree in advanced prices than in the preceding selling year. In Bradford, between July 1936 and January 1937, prices for fine and medium crossbred tops rose 50 per cent. Values for greasy wool reflected that improvement Subsequently prices eased, but again recovered to the highest level, since 192829. The use of crossbreds in uniforms because of rearmament and the substitution in fabrics of crossbreds for Merinos because of the increased cost of the latter, were important influences in the advance. Directly, Japan did not exercise the influence on Australian markets which was experienced to the greatest degree from 1930-31 when she bought 513,968 bales in the Commonwealth, and the quantity showed an increase of 179,640 bales on the preceding year During the past six selling years her purchases have averaged 640,000 bales, but from the close of May to the end of December 1936 she did not buy a bale of wool in Australia. She will remain among the six most important wool buying countries in the world. The trading agreement signed at the end of December 1936 provides that in the subsequent 18 months Japan is to import at least 800,000 bales of Australian wool, the equivalent of 533,000 bales in a season, that total being larger than any year prior to 1931-32. Yorkshire’s Influence Yorkshire demand was the bridge which carried the season’s sales through their most critical period. Stability in prices for Yorkshire type spinners wools was almost consistently noticeable throughout the selling year. . The recovery in British export business in fabrics was encouraging. It is not likely to show a regain to pre-war levels when English exports of woollens and worsteds were 240,000,000 square yards. In those times, by way of illustration, shipments to Japan were 15,830,000 square yards and to Australia 22,125,000 square yards. The total for the two countries is now only about 8,000,000 square yards, and other countries which have developed the mill industry have also shown heavy reduction. In 1936 the United Kingdom imported 1,128,570 bales of Australian ■ wool. In addition to those imports of the product of the sheep industry over 98 per cent, of Australia’s exports of mutton and lamb were taken by Great Britain. French wool buying in Australia was greater than during the two preceding years. To some extent that activity was due to the transfer of orders from African markets, in which Japan and Germany were active, but the chief cause was the fillip given to business by the devaluation of the franc.

Spectacular American Buying

American demand provided the most spectacular increase in buying experienced in Australia for a number of years. The quantity of wool bought by the United States in the Commonwealth was the largest seen for over 10 seasons. It was more than double the preceding year’s total and about five times the average of the previous five years. The purchases were made despite the existence of a duty of 34 cents a lb clean scoured basis, on wool of 56’s quality and finer entering the States. . Germany’s export trade in woollen fabrics expanded in 1936. Her imports of wool have been declining since 1933. Germany requires less wool than formerly, but her light stocks have influenced her in purchasing larger quantities of Merinos in Australia and South Africa this season. It is doubtful whether wool has been more strongly situated since the war, the review concludes. Its use is outpacing its supply. Stocks which assisted millmen to carry on from time to time no longer exist, and that situation is likely to continue provided wool prices do not reach a level which checks trade or unduly stimulates the use of substitutes.

THE RESERVE BANK ASSETS AND LIABILITIES (United Press Association) WELLINGTON, May 13. A Gazette issued tonight contains the following statement of the assets and liabilities of the Reserve Bank of New Zealand as at the close of business on May 10:— Liabilities £ s d

Assets 7. Reserve — (a) Gold 2,801,791 0 0 (b) Sterling exchange 20,632,974 17 0 (c) Gold exchange 8. Subsidiary coin 144,590 4 2 9. Discounts — (a) Commercial and agricultural bills (b) Treasury and local body bills 10. Advances — (a) To the State or State undertakings: (1) Dairy industry account 5,536,159 8 9 (2) For other purposes 200,000 0 0 (b) To other public authorities (c) Other 11. Investments 2,906,450 0 0 12. Bank buildings 13. Other assets 79,831 3 11 Total £32,301,796 13 10 Proportion of reserve (No. 7 less No. 5) to notes and other demand liabilities, 76.396 per cent.

A bale. A lb. d. £ s. d. 1932-33 11 9 5 8.96 > 1933-34 20 4 11 16.2 1934-35 12 13 6 10.01 1935-36 17 11 9 14.22

1. General reserve fund 1,500,000 0 0 2. Bank notes 12,863,361 0 0 3. Demand liabilities— (a) State 6,852,878 2 11 (b) Banks 9,949,098 19 9 (c) Other 1,009,830 19 5 4. Time deposits - — 5. Liabilities in currencies 6. other than New Zealand currency Other liabilities 126,627 11 9 Total £32,301,796 13 10