The Outlook For Wool

Southland Times, Issue 23288, 26 August 1937, Page 4

The Outlook For Wool

The high hopes for a record; season in wool expressed by two Australians interviewed in Auckland on Monday seem to be justified by evidence available from the world’s markets. “There are no surplus wool stocks in Australia,” said' Mr E. A. Box, “and the demand is such that many wool-buying agencies in the Commonwealth have sent buyers round the country to bespoke wool now on the sheep’s back.” The Australian season, of course, begins much earlier than our own. In the middle west of New South Wales shearing is already in progress, and the opening rdtes in the market show an average increase of 30 per cent, on the opening rates of 1936-37. Reports from the leading wool-growing countries indicate that wool production for the current year will be much the same as in last season, whereas the demand promises to be heavier. It was reported recently from Bradford that stocks of crossbred wools have never been lower, and there has been keen buying in this class of wool throughout Britain. New Zealand farmers should therefore receive good prices for crossbreds, which means good returns for the bulk of their clips. Business has not been so brisk in finer wools, mainly because some of the. larger manufacturers have been unwilling to burden themselves with stocks of high-priced articles which seem increasingly to be exposed to competition from substitutes. This competition comes mainly from those countries now entered upon programmes for economic self-sufficiency. Germany and Italy have already reduced their imports of raw wool, and are actively experimenting with artificial fibres. It is scarcely to be denied that the higher rates now prevailing for the natural product will encourage these nations to depend more than formerly on their new industries. A possible corrective to this position is the world increase in the price of wood pulp, which provides the raw material for most artificial fibres. It has been shown, too, that improving trade brings evidence of a widespread preference for woollen clothes; and in spite of many problems in politics trade returns in most- parts of Europe show a continued swing towards prosperity. Wool growers will be wondering in what way the SinoJapanese war will affect the markets in the new season. There were no Japanese bids at the winter wool sale in Christchurch last week; but the comparative smallness of this sale may be a sufficient "explanation. Past experience has shown that foreign wars up the price of wool, although it should be remembered in this case that Japan’s financial resources, which are rumoured to be anything but strong, will be severely taxed if the present struggle—as now seems possible—develops on a wide scale. Japanese buying .in the past few seasons has been exceptionally heavy, and in the light of what has happened in China it seems feasible to suppose that Japan has been building reserves of raw materials for an emergency of this kind. A prolonged war would quickly reduce reserve stocks, but it is possible that for at least one season there may be a noticeable falling off in the bids from Japan. Against this must be considered a statement of opinion included in a report from London, printed on Tuesday. “Optimists searching for comfort,” said this message, “contend that the war may be an advantage to Lancashire as it may lessen the competition from Japanese textiles.” But this is theory which may not have to be tested in the immediate future. The Australian season has already made a good beginning, and conditions in Britain make it reasonably safe to predict that New Zealand growers will also receive high prices for the clip of 1937-38.