MARKET SOUND BUT UNEASY

Southland Times, Issue 23332, 16 October 1937, Page 15

MARKET SOUND BUT UNEASY

WOOL PROSPECTS FOR SEASON STABILITY NEEDED The wool market has not proceeded up to general trade expectations. Its special statistical soundness from the selling standpoint has been offset by the tension created by world-wide international nervousness, reports Winchcombe, Carson, Ltd., Sydney. Uneasiness has not been confined to the sheep’s staple. Cotton and other commodities have been affected and more settled conditions are necessary for price stability on world markets. Apart from that aspect, for some time the cost of wool has been above the selling figures at which tops have readily sold. Turnover in the latter has consequently shown reduction. If, howevei, general circumstances had been more favourable, the strength of the raw material situation would probably have been felt to a greater extent and buyers of semi-manufactures would have found it necessary to come more into line with the cost of wool. Regrettable though the easing in prices for the sheep’s staple may be no cause for undue alarm exists regarding its position. On the opening sale day this season prices were 25 to 30 per cent, above September 1936

figures and about 15 per cent, higher than in November-December last season. The market at the latter period, with much better selections than are now being submitted, provided results for growers which supplied excellent returns. Average 64’s tops then changed hands freely at 36d in Bradford, and it is considered that good business can now be effected at that level. The trade abroad awaits stability in prices and, once the market attains that need, turnover in mill products is likely to revive. SUPPLY NOT EXCESSIVE The supply position of wool has not altered in the past few weeks. Production for some years has only kept pace with production. The world’s clip will not provide excessive supplies this season if prices are on a basis at which goods can be freely sold. The general demand from Yorkshire, Italy, Germany, France, Belgium and Australian millmen at the first Sydney wool sales gave a definite indication that the raw material is required. The easing in competition since experienced is not a sign that wool is not wanted. It has been caused by uncertainity as what is a safe level to buy. The basic factor in wool prices is the public at I shop counters, and if they cannot or will not purchase beyond specified ’imits. business must eventually face that fact.

The strength of public purchasing power has not weakened. Employment has extended and it is not likely to contract while rearmament, among other factors, has millions occupied in the speediest possible production of all the equipment attached to naval, air and military defence. At the present juncture no person can foresee with definite accuracy the

exact basis at which wool prices ..ill attain stability. Meanwhile, however, we see no reason to consider that Australia will not secure a good payable range of prices for her clip, unless international developments disrupt business. For a considerable period financial authorities have stressed the fact that the level of commodity prices is largely dependent on the price of gold. Actually the price of gold in London has recently been quoted at slightly over £7 an ounce compared with slightly under that figure during the preceding month.