Japan’s Wool Purchases

Southland Times, Issue 23346, 2 November 1937, Page 6

Japan’s Wool Purchases

The likely effect of the SinoJapanese war on Japan’s overseas wool-buying has for months past been the principal subject of discussion among those engaged in the wool industry. A very substantial reduction in Japans purchases is foreshadowed by Mr Asakawa, the representative of an important textile firm of Osaka, who was interviewed at Auckland yesterday. Last season, according to Mr Asakawa, Japan bought 800,000 bales of wool from Australia, South Africa, South America and New Zealand; this season she will buy fewer than 500,000 bales. The reduction, he says, will not be brought about by an equal cut in the purchases from each country. Australia will retain her present quota of 300,000 bales, but imports from New Zealand and South America will be practically halved and imports from South Africa will be reduced to one-sixth. This restriction of imports is the result not of any falling-off in demand—- “ Japanese mills are greatly in need of further stocks” —but of Government action to ‘ conserve the national finances” in time of war. The kinds and quantities of all imports are now regulated by law in Japan. The regulation extends to the distribution of imports among manufacturers, to manufacturing processes and, as far as possible, to prices. It is presumably on account of the existing trade agreement between Japan and Australia that Australia is to retain her present share of the wool trade. South African wool growers will be hard hit if Mr Asakawa’s figures prove correct, for their exports will be cut from 300,000 bales to 50,000 or 60,000. A reduction of one-half in New Zealand s quota would be sure to have its effect on the local market, as an all-round reduction in Japan’s wool imports from 800,000 to under 500,000 bales would tend to depress markets everywhere. The question then would be whether the demand from other countries would be sufficiently keen to compensate for such a marked fall in Japan’s requirements. During the last month the world outlook for wool and, indeed, most commodities has been very obscure, though latterly there have been reassuring signs. But there is no doubt that the wool market is still fundamentally sound and that while it may suffer temporary set-backs as waves of uncertainty pass over the world, it will immediately react to any improvements in world politics.