THE WOOL POSITION.

Sun (Christchurch), Volume VII, Issue 1899, 16 March 1920, Page 6

THE WOOL POSITION.

To the Editor of THE SUN. Sir, —The cablegram from the Director of Raw Materials, which appeared in your last night’s issue, will, I feel sure, cause considerable concern to the wool-growers of New Zealand. No indication of any anxiety with regard to the future of crossbreds has ever appeared in the High Commissioner’s cables published in the press, and the general opinion in New- Zealand seems to have been that the wool position generally was perfectly sound. Personally, I ha vie always held strongly that there was very real cause for anxiety regarding next season’s crossbred clip, but, having expressed my views in-this respect to many producers and commercial men, only to find that I was considered an extreme pessimist, I came to the conclusion that my fears had become an obsession, and that 1 really was the alarmist that my friends seemed to think. The cablegrain from Sir Arthur Goldfinch, however, entirely confirms my views, and ■ the thanks of the wool-growers of the Dominion are due to the Farmers’ Dis- , tributing Company, whose request for information has been the means of ' throwing light on the position while there is still time to set up an organisation to regulate shipping of crossbreds, i with a view to minimising, if not alto--11 gether averting, disaster. The position, as I visualise it, is that there is an , almost insatiable demand for fine wools, i.e., merinos and halfbreds, or practically everything from 50’s quality upwards. Before the War a large proportion of these qualities went to the Continent, and when war broke out it was the universal opinion amongst Home manufacturers that fine wools must slump, as it was considered there was not the machinery in the Old Country to deal with this class of wool. In spite of this opinion, up to the time control was imposed, no wools advanced in price more than merinos. It must bo : remembered that up to that time supplies were arriving in England almost as regularly as they did before the War, • so that events have proved that the machinery in the Old Country is quite adequate to deal with the finer qualities of Australasian wool, if the clip is shipped at the ordinary normal rate. To-day the demand in England runs on fine-quality textiles, and this is also the case as far as the limited demand from the Continent is concerned. During the last six months merinos have been sold as fast as they have arrived, and in 1 spite of the reduced textile production, ' as compared with that before the War, prospects of wool-growers receiving for next clip considerably more than present appraised prices look to be bright. When we come to consider medium and coarse crossbreds (46’s downwards), the position appears to be entirely different. Before the War, the average quality of the New Zealand cliff was considered to I be 46’s, and to-day I should judge it to , be even lower, owing to the fact that farmers have largely changed their breeding, so as to obtain weight of fleece , rather than quality, this being especially ■ the case in the North Island. While Australia produces almost all the finer ; wools of the world, it must be remem- , bered that the British and Argentine clips are all of low quality, so that wools from these countries come into competi- ; tion with the accumulation of New Zealand crossbreds. I notice that Sir Arthur Goldfinch states in a cable published on Thursday last that there are at present 600,000 bales | of wool unsold in the Old Country. In view of the almost insatiable demand for ■ fine wools, I think I am safe in assuming . that the quantity unsold would comprise | mostly crossbreds and faulty fine wools, [ such as carbonising sorts. But wo must j look further than the quantity unsold, ■ and bear in mind that the quantity un- ( consumed must be infinitely more than . 600,000 bales. I was informed by a large Bradford topmakcr only recently that his . firm had purchased a year’s supply of wool, and that most of the large Brad- , ford topmakers were in a similar posij tion. He said that the tons or yarns from these purchases had all been sold, but that topmakers and spinners were i getting behind with their deliveries, owing to the restricted output, so that there is always the fear of orders being cancelled, , owing to the late delivery. As long as the demand for the manufactured cloth , continues, spinners and manufacturers' will not, of course, desire to cancel orders , for tops and yarns; but if any contraction in the demand for finished goods should take place, the effect will at once ■ be felt on the' unsold raw material. Sir John Higgins, chairman of the Central Wool Committee for Australia, in speaking to a deputation of wool- . growers in Melbourne in December last, stated that he did not consider it possible for the wool appraised in Australia to June 60 next, plus stocks on hand at the time, to be lifted before the end of December. 1920. He added that the solution of the present congestion was not in merely transporting the wool from Australia to England or elsewhere, but in getting it into consumption as manufactured goods. Restriction in textile production certainly gives grave cause for apprehension. It is estimated that. Germany’s inability to purchase results in a reduction of 20 per cent, of the world’s textile production. France is reported to have lost 60 per cent, of her textile machinery bv enemy action, and it is also estimated that the restriction of working hours in England and the States results in a loss of production of 15 per cent, and 10 per cent., respectively. I am informed on very good authority that up to three months ago po additional combs or spindles had been added to the mills in England, as all efforts were being concentrated on replacing machinery that had got into a very bad state of disrepair during the War. There seems, therc-fo7-e, to be very little prospect of increased consumption during the next few months. * I note that Sir Arthur Goldfinch estimates that a considerable ouantity of coarse crossbreds will bp held over this vear, and I take it that there will also be a considerable ouantity of old clip on hand in New Zealand at the end of the year. If such should be the case, and unless shipment can be guaranteed by buyers, I I fullv expect that Bradford and foreign houses will not operate at all in the Dominion. If, on the other hand, prompt, shipment can be guaranteed, I think that buyers will be prepared to operate in the Dominion from the advantage thev will obtain in financing on drafts payable on maturity in four months’ time, ns compared with practically cash payment in London. The question of price will, of course, be governed by conditions in London at the time, and if by arrangement the Imperial Government hold prices up, then it is up to us to regulate our shipments so that we will not have large supplies arriving at any one time on an already overloaded market. Australian woolgrowers have, during the past few months, become concerned as to the future of their product, and

a scheme is now being organised in ths Commonwealth to regulate shipments, in view of the large quantity of the old clip that will be on hand there at the time the new clip conies on to the maw ket. In New Zealand, however, no action has yet been taken, although, for reasons I have mentioned, the Australian woolgrower appears to bo in an infinitely better position than the New Zealand grower. To my mind the extension of the commandeer for wool, while congestion last;-, is equally as desirable as the extension of the meat contract. Apparently, however, the Imperial authorities arc not inclined to any such extension, and my object In writing you is to emphasise the necessity f»f producers’ combining so as to formulate a scheme by which shipments of wool may be equally spread over the period of congestion. j The scheme proposed by the Australian woolgrowers is set out in the Pas- , toral Review of February 1(5, and, of course, necessitates close co operation of all woolgrowers, and legislation to givo effect to the scheme. In arriving at my conclusion regarding crossbreds, I have not taken into account the possibility of Central I Europe being placed in a position to purchase. Should the position of the I market improve, the effect would be to j improve the outlook for all wools, including crossbreds. —I am, etc., A. E. COOPER.