THE WOOL POSITION

Taranaki Daily News, 13 June 1930, Page 3

THE WOOL POSITION

MARKET GROWS FIRMER DOMINION’S LARGE STOCKS. SERIES OF SALES ARRANGED. (Special Correspondent). / Wellington,' June 12. Wool, in sympathy with practically all other commodities, has declined in values, but there are reasons for believing that wool values. were depressed, to an extent that was scarcely warranted. The chief cause of the decline was the inability of Bradford manufacturers to compete in world’s markets owing to excessive costs of production. I'or a' long time employers had been endeavouring to reduce costs and the workers were asked to accept a reduction in wages, which was refused. Then Lord Macmillan was appointed to inquiry into the wages problem, and after an exhaustive examination of the position he recommended a reduction in the wages scale equal to about 9 per cent. The workers refused to accept this and a tense situation was created, so tense ; that prayers were offered in . the churches for industrial peace. The workers in some localities have regained sanity and have accepted the rcduction. .

This labour trouble was only one phase of the question. The Stock Market collapse in New York, which was on a large scale, reduced the price level of commodities, and if we look back it will be found that it was during the last quarter of 1929 and the -first quarter of. this year that the heaviest decline occurred. Wool was badly • hit —how badly cannot be realised unless one studies the course of prices over a long period. The best guide is the top market, tliat being the first process through which greasy wool is put. At the beginning of November last year 50’s tops were quoted at 23d per lb, by the beginning of January the price had dropped to 21d and by the end of March it had receded to 17d, a drop of 6d in the short space of five months; 46’s and 40’s showed the same movement. The progressive drop in vafiiea scared the buyers, for it was shown to be a risky venture to buy the raw material. The whole trade on the manufacturing side lost confidence, and the policy pursued was that of buying from hand to mouth. .

The progressive drop in values' meant heavy losses to the growers, and many wool men refused to accept, the ruling rates and preferred to hold over their clips. Kow the market shows steady improvement. The recovery in the wool market set in towards the end of March and has been steady ever since. - r . Reverting to the question of Bradford tops, at the end of March the quotation for s‘o’s tops was 17d and at the beginning of this month the price was 18£d; This advance has . happen- ' ed notwithstanding the general dullness of trade'and? the abnormal uilenipioyment in Europe and America, and this forces upon one the conclusion that there is an inherent strength in wool. It is to be hoped that it.is so. A very considerable quantity of wool was arrested from sale during the past season, and according to a compilation by the New Zealand WoolgroWerS’ Association the quantity of. wool held over is 140,718 bales, which is .very nearly 25 per cent, of the total wool production of the Dominion. Of the total, 82,36'2 bales, or well over s’o per cent., are held in the Wellington, Napier and Wanganui wool districts. . ' . In passing it may be pointed out that this, held over wool has made a big. difference . to . the export figures, of the country, for if we take the value of the bales at the low figure of’£lo per bale the total represents. £1,400,000, and if that had been exported it would have helped, to ease the exchange position. However, it is desirable that the bulk, if not the whole, of the left-over wool should pass out of the hands of growers before the next season opens, and to facilitate this the woolbrokers have.arranged for a series of ten winter sales, beginning with a sale at Wellington on Wednesday, June 17,. when . 2500 ..bales of fleece wool will be offered, as well as about 1500 bales of crutchings.xThe < quantity is small, but then it is not likely that there will be many buyers about. ’ ■: ‘ ; . Wool is in demand, and it is alleged that some wool speculators havebeen scouring the country trying to pick’up odd lots of the staple. There is no doubt that the wool position has undergone a favourable change, but growers must not expect too much. Those' who have bought wool during the past twelve months have lost heavily, and- it is not unreasonable oh. their part to endeavour to recover some part of that loss now that trade shows some signs of improving. It is very satisfactory that Bradford has succeeded in reducing costs of production, for Bradford, is the mainstay of the wool market.