CRISIS IN WOOL MARKET.

Timaru Herald, Volume XCVIII, 11 May 1925, Page 7

CRISIS IN WOOL MARKET.

Through American Spectacles.

GROWERS’ ACTION DEFENDED

By Cable—Pres. Association—Copyrlgll. Australian and N.Z. Caole Association.

Received May 10, 5.5 p.m. NEW YORK, May 8

The situation which has developed in the world's wool markets is interestingly reflected here, both as to tflv. actual market conditions and comment in various quarters. Considerable attention has been given to Mr Elder’s report to Mr Bruce which was recaoled from Australia to the “New York Times,” and the opinion is expressed that the report probably touched upon the ’ underlying psychological and social conditions affecting the wool trade in America. Pessimism in U.S.A. The recent cancellation of Colonial wool saies, ami tno peculiar situation at the London auction, coupled witii luonuay's cancellation of tno sale an Jbrisuane, and to-aay's action ot tno Australian growers, has developed suinewnat pessimistic expressions m wool circles. Tiie •*JNe\v York Times” wool editor, generally reviewing Hie situation, says mat wnat was indicated a long time ago regarding the wool saies, is now generany conceded. This, is, that they cannot do maintained at anywhere near the lngh levels whereto they were pushed uy speculative interests last year, Tho euitor comments that it a drop in prices at the recent auction sales anq, the withdrawals continue, there is bound to be talk aDout curtailing • sales or stopping them' until a hotter tone is noticed in the market. No one seems to be clamouring for wool, at least not at prices winch holders insist upon getting before parting with their supplies. The more wool that is kept from sale, the greater available stock will pile overhanging the market and tending to depress prices. Wool consumption by domestic American mills is not on' a largo scale. The amount used in March was 45,852,0001bs in the grease, equivalent to 2,000,0001bs less than in March, 1924. The deficit would have been more but for an increase in the use of carpet wools. Outlook Not Promising. The Bos Lon Commercial Bulletin, commenting on tno rebently bemoaneu instaoniLy, says me uncertainty tnat nas overtaken tne American wool market, tends to predict even less satistaccory conditions, and by inference concludes that the Australian occasions concerning the sale of wool supplies are largely responsible far this stuie of affairs. Generally speaking, wool circles are finding fault with tno holding back of supplies abroad, and asservute the impossibility of the maintenance of nigh prices by withholding onerings. Tile happenings at the London auction sale were xreeiy predicted, and no surprise is expressed when the news came to hand. It had been discounted in advance. Not Unduly Frightened. The New York Journal of Commerce states the selling factors insisted that they wer# not unduly' frightened over the situation, because it was felt that wool had to come down. It can be said generally speaking that American interests want lower wool prices. Defence ,of..tho. Grower. Mr Elder (Australian Commissioner in the United States) gave the Australian Press Association the following comment on the . wool situation. He said the methods applied to selling Australian wool are not different to the methods employed in respect to other commodities, excepting insofar as tho figures relating to the year's clip are usually , more accurate than in the case of the season’s export of butter, or meat, or the year’s crop of wheat. Methods in regard to the sale of Australian wool are clean, scientific and well regulated. t Sellers, when the market is especially adverse, as it is in the case of wool, invariably curtail their offerings.” It seems tome absura to push the sale of wool when there is such a marked disinclination on the part of buyers to operate. Tho situation would be very different if the world’s requirements, for wool were less than productions, but the general statistical report shows this is not the case. Wool has had a spectacular rise and is now suffering a spectacular drop; as sometimes happens when the crack starts, it widens into a gulf, more, because of the psychological effect, rather than any sound reason. The co=t of the manufacture of woollen goods in the United States has enormously. increased, and'to a very much larger extent than the rise in the price of raw wool, and for this and other reasons. fm-h ns indicated in my repeat to Mr Bruce, the demand fm iroollen goods has materinllv decreased. Many factories are already operating e+. less than one.-third full capacity. There is nothing pew in the carry over ef one season’s wool to another, and f ho prospective <carry-over of -Australian wool, when compared with the world’s wool requirements j s *> relatively small thing. -• Thus while the Australian wool grower can and does rermloto the market for his Product, and thus secure best prices, he must ulfinmtelv accept the' price that the world can pay. -He is not and never oop he in a position to arbitrarily fix the price for his eommoditv. ' The roeent increase in. the price o f Australian wool, onlv represents » W shill■"crs in the price, of a, suit of clothes. Thus America must Took elsewhere for masons that hot- wool trade is in nrcsopt pnrnti.sfno+ory state. The World must h" arid wool m”st eontinito fo he need in Inereasintr oi.«Tt+it?os, Tt mopis +e me fhern is no ’’'"tificofion for tiltT'n pessimists TVool is n eommoditv that hns and yill nonf'nno to mtffor many flttcf tint ions Is tho fiifnre. Psoh n —i.—« is in-rltnbk* "”'1 is n o'-msinn —s.-ld ovneriosoo Ip nil commodities used by the people.”