The Timaru Herald TUESDAY, DECEMBER 12, 1933. THE BRIGHTER OUTLOOK.

Timaru Herald, Volume CXXXVII, Issue 19670, 12 December 1933, Page 8

The Timaru Herald TUESDAY, DECEMBER 12, 1933. THE BRIGHTER OUTLOOK.

Although Mr C. S. Hammond, who spoke so illuminatingly at the weekly luncheon of the Timaru Rotary Club yesterday disclaimed with characteristic modesty, any right to be regarded as a prophet or even an economist or financier, he nevertheless treated the Rotarians and their visitors to a most comprehensive and informative review' of the market prospects of the products of the Dominion. Moreover, in sounding a welcome note of optimism, Mr Hammond was scrupulously careful not to indulge in that over-optimism which might tend to give the community a false sense of the progress the country is slowly making along the road to economic and financial recovery. There are, Mr Hammond admits, with refreshing frankness, manifest signs of the return of better times for the wool grower. In a brief and lucid statement, Mr Hammond furnished an easily understandable explanation for the rise in the market price of wool; “A rough computation showed the world production at about 11,000,000 bales, which represented approximately 61b. a head if the total was divided amongst the nations wearing woollen goods. In analysing the reasons for the rise in wool prices it should first be pointed out that in New Zealand this year the reduction in flocks had resulted in a wool shortage of 35,000 bales while the carry over was 50,000 bales. The severe drought conditions In Australia had affected production to the exent of 400,000 bales, while the carry over there was 100,000 bales. It had been estimated that owing to the dry conditions In South Africa 25 per cent, of the merino sheep had been lost, and this would mean a wool short-

age of 225,000 bales. Last year the carry over had been 50,000 bales, but this year it should be negligible. The total shortage of 860,000 bales was close to 10 per cent, of world production. Australia and South Africa's shortages comprised principally the finer wools and this was why this class of wool had risen so appreciably.

Put plainly, the wool market has merely responded to the operation of the law of supply and demand. Wool-buyers in all countries fear that their requirements will not be easily satisfied. Hence the almost sensational rise in the price of wool and the sustained competition, which means the maintaining of higher price levels for a commodity that is in substantially smaller supply this year. It is, of course, most encouraging to have the assurance of such a keen and dispassionate observer of the march of world economic event*—who furnishes chapter and verse for his conclusions—that it “appears reasonable to assume that we can look for a higher level of wool values for some time to come.” Mr Hammond’s review of the prospects for meat and dairy produce is no less informative than his treatment of other phases of the pastoral outlook. He not only passed under review the problems confronting the primary producers of the Dominion to-day, but he warned the farmer of the pitfalls that await the man on the land who follows the way of the speculator. “Those who regularly follow the practice of disposing of their commodities as soon as they are available,” declared Mr Hammond, “show the best results over a period of years.” In passing under review the situation as it confronts the dairy farmer today, Mr Hammond did not attempt to gloss over the unfavourable features of the butter and cheese export trade, with mere generalities. Indeed, in expounding his own considered conclusions he made a most impressive point when he stressed the vital importance of stimulating a substantially larger consumption of milk and milk products by the people of New Zealand. Not only would the dairying industry be given a much needed lilip, but the rising generation would immensely benefit from the consumption of this most natural and nutritive food. The quest of new markets offers a wide field for investigation. The conclusions of a recent visit to the East were offered as a probable solution of this problem: “The more one considers the East as a market the more one is impressed by its possibilities. I do not know ol anyone who has investigated the matter at all who has not been convinced of this. Australia and New Zealand are the natural suppliers of pastoral products to the teeming populations of Asia, and especially of China, Japan, Dutch East Indies, and the Phillipines." It is just as well to point out, in passing, that already the Departments of State closely interested in discovering new markets have in their possession the most comprehensive report on trade prospects in the Orient; but the biggest obstacle to overcome appears to be the distate of the great masses of the crowded Orient for butter and meat. Mr Hammond's review of the pastoral outlook represents one of the best informed contributions to contemporary discussion on one of tlie most important topics of the day.