THE SALES OF WOOL

Timaru Herald, Volume CXXXVIII, Issue 19986, 19 December 1934, Page 8

THE SALES OF WOOL

Considerable discussion has followed the results of the first Timani wool sale of the season, because of the comparatively small catalogue of wool presented. The decision of the authorities to restrict the sales in Timaru to two, has not produced a satisfactory result, particularly in view of Monday’s offering. The wool-brokers’ estimate of the South Canterbury clip places the number of bales available for the sales at 31,000. If then there has been any considerable tendency to restrict the wool offerings this year, a very large catalogue will be presented at the second sale. The allocation at the first sale was 20,000 bales and the offering was 8386 bales, leaving something like 23.000 bales available for the second sale. The wool brokers suggest that it would be difficult if not impossible to handle such a quantity of wool at one sale. The suggestion that a third sale may be necessary is already being discussed in wool broking circles; It was important to remember, said one buyer after the sale on Monday, that requests for additional sales did not mean that they would necessarily be held. Nor did it mean that if the sales were arranged, there would be a full attendance of buyers. The buyer added that it was in the interests of growers to fill the allocations for the second series of sales. This would get rid of some of the surplus and the farmer was likely to do better out of offering his wool now than waiting for a doubtful improvement in the market.

“Timaru is in a slightly different position.” he added. “There were three sales there last year, and it would not be any great trouble if we had three again this year. After all, it is on our way south, and though I am of opinion that two sales are enough for Timaru in a normal season, I can plainly see that three will be necessary this season.”

It may be mentioned that the roster of wool sales in New Zealand each season is arranged by agreement between the buyers and the brokers. With the Government keeping a watchful eye on the interests of the producers. The list is invariably drawn up to fill the season comfortably, and additional sales are not welcomed by the buyers. Nevertheless, the somewhat strained condition of the wool market may induce all parties to modify their views in relation to the roster of sales. The wool sale in Timaru was regarded by wool interests as the most encouraging auction of the current season. Values were slightly in advance of Christchurch rates. The reports show that apart from the actual rise, there was far more animation in the bidding than there has been so far this season, and the offers were coming from all quarters. It is true that many of the Continental buyers, and to a less extent the Bradford representatives, appeared to be working on very strict limits, but there was a spirit in the bidding that was absent from the Christchurch sale. Generally speaking growers showed a willingness to meet the market, although the producers were by no means pleased at the trend of prices. Every year, however, the difficulties associated with financing foreign purchases of wool are increasing. The cable messages this morning indicate that the Australian Government has made a thorough investigation into the possibilities of meeting German wool buyers in relation to finance. It has been discovered, however, that the German buyers are showing a disinclination to purchase Australian wool unless an equivalent measure of German business can be transacted in Australia. The Federal Cabinet has made up its mind that it is impossible to meet the exchange position, particularly as Germany is on the gold standard and Australian exchange has been raised to guch a high level. At the wool sale in Timaru, however, bidding was keen, all operators competing with a willingness they have shown nowhere else in New Zealand so far. The recent appreciation on the London and Sydney markets, amounting to about 5 per cent., was immediately reflected, not only in the slightly higher values paid, but also in the bidding itself. New Zealand mills took the cream of the offering, and bid steadily for the better class wools, but there was an excellent enquiry from Bradford and Japan, and France and Germany showed a great deal more interest than they did at Christchurch. It is interesting to mention that at the Timaru sale one French buyer was in possession of his first buying order for the New Zealand season. The wool situation is by no means clear; the decision of many producers to hold back their wool on the chance of an improved market later in the season, is deplored by the buyers wlio are, after all, almost completely at the mercy of wool prices in other countries with the added difficulty that all the buyers are obviously operating within narrow limits, because of the uncertain outlook in many consuming countries.