BRITISH MARKETS DIFFICULT

Timaru Herald, Volume CXLIII, Issue 20891, 22 November 1937, Page 9

BRITISH MARKETS DIFFICULT

EFFECT OF COMMODITY MOVEMENTS

INFLUENCE OF AMERICAN SITUATION

United Press Association—By Electric Telegraph Copyright (Received November 21 6.30 p.m.) LONDON, November 20. A week, which opened poorly, owing to the disappointment associated with President Roosevelt’s speech, has gone from bad to worse. The Government Is trying hard to stimulate reluctant investors with sunshine talk, but It is merely being accused of "talking its own book.” It is becoming increasingly clear that the future depends on the United States, but thus far President Roosevelt has merely raised criticism from right and left alike. The week’s one bullpoint comes from Brazil, which has decided to pay the current interest. The investors, however, want to know how much they can expect in the future. The gilt-edged proved that its vulnerable weakness may have been partly due to the underwriting of the Commonwealth Conversion issue.

Uncertain Wool Market The withdrawals from the wool sales were less frequent towards the end of the week and competition improved in all sections. The Industry is experiencing serious difficulties, through the steady fall of prices. The optimists maintain that inquiries received indicate that a good deal of business Is waiting to be placed directly confidence is restored. The conditions of the crossbred section of the trade is difficult, and quotations vary so widely that traders have no reliable guide to replacement costs. The London sales have not given much help, and attention is now concentrated on the opening of the New Zealand selling season. Stocks of crossbreds In Yorkshire are lighter than usual, thanks to a large demand for decorations at Coronation time.

Fall In Butter Prices The catastrophic fall In butter has been checked, at least temporarily. The tone is steadier, but there is little real confidence in the future. Buyers seem convinced, as time goes on that lower prices will develop. The total imports of butter from all sources in October, was 35,300 tons, compared with 38,870 tons last year. The principal decline in supplies was from Russia. Stocks in cold store at November 6, were 10,070 tons, compared with 21,290 tons last year. In contrast with butter, the stocks of cheese have Increased and totalled 10,090 tons at the beginning of November, being 3,250 tons above the same date last year. Last week’s improvement has not been maintained, indicating that in the early seventy shillings cheese is high enough.

Wave Of Egg Buying There has been a wave of egg buying, owing to small arrivals, and values will possibly appreciate in the coming week.

OUTLOOK FOR WOOL LOWER PRICES IN LONDON EFFECT ON DOMINION SALES Bv Telegi tph Pres? Association CHRISTCHURCH, November 20. High prices for wool last season provided New Zealand with an example of how prosperity is bound up with markets overseas. Last season’s wool cheque amounted to just over £15,000,000 on an average price of between 15d and 16d per lb. Roughly speaking, this means that every Id rise means a gross return of about £1,000,000.

In view of this position, the reduction of 5d a lb experienced at the opening of the London wool sales would mean a reduction in New Zealand's Income of about £5,000,000 if the reduced price pertained throughout the wool-selling season. Fortunately, there is no guarantee that such will be the case although wool interests are definitely convinced that prices will be below last season's rates.

Trade With Japan Uncertainty exists as to the effect on the market arising from Japan’s activities in the East. In some quarters, It is feared that the limitation of credits for Japanese wool purchases, on account of war commitments, will seriously affect the coming season’s sales. One man with considerable experience of the wool market, however, does not consider that Japan's purchases will affect the market price to any great degree. He argues that any reduction in Japanese purchases will only affect the quantity of manufactured goods which Japan will have available for export. The markets, which, in normal conditions, would receive those goods wUI be compelled to buy their supplies elsewhere. This in turn will mean that Britain and other textile-manufacturing countries will take increased supplies of raw materials.