DECLINE IN WOOL PRICES IS SERIOUS.

Star (Christchurch), Issue 19033, 31 March 1930, Page 7

DECLINE IN WOOL PRICES IS SERIOUS.

INDICATIONS POINT TO BUYERS’ RING, IT IS SAID. (Special to the “ Star.”) AUCKLAND, March 29. “If there is no corresponding increase in price what does it profit the grower if the demand at the wool sales is keen?” This was-the question asked by Mr A. E. Robinson, provincial secretary of the New' Zealand Farmers’ Union, this morning. Spirited competition at the prices ruled yesterday, he said, was merely comical. Mr Robinson said that the trend of prices for wool appeared to be downward. The president of the Bradford Manufacturers’ Association had said that prices for wool had to come down to the pre-war level. That would affect New Zealand directly, inasmuch as it meant that wool values would be forced down instead of coming down naturally in conjunction with other • commodities. “Much heart-burning has been caused amongst woolgrowers by the suspicion that a buyers’ ring has been formed and . has been operating,” continued Mr Robinson. “Whether this is so we cannot • say. If such a ring exists the odds and ; ends such as bellies and pieces would , not be likely to be included, and it is i noteworthy that rubbish brought al- ; most as high prices as good wool in \ many cases. It does not seem reason- * able that prices should go up after so > many buyers had fulfilled their require- ; ments at low prices, nor does it seem 5 fitting that hard-up Russians, who are ; not likely to be in the ring, should get ; the best of the ring. Indications as I [ view them, point to a ring, for although ? some of the indications are otherwise ex--1 plainable they do not all .fit in with any * other theory.” i Mr Robinson said that farming in t New Zealand had enough resource for two lean years, but a third would mean * disaster. Much of the hilly country in r the back districts was suitable for sheep ' only, and all the time was going back. * If farmers could not afford the money to buy fertilisers the country would * produce nothing and the farms would ‘ be useless. People in the towns would . not feel the stringency at once. There : was a large financial pool based on old • returns and old costs, but the pool was not inexhaustible. Once the inflow - ceased and the outflow began economic • ruin would be faced. [ Mr Robinson went on to say that . 92d (the top price yesterday) did not i repay the cost of production. A ship- ; ling per lb, generally speaking was a fair thing and relative to the rise of ? costs both of New Zealand and other ’ parts of the world. It was the same from the standpoint of the individual. • The majority of farmers had their land 1 mortgaged and they looked for fair ; prices to carry on their business satisfactorily. Many of the growers on the high lands of th'e .South Island would have to make an adjustment between themselves and the mortgagees otheri wise there was nothing for it but abandonment of their holdings. The final result was likely to be aggregation, in spite of increased taxation, abandon--1 ment of many farms, fewer stores for fattening and a corresponding drop in , the fat lamb trade. “The outlook is black,” said Mr Robinson in conclusion, “and people in New Zealand fail to grasp the significance of the present situation.”. The president of the Auckland Woolbrokers’ Association (Mr B. J. Marquet) said that a wool buying ring did not exist. He added that some firms in Bradford which two or three years ago were financially sound now/bordering on ruin. It was the old question of supply and demand. The demand for New Zealand wool was falling, and the wool was wanted only at certain prices. Despite the lower prices for wool there was no appreciable difference in the price for the finished article. He thought that the profit was swali lowed up by tfie middleman. "‘There will be well over 100,000 bales of wool held over in New Zealand,” concluded Mr Marqfcet. “This is either in hopes of a better season next year or an improved London market. I do not think that the holding over of wool can improve the situation. As the Australian wool is also going* on the London market, and with so much wool to choose from prices will not be suffi- - ciently advanced to repay the cost of transportation. There is no doubt, however, that the economic situation is a very serious one.”