OUTLOOK FOR WOOL

Wanganui Chronicle, Volume LXXVI, Issue 18073, 11 January 1921, Page 5

OUTLOOK FOR WOOL

POSITION IN BRITAIN. THE NOVEMBER SALES. FURTHER FALL IN VALUES. (N.Z. Herald Correspondent.) LONDON, Nov. 18. “Free” as well as Gofisrnmentowned wool was included in the offerings at the seventeenth series of colonial wool sales, which started ja November 9th. There was a good attendance of the Home trade, while the United States and Continental buyers were fairly well represented on the opening day, when only Government wool was offered. Owing, however, to the “reserves,” particularly for merino, for the most part being far above the ideas of the market, comparatively few lots were disposed of. In the circumstances the New Zealand Loan and Mercantile Agency Company remark that it was hardly possible to form any true idea as to the position as compared with the close of. the preceding series, but so far as could be judged from the lots sold, values for the best merino marked a decline of 10 per cent., and for average to inferior sorts 15 per cent, to 2 0 per cent., while crossbreds ruled 20 per cent, to 25 per cent, lower. The first “free” wool sale took place on November 11, when some 606 bales of Australian merino were offered, the bulk of it finding good competition at about the level of prices established at the opening, up to 3(id being realised for greasy AA combing and 35 %d for greasy first combing. Since the opening there has been no material change in the position, withdrawals continuing to be heavy.

REASONS FOR PRESENT SLACKNESS. The postponement of the auction on account of the coal strike did not greatly inconvenience the trade as a whole, as the majority of users, in consequence of the sluggish demand, had still a fair amount of stock. In a few instances, however, buyers short of supplies, in ’order to fill pressing requirements, purchased a few hundreds of bales which had been passed in at previous auctions. The New Zealand Loan and Mercantile Agency Company sav that all through the various stages of mani’ulation stagnation reigns, particularly among the actual manufacturrs, who find the greatest difficulty in getting old contracts taken up. This reacts unfavourably on spinners, and lower down again in the process of manufacture on topmakers. Hence it is not difficult to account for the present slack state of affairs. Supplies are large—far larger, indeed, than the demand—

end this can only in the long run mean lower prices. If anything, merino wools are better situated ihan crossbreds. These latter came into direct competition with similar woo' from the Argentine, which has been selling at pence per pound below the present Government controlled price. FOREIGN EXCHANGE DIFFICULTY. I It has all along been hoped that I means would be found of enabling , Central Europe to stock up with raw material, but with foreign exchanges i continually growing worse the prob- | iem is rendered more and more diffii cult. All the same, a report is current that in the case of Austria a credit, has been arranged by the Imperial Government to the extent cf about £BOO,OOO for the purchase of raw wool. As things stand at present the plain facts are that supplies far exceed the demand, and until this is altered it is impossible to escape the convction that values must continue downwards. The “S” series of Government sales will open on December 7. The National Mortgage and Agency Company write that at the moment the news from the manufactur--1 in.g centres as a whole is not encouraging. There is a fair amount of work being put through on old contracts, hut the amount of new business offering is small indeed, and in many cases manufacturers are only working half time, so with prices on the down grade, as they have been lately, there is no disposition to dj* more than is absolutely necessary for pressing requirements. An unpleasant feature is the large cancellation of orders previously given out, which further tends to discourage business. Merino tops are being offered for delivery in the new year at prices somewhat below the clean scoured cost at the late sales here, while in medium and the coarser crossbreds there is hardly anything Going. It is reported, however, that some coarse crossbreds of 36’s’qualitv have been bought for Germany. All things considered, it will be seen that immediate prospects are not bright.

“MOST UNWISE POLICY.” A correspondent, in Bradford writes that atl the Government crossbreds are now being sold at a loss, and it is not likely that any improvement will take place if these stocks are held indefinitely. So long as prices are pence per pound lower in South America, and the coming New Zealand clip is likely to lie equally as cheap, home and continental. buyers will not be ready to take the crossbred wools which are now in this country, and a much better policy would be to encourage buying by meeting the market. As a matter of fact, South American crossbreds are being offered freely in Bradford at the same price per clean scoured pound as the Government wants for its greasy wool, and so long as the Bradford and Continental buyers can purchase freely in Buenos Aires at. such low prices they will not take colonial crossbreds unless they are compelled to do so. There is also a need for a reduction in Government reserves on merinos.

The time has arrived when the department should be prepared to encourage business by meeting the market, and to give the selling brokers more latitude iu accepting or refusing the bids. It has been thought for months that it was a most unwise policy to refuse blds that came within a farthing of the reserve price, for when the same wool is offered later the chances are that a still lower price will be bid. A very large number ot lots have been taken in that ought to have been sold, and for which sensibly lower prices have been offered when put up for sale a second lime. The effect of the weakness in London has been felt in the consuming centres, where new business has been checked, end where there is evidence of little, if any, improvement. A decent trade continues to be done in tops with Germany by Bradford export houses, but there is no improvement at the piece end, this being the section in whiqfi a turn for the better is most urgently needed.