THE WOOL MARKET

Wanganui Chronicle, Volume 74, Issue 144, 20 June 1931, Page 8 (Supplement)

THE WOOL MARKET

AN AUSTRALIAN REVIEW BUYERS’ CIRCUMSTANCES Given a return to stable financial con itions in the world, wool-growing ihould again prove a profitable industry |a Australia. This is the opinion of Messrs Winchcombe, Carson, and Co., (Sydney, in reviewing the Australian season. I’he firm believes that, with a normal currency (that is, when ex change rights itself), an average price •f lid or 12d per lb looks possible for the Australian clip, and :• •' level is approximately 25 per cent, above the 1913-14 basis. At that range the use ©f competing artificial fibres should be kept in check, as it has been for the ya-t two years. As to the past season, values for wool ’descended to levels without precedent for 28 years, but made one of the (quickest recoveries trade has ever seen. Australia as a whole had a bad wool Tear. Two years ago the Commonwealth grew 2,862,877 bales, which on the Australian selling average of 21 12s 2d per bale were worth £61,800,000. For the full 1930-31 season the value rrf the wool produced will be about half that total, and some millions less than the preceding 1929-30 clip. No Carry-Over The new selling season opened with practically no carry-over on hand in Australia and the prospect of reduced supplies. In normal periods that, circumstance could be expected to have a stiffening effect on demand. But confidence had been undermined in every ramification of the wool consuming world. Prices for the raw' materials,, tops and yarns, had been gradually receding since August, 1928. Fine wools were least affected by market fluctuations. Inferior fleece lines and the less attractive skirtings were responsible for the fact that so many clips realised returns under prewar results. The following figures illustrate the situation. They cover merino fleece types at the lowest point of the market in January last, and at the same date in 1914': d. d. d. d. Extra super merino fleece 14 to 16 16£ to 23 Super merino fleece ll|tol3| 14 to 16 (rood merino fleece 10 to 11 10 to lo Medium merino fleece 84 to 9j 74 to 91 Inferior merino fleece GJ to Sf 5 to 7 Nervousness exhausted itself in January through the very cheapness of the article commanding attention, and that was a sound basis on which to restore confident feelings. Values rose with a rapidity seldom, if ever, equalled in the trade. In five weeks an average advance of 25 per cent, to 30 per cent, was recorded in merinos and crossbreds. The less attractive lines of fleece and skirtings, which needed the advance most, benefited to the greatest extent by the stronger inquiry. The figures below show the extent of the recovery. They cover the clean cost of average 64’s top-making merino fleece wools in Sydney stores at the dates mentioned: d. d. September• 20 October November 2 December 47 January February .. .. 19 March 22 April 23 to 24 Who Bought Wool Messrs Winchcombe, Carson, in following the wool sold, state that Yorkshire had a year of much curtailed trade, and her drop in business was reflected in diminished activity as a wool buyer in Australia. France has of latej years bought more wool in Australia than any other'country. Weak values early in 1931 were to an extent due to lack of French inquiry. Japan dominated the market at periods of the season, and her buying orders were generally more consistent in volume than

those from any oiher consuming country. On occasions when demand from elsewhere was weak. Japanese buyers were chiefly responsible for keeping sales moving. The volume of German demand for wool had given no cause' for complaint in Australia. The staple had certainly been bought at low cost, but in the first seven months of the season exports from Australia to Germany totalled 227,579 bales, an increase of 62,225 bales compared with the previous year. Competition for the better grade merino wools benefited particularly by extensive purchases on behalf of Swiss spinning mills. Belgium had severely felt the slump, in trade, so the dullness of demand for inferior skirtings and fleece wools in Australia was accentuated.

The United States gave no great additional strength as a purchaser of Australian wool; but the higher tariff, making the duty on wool entering the States 17d on a clean scoured basis, had been of negligible benefit to the Australian grower. Australian manufacturers were a factor in the market. They have trebled their consumption of wool during the last 20 years. They now use in the vicinity of 180,000 bales annually.