The Wanganui Chronicle. THURSDAY, SEPTEMBER 5, 1946. THE FUTURE PRICE OF WOOL

Wanganui Chronicle, 5 September 1946, Page 4

The Wanganui Chronicle. THURSDAY, SEPTEMBER 5, 1946. THE FUTURE PRICE OF WOOL

JT is as unwise to prophesy in respect to prices just as it is in respect to anything else. The early resumption ot the Dominion’s wool sale, iu London, however, is prompting many people to indulge in speculation as to how prices will move. The grower hopes that they will move upwards; the topmaker and spinner expresses the view that there will be no skyrocketing of prices. With him the wish is father to the thought. When a. major war is being waged it is essential that the belligerent countries secure wool supplies ahead of their requirements. This is especially so with a maritime country such as is the United Kingdom. When hostilities cease the Government is faced with an accumulated supply on its bands and a demand on the part of producers in various parts of the world to have their yearly elip sold and sent into consumption. The marketing of the surplus then becomes a major problem of management. Following World War I. a large quantity of wool was held as a surplus. The higher prices rose the more dangerous was the condition of the market. If the surplus were to be thrown on to the market prices would break. By careful nursing the surplus was gradually released as the market recovered its capacity to absorb and the shock of a sharp fall was consequently avoided. That experience will be available to guide the authorities in the United Kingdom when handling the surplus that now exists there. Commercial interests have secured considered quantities of wool already, and there may not be therefore an exceptionally keen demand for wool at the forthcoming sales. On the other hand there might be; nobody can be sure. Taking the world as a whole, it eau be said that there is a great dearth of woollen goods; that this unsatisfied demand will require a considerable time to be appeased, and that until then a seller’s market will continue to exist. This condition should gradually ease as the more urgent demands are met.

The major factor in the lifting of prices during the inter-war years was the bidding of Japanese buyers. Their operations within Australian and New Zealand markets were sufficient to lift prices by about twopence a pound, for it was possible for these buyers to bid up prices in the South Pacific because it was reckoned to be cheaper by that amount to buy here than to buy in London. The policy of Bradford appeared to be to let the Japanese buy early, and when their competition was thereby eliminated to operate on the market under easier conditions for themselves.

It is improbable that Japanese competition will be a factor in any forthcoming sales in New Zealand, and it is equally improbable that the German manufacturers will be in a position to enter the lists. So long as the Russian delegates can hold up the peace settlement of Europe wool and other products are. likely to trend toward lower levels. There are therefore opposing forces operating in the wool market to-day: a limped buyers’ bench and the force of a widespread unsatisfied demand. To what extent have the textile plants of the United Kingdom been damaged and destroyed, and to what extent is this true of Germany and Japan?

If it should occur that the prices of fine wools move sharply upwards Ihe tendency of manufacturers of cloth will be to turn towards the crossbred qualities and to make the rougher fabrics from these crossbred staples. The market never moves in sections: it moves as a whole, both fine and coarse wools moving in sympathy with each other. It is the changeover from fine fabrics to coarser ones, however, that presages a change in general price values for raw wool.

The opening moves in the wool market will be watched with interest, but equally important will be the decisions made by the world of fashion. Shorter skirts and jackets and tighter-fitting garments result in a considerable reduction in the consumption of wool of all sorts by each individual. After World War I. clothing became less voluminous, both for males and for females. To gauge the future of the wool market, then, it will be desirable to lake a peep at Dame Fashion occasionally. The Eternal Feminine seems to be ihe decider of the destinies of the man on the land, even though he doesn’t think much about her and she thinks nothing at all about him.