The Wanganui Chronicle. TUESDAY, OCTOBER 28, 1947. JAPAN’S TEXTILE INDUSTRY

Wanganui Chronicle, 28 October 1947, Page 4

The Wanganui Chronicle. TUESDAY, OCTOBER 28, 1947. JAPAN’S TEXTILE INDUSTRY

THE high prices attained at the recent wool sales in New Zealand dispels the idea that the absence of Japanese competition will lead to lower prices. This opinion, however, is supportable only on the medium short run. Past experience has shown that. wool is one of those materials which arc economic barometers. In times of prosperity the price of wool rises; in times of ilepression the price of wool falls to low levels. It is to be assumed today that this reflection of general conditions will continue to be a feature, and a permanent feature, of the wool market.

The reason for the variation in the price of wool is not difficult to discover. Wool enters into clothing and house furnishing. At no normal time does the world run to such a condition that it must have wool to replace wearout. There is always a margin of wear remaining in a discarded garment, blanket, carpet or furniture-covering that can be exploited in times of adversity. The suit can be sent to the cleaners several more times, and the underclothing can be darned with greater diligence. When times arc not quite as good as one would like the individual consumer exhausts his wardrobe. The layoff in consumption thus occurring leaves the raw wool market with a surplus of wool for whieh there is temporarily no demand. Then down tumble prices. Australia is said to have a monopoly of fine wools. The price for these fine wools may recede in bad times, but seeing prices for other goods move downward in sympathy the loss to Australia is to some degree offset. Wool prices, however, go further and rise higher than do manufactured goods, and the problepi is to guage when to market one’s wool. In times of very high prices the tendency is for fashions to change so that fabrics made of coarser wools are made available to the public. In times of prosperity then, there is set up a series of reactions within the wool market itself which operate to prevent a flyaway movement. Whey, then, has the market now moved to such high levels"

The world has been using up wool ;it a great rate for six years. The hard wear given to his clothes by a soldier, and the inability to repair them, results in much more raw wool being consumed than normally. The shortage of manpower in the pastoral industry tends to bring about a reduction in the 'number of sheep to he shorn, while the deterioration of pastures is another limiting factor. The need for meat in wartime, and the necessity for sustaining the supply of milk for an urban population, concentrates upon sheep the task of providing the needed protein supply. Following the war the devastation caused bv adverse weather conditions lias nggragvated the sheep shortage in the consumer countries. The reduction in economic activity is tending to reduce incchnes at n time when taxation of private incomes remains high. Britain, therefore, must concentrate upon her export markets, supplying them with the. high-quality fabrics which the dollar countries demand. If Britain gets back on to an even keel in time the slide down of wool prices should not be severe. There is such a stored up demand for woollen fabrics of all kinds in the world today, which demand is actually increasing, that it can be assumed the demand side of the market will continue strong for n long time to come. The absence of demand for raw wool from Japan will not be felt even after the dollar demand foi' wool has been eaught up.

General .MacArthur has evidently decided that the economy of Japan shall be speeded up in order to enable the people of that country to stand on their own feet once again. In order 1o achieve this it will be necessary for the United States to finance the economy of Japan for some indeterminate time. From the American standpoint the shorter the period of Japanese dependence upon American aid the better will it be for both parties. Further. America has a desire to see her market for long staple cotton revived in Japan, and Egypt will be equally anxious on that particular point. Japanese exports of fine cotton fabrics will clash with Lancashire interests which will depress the British market, at least to some extent. Japanese domestic consumption of fine cotton, however, will be dependent upon the country’s ability to re-establish her whole economy, and that implies the-re-establishing of her woollen textile industry. In order to do this it is probable that America will finance that particular section of the textile industry to the benefit of New Zealand. Assuming that this is the American intention it is not to be wondered at that she should look to New Zealand for .some quid pro quo for such benefits as her policy in Asia confers upon the woolgrowers of this country.

It is not to be assumed that because American policy directed to the stabilisation of conditions in the Orient having favourable reactions in New Zealand, the I nited States is entitled to ask for concessions on that account alone. Japanese demand for wool will be welcome in Nev.- Zealand, but the return of such competition does not make possible for New Zealand to abandon in consider alii? measure her trade relations with I ho United Kingdom. Should the I nited States find it possible to open her doors to Now Zealand meat, butter and cheese. -hen the possibility of expanding imports from the I nited States will present fewer difficulties. Such a development oi New Zealand-American trade would undoubtedly confer benefits upon the peoples of the two countries while m no way hampering the recovery of Japan nor hindering the reciprocal ielat Unships that for so long have existed between the Motherland and ‘his Dominion.