THE WOOL POSITION

Waikato Times, Volume 93, Issue 14492, 15 October 1920, Page 5

THE WOOL POSITION

A CRITICAL SITUATION. LARGE EXCESS OF STOCKS. NECESSITY FOR HOLDING CLIP, (By Telegraph—Special to Times.) WELLINGTON, Thursday. Mr Massey told the House of Representatives to-day that he had received a very important cablegram from the High Commissioner relating to the wool situation. Messrs Hunt and Wilson, who had been appointed to inquire on behalf of New Zealand, had made a report which was being forwarded by mail, its chief points were as follows; The Imperial Government’s stocks of Australian wool on June 30 amounted to 2,0-49,177 bales, and of New Zealand wool to 850,377 bales, roughly 18 months’ production. This was about 1,650,000 bales in excess of the normal stocks. Soutli American and South African stocks brought the excess up to roughly 2,000,000 bales. Since the armistice the world's consumption of wool has not equalled the production, so that surplus stocks arc not being reduced. High prices have forced economy on the civil population, while the purchasing power of Europe is enormously reduced. The current Australian clip is expected to bo reduced by 400,000 bales through the drought, but the most that can be hoped for In the immediate future is that the consumption will over- | take production. The surplus i 2.000,000 bales must therefore be held for a considerable time, ari l can only go into consumption gradually. The problem Is to ensure its being held in such a way as to minimise as far as possible Us detrimental effect on the market. The problem is made more difficult for New Zealand by the fact that only il per cent of its stocks arc fine wools, for which there is most demand. The committee believes that the

prices of crossbred wools must sooner | nr later return to normal. Wool is .m j imperishable commodity, and should he one of the safest tilings to hold. An | Australian Committee is endeavouring | to assist the position by spreading the wools of the current Australian clip over a period of 12 months by limiting the amounts offered at the auctions. The New Zealand committee considers that similar control in the case of New Zealand wool can only be carried out by the Government, which it does not recommend, firstly because while Australia Is dominant in fine wool, New Zealand is not dominant in crossbred, and if the Dominion withholds its clip the result would bo to give the market

to other crossbred producing countries. Secondly, the crossbred clip is already spread over 12 months, as approximately half the total is produced in each hemispnere. The committee considers that any attempt at interference would result in more harm than good. The committee added that as all the wool m stock cannot go into consumption in I he,, immediate future, at any price somebody must hold a portion. New Zealand should ask the Imperial Government to undertake not to force its stocks on the market, but to boll firmly and sell only in such quantities as can be absorbed without seriously depressing the market. This would steady the position and restore confidence through the whole industry. The committee suggests that growers able to do so should hold crossbred wool, j Someone must hold the wool, and it is better for flnancially-strong growers to do so than for speculators to step in. The committee considers that the position should be made known to New Zealand growers, and it urges farmers to hold their wool as long as possible. New Zealand growers could also assist the market with profit to themselves by increasing their ewe flocks wherever the country is suitable, so providing for an increase of meat, lamo, for Which the outlook is very good. There is no difllculty about tonnage for moving wool, but there are advantages about holding the wool in the Dominion. The accommodation m , London is overtaxed, and growers should send their wool there only if they mean to meet the market and take | what they can get within a reasonable i time of its arrival.