THE WOOL TRADE.

Waikato Times, Volume 109, Issue 18342, 30 May 1931, Page 22 (Supplement)

THE WOOL TRADE.

IMPORTANCE: OF LONDON SALES. A BRADFORD DEFENCE. A writer in the Yorkshire Post of May 10 makes some . enlightening ooniments on the Bradford wool trade and the importance of London series of wool sales, which he contends are an invaluable factor in maintaining the stability and buoyancy of .the wool markets. Some interesting points are raised which merit pondering. The' artiole is as follows:--There is a marked contrast between the position of merino wool to- day, on the eve ol’ the opening of the second series of. London, sales, and that it oocupied on January -19, prior to the commencement of the first series of this year. What has occurred should causo Australian wool-growers to appreciate more accurately the value and importance of the London wool sales. Those who are Interested solely in the sale of wool in the'Commonwealth, not content with having greatly developed the sale of raw material at the source of production, have for some time past urged that arrangements for the salo of wool in London should be subordinated to those made in Australia, particularly in Sydney, it has been claimed that the clashing of dates, or the •holding of sales in London immediatelybefore a series in the Commonwealth, almost invariably result in a depression of prices due to a weak market in London. It was been suggested even that the London sales should not ■commence until the bulk of the wool has been offered at the Australian sales by auction, and the people who make this suggestion urge also that no wool should be exported from Australia without having first passed through the. auction sales in the Commonwealth. Despite the important growth of wool sales in the Commonwealth, the London wool sales still serve a very useful purpose for those who do not ca-e to carry the long risk attached to the direct importation of raw material. They give also an alter-, native market to wool-growers, which is very necessary, having regard to the manner in which the value of wool fluctuates, for It gives them a freedom of action In selecting the time of selling their raw material which 'they would not possess if direct shipments to London were not permissible. During this last slump of wool values, which has extended over a period of nearly three years, it has been easy for those who desire to see the whole of the Australian clip brought, hnder the hammer in .the Commonwealth, to make out a plausible case in favour of selling either In .Sydney, Melbourne, or at one or other of the colonial sales. The circumstances which have caused the wool trade and the wool textile industry generally to have the unfortunate experience of the last two years and 10 months, have, however, been entirely apart from the sale of wool in either Australia or London. If the wool had been held in the Commonwealth It would have depreciated just the same, until the time came for & turn In the tide. Unwarranted Apprehension*. / Australian wool-growers should not fail to note that the check .to the. downward movement of wool values was given at the London sales and not In Australia —even, indeed, at. the very series of Londen sales which some of those who have persistently depreciated their value predicted was likely to see the bottom almost drop out of the market, and selling brokers In this country permitting raw material to flow into the hands of ultimate consumers, or speuclators, at ruinous prices for the growers. The Inference. was that London selling brokers were not, likely to be much concerned about the interests of wool-growers. What actually happened at the last London wool sales should discount future

criticism of .this character in the minds of wool-growers in Australia. It was obvious that conditions at the wool textile centres the world over at the close of last year and the commencement of this, were deplorable, and the outlook not at all rosy. Both buyers and sellers, therefore, anti-, •clpaled a very trying period during the January-February London wool sales, which commenced on the 20th of the .first month of the year. Wool of all; qualities was, admittedly, cheap. Many consumers were,, however, content, still lot' carry orders uncovered, and in a general sense there was an abstention of buying which drove prioes down to a point which was well below what was justified even by the then limited consumptive demand. The result was that during the first week of last London sales, wool was sold at prices which actually, not relatively, were the lowest within the recollection of the oldest of those engaged in the wool trade or the wool textile industry.