HERE OR LONDON?

Waikato Times, Volume 110, Issue 18518, 24 December 1931, Page 12

HERE OR LONDON?

MARKETING OF WOOL. EXCHANGE AND COSTS. WOOLBROKERS’ ADVICE. ■ Some reasons in favour of growers selling their wool in New Zealand rather than sending it to (he London market werfi given by the president of the New Zealand Wool Brokers’ Association in an interview with the Dominion. lie referred to a statement published last week, and said that members of the New Zealand Wool Brokers’ Association throughout tho Dominion had drawn his attention to a circular issued to clients of the Bank of New Zealand, which stated, inter alia: “There seems every indication that, the London market will prove the better market to sell in. It is doubtful whether growers selling locally derive the full benefit from the prevailing exchange rates. . . London, after all, is the true ceplntf market to which wool manufacturers look for their supplies, ami why should the growers not obtain the full benefit there Instead of selling the clip in New Zealand, to be resold in London, by speculators, as is so often done-”.

‘‘This reads very much like the propaganda we have had previously from the other end of the world, but was hardly to be expected from a New Zealand institution,” said the president. "Apart from the injury threatened to an important Dominion industry, employing a large number of men and considerable clerical staffs, also a huge investment of capital, there is rank nonsense in the implication that the wool is bought here by speculators for resale -in London, when almost the whole goes direct to the consumers in all parts of the wool world. The statement about exchange also is not correct. Every buyer has to make allowance for every fraction of the exchange in fixing his price, and the grower, therefore, gets the exchange in the first price for the wool." A few facts stood our prominently, he continued, which would enable ’consumers to pay better prices in buying wool near the point of production. These were:

1. Freight from New Zealand to Canada and United States is the same as from New Zealand to London.

2. Charges from London to Canada and United States are nearly the same as New Zealand to London, and, if buyers are compelled to get their requirements iii London, this either ,adds to their costs or has to come off the price paid in London. 3. Freight to the Continent is the same as to London; 4. Charges from London to Bradford and tjie. Continent are nearly $d per lb. Consumers have this much up their sleeves when buying here.

5. Buyers allow for the full exchange, and are costing their wools to Bradford or the Continent at approximately lid per lb., showing a, distinct saving on intermediate charges- - 0. Japan buys all grades here, from EC's to 60’s, and buys next to nothing Iu London.

7. Australia does the same for suitable halfbreds and crossbreds. 8. There is a specialty demand here for halfbreds and super-crossbreds by manufacturers, and orders are placed in (he Dominion arid not In London as experience has taught the buyers that they must secure them at the source of supply or go without.

9. The Dominion mills are considerable buyers of all grades of wools. 10. Commission, warehouse charges and storage are all considerably lower in New Zealand than In London.

“The experience of many years of speculators and shippers has been a sad one,” he continued. “The present propaganda by Some of the banks in telling their clients to ship is turning the grower into a speculator, and that at a time when no one can say what is going to happen to Germany and the financial world. There is much truth, further, in the statement in the press that the efforts of some of the hanks to have the labour on the woolsale work diverted to London will, if successful, deprive many workers in the Dominion of their livelihood, and to that extent increase the' unemployment burden, now already too heavy. “To sum up," he concluded, “the buyers for all consuming centres in the world arc here with orders to buy and ship their purchases dire'et to their principals. All the saving in distribution and selling costs goes direct to the grower. Prices may change from time to time- Wool may revert from market to market to a world parity, but tlie saving Is there for the producer all the time. If lie considers that either December, January, February, March or April is going to bo the better month to market in, he can take the sale of his choice by holding in Ihe Dominion and got Ih'e world's parity."