The Press Thursday, November 20, 1924. The Wool Market.

Press, Volume LX, Issue 18235, 20 November 1924, Page 8

The Press Thursday, November 20, 1924. The Wool Market.

The remarkable prices realised at the Wellington wool sale on Monday —the first of this season's auctions—make the best news producers have received for a long time. It is undoubted that the better feeling created by the Home elections and the probability of a definite and established policy in America by the return of President Coolidge to power had something to do with the buoyancy displayed. A feeling of stability was badly wanted to encourage trade confidence. Tho fear has been expressed that prices have reached a pinnacle that presents some danger. Perhaps tho fear is quite unwarranted. Every other exportable product of the Dominion depends almost entirely on tho English outlet. There is no worldwide demand for our lanib or our dairy produce. But the whole world wants wool, and it only requires international concord and the improved economic conditions resulting therefrom to set that demand actively in motion. The recent elections, have undoubtedly stimulated the movement. Whilst tho production of wool continues to fall short of the consumption it would appear that high prices will bo permanent. The strength of the position so far as the raw material is concerned is emphasised by the fact that the depression in the textile trade in England throughout the greater part of, the year had no effect on raw wool prices. Although shelves were stocked with manufactured goods for which no market could be found, the trade had to • maintain its purchasing activity for the raw material or do without future supplies. America is the most potent factor in the wool market to-day. Its erratic tariff policy has disturbed the regularity of its competition at Dominion sales, but when America is in tho market a few pence .a, pound is neither here nor there. On the other hand, it has .to bo recognised that when the big Republic is out of the market there is no half-way house. The most satisfying feature about Monday's auction, therefore, is the keen competition from United States buyers. augurs well for tho season, particularly for South Island growers, as American trade demands the finer class wools, of which 90 per gent, of the Dominion's total are produced in Canterbury, Marlborough, and Otago. The rapid growth of population in the States and the decrease in flocks are causing much concern in that country. A fetv years ago three-fifths of the „ needs were domestically produced, - but the proportion has dropped to two-fifths, and the movement shows no cessation. It is plain that America in tho course of a few years will have to go abroad for the great bulk of its wOoL An American authority, recently reviewing the country's stocks, stated that the needs for 1924 would absorb 660 million pounds, and ho estimated the American clip at 225 million pounds. "At the ordinary rate of consump"tion," this authority goes on to say, "this supply would have entirely disappeared by April, 1925. Without "further imports tho lofts would bo "entirely bare, ' instead of having "around 400 million pounds as at the "corresponding period in 1924. Tho "wools held in storage in the United "States on October Ist, 1920, amounted "to 651 million pounds." The figures illustrate the remarkable diminution of stocks in the United States, and render unavoidable its growing dependence on foreign supplies, a dependence that is not going to be averted or diminished by extravagant protective tariffs. The position may not inconceivably arise in the near future that the poor response of AmeriI can growers to the protection afforded may create a clamour for the removal of the tariff altogether, or, at least, its substantial reduction.

Tho figures of the Wellington sale point to an average rise of about 5d a lb on the March values for fine crossbred wool, but it has to be borne in mind that Monday's offering of this class -was particularly choice wool from some of the best flocks. It was light and woll-grown and entirely free from seed, and the general heaviness that characterise the average end of season catalogue. There is a tendency to overlook this all-important aspect when prices are being compared. Medium and coarse crossbred wools did not show a proportionate rise in fine crossbred, American interests not being coaeerncd to the same extent with coarser grades, but the advance in the latter was very pronounced, and promises well for the future. ~Fiom the beginning to the end of last year's auctions the improvement in prices was about 6d a lb. Monday's values recorded another advance of from 3d to sd. There « speculation as to whether last season's experience of rising values will bo repeated. A Sydney authority recently expressed the belief that the 1924-25 season "would "be one of steadily rising prices," but such Jtdvieo is risky to act upon. There is nothing on the horizon to indicate a reverse, but the wool market is so sensitive and America is such an uncertain quantity that prudence dictat-CB u 'policy, of prompt disposal. Taking

.in average of Monday's advance, the increase should mean a difference, if the prices hold, of between four and five million pounds on the Dominion's clip this year, and in the vicinity of a million on that of Canterbury.