THE WOOL TRADE AT HOME.

Press, Volume LXI, Issue 18408, 15 June 1925, Page 12

THE WOOL TRADE AT HOME.

FALL IN VALUES. UNDER-CONSUMPTION ABROAD. (FBOUL.OUS OW2f COHEESPOXDEST.) s LONDON,,May 8. Inaction, says a prominent New Zealand mercantile firm, is tho fittest word to describe tho state of the wool trade. Tho volume of business recently passing has been restricted, not only ty tho-Easter holidays,! but also by the want, of- confidence everywhere appar-ent-on the part of users. In the belief that prices of both merinos and crossbreds'might gp lower, buyers of tops, yarns, etc., have operatcu as sparingly as possible, and this, coupled witn sundry sales on the part of weak holders,, has contfibutca to the feeling of instability so prevalent. This state of affairs has been noticeable, not only in this country, but on the Continent, and also in U.S.A. ' " Iwo or three weeks ago there was some business doing in Germany. ■ It .was hoped,, that -as soon as the Now Zealand sales were finished, there might be some recovery in the case of crdssbreds, ' but the hews lately published that half a milion bales are to bo catalogued in Australia during tho next three months, has created further pessimism. In consequence, little is being done until some basis of values is established at tho sales beginning hero on May sth. The quantities declared for sale are 117,400 bales, including 51,3(K) from' New Zealand. That there would bo a further deflation of .values at the May series of London "Wool Sales was regarded as certain; ,and the fall which took *jla,ce was no greater than many people anticipated./Barcly half of tho offerings found buyers, and as compared with the March auctions tho decline.in values ranged from 15 to 30 per cent., the fall being most pronounced in tho case of medium crossbreds. The state of the wool'market here is reflected' overseas.' Following the ■ cancellation of a salo at Adelaide, which, svsts. announced yesterday, similar action has been taken at Brisbane, and the Central News states that there may be a goneral postponement of tho wool in Australia with a view to preventing a complete collapse. Values have declined in the United States and in tho South American republics,- while the wool trade in' South Africa is described as lifeless. East •!• India wools were cheaper last week at Liverpool than at the previous auctions. Iteports from the wool textile' manufacturing centres show that business is held up pending something like a stable ; basis of values .being reached. .-. . Charles' Balme and Company say that tho declinfc on both merinoa and cr6ssbreds was generally, greater than holders were prepared ~to accept; consequently an..,unusually large proportion of the offerings was withdrawn. The fall on merinos amounted'on average to 15 per cent'., being from 10 to 15 per cent, on fine quality wools, and from 15 to 20 per cent, on stronger and inferior descriptions. Fine crossbreds wero'SS per cent. 7 ,' medium 30 per cent. anil coarse- 35/ per:cent., below last . Series-rates'. 'Prices for eliped_ and scoured crossbreds were about 25 per cent, lower. South American combing greasies, as-weir as snow whites, Tvero from 15 to 20 per cent, cheaper. 25 per cent;, medium 30 per- cent., and coarse 25 per . cent, below last series .rates. Prices for aliped arid scoured *fcrossbredß'wore about ; 2S ' per cent. lower. South African combing greasies, as well as-snow whites, were from loito 20 ;por. cent, •cheaper. ''].' Testerday, in. Lbridon,' tlicre' #a» a slightly better tone at ' the market, Germany in particular figuring as an increased buyer. , On the Bradford wool market, yesterday the decline in values in' London had a depressing'effect, and there,was a feieling that all public. wool auctions should, be ca'ncelled to enable the trade to absorb the faw materials now held. Confidence Shattered. '<' The slump in wool .values, and the consequent heavy losses sustained by' wool importers,. is • due ■ to the : fact that a largo proportion of the Australian clip Tvas bought at record prices during August and November/.'* ho writes.. "At that time the opinion prevailed that there would be a shortage of fino wool this year, arid the most important buyers in the United Kingdom,: as well as Franco,,competed keenly, for the new clip during the first half of. the selling season. ' When December was reache'd a financial stringency -occurred; and it was found impossible .to sustain; purchases: at so high alevel. A; downward movement then set in, .and became accelerated when . France practically droppod out of • the market owing 'to the financial and economic difficulties. Instead of ' tho whole of the Australian clip, . amounting to somewhere near 2,000,000 bales, being disposed of at tho end of June, there is now a balance of about 500,000 bales at the sources of supply,, and it looks as if it. will have to bo carriod., over to next season". "Thisoicoss of supply is'not due to' ovor'-production of raw material but to' urider-ebnsumption- in the • principal using countries of Europe and North; America, When values .began to fail, tho?process of stock reduction was embarked upon at all stages of the industry. This has been adhered to right down ; to tho present-time, and the latest reports from the Continental markets using Bradford tops arid yarns extensively, as well as. from the, "American and home centres are to ■• the effect that stocks of semi-manufactures have been reduced almost to bare boards. Everybody is now. anxious to replenish their 1 stocks when values are at. tho lowest point, but nobody seems able to judgo when that point will be reached. -.- , Losses Through Mis judgment of " Outlook. '"■■" '' <( Stabilisation seemed to >bo coming a month ago. Then tho Australian selling brokers announced that the, wholo of the balance ofc the. unsold clip would be put on the market before the Middle of July. This shattered. confidence in all the U3ing countries, and in Bradford during the past fortnight merino' combed wool has fallen no less than Is a'lb. '.Bbcent Australian sales werd a fiasco. Australian brokers'have now swung to the other extreme, and. suspended Riles altogether till July Ist. ... "The iiorious part of the whole situation, from the point of view of the wooltextile industry in this country that, on a low estimate, £8,000,000 to £10,000,000 will have been lost on wool bought prior to December of last year. The . money has gone into the. pockets of the Australian growers. This has crippled the purchasing power of our importers, and .the only chanco ,they have of even partially recouping, themselves is by buying the balance of the clip in Australia, and also the bulk of the. next clip at;rock bottom .prices. Everybody recognises that when the turning point is reached there will bd a sharp recovery. -It; will take two or three good years for Bradford and the West Biding td get back, even a reasonable part of the money which has been lost through misjudgment of the outlook last autumn." • - ■•*•"•