THE WOOL MARKET

Press, Volume LXXI, Issue 21409, 27 February 1935, Page 6

THE WOOL MARKET

LONDON BROKERS' SURVEY Reviewing the wool outlook on January 15. H. Dawson, Sons, and Company, Ltd., the well-known London brokers, state the over-confidence felt a year ago, when prices were about 66 per cent, higher, is non-existent to-day, and forward contracts are avoided rather than indulged in; hand-to-mouth buying continues to be the order of the day.

Germany is now once again re-1 entering the wool markets of the I world, and has undoubtedly contracted in Bradford for large quantities of wool and semi-manufactures. The effect of her competition is mainly felt in an indirect fashion through the AngloGerman Trade Agreement, and may easily be exaggerated in some quarters, since a large volume of buying power has been removed from Australia and concentrated in Bradford. The German Government's edict that certain imports shall be of English origin has brought an unprecedented demand for wools free of burr and fault, suitable for scouring. Unfortunately, although the new Australian wool is well grown, favourable feeding conditions have sent excessive vegetable and a much larger proportion of robust and faulty clips. No Major Fluctuations Conservative buying has become customary recently, and naturally lends itself to somewhat quick reactions, but no substantial major fluctuations in wool values need be anticipated. Meanwhile, the unhealthy long distance contracts placed some two years ago have been worked down and business on today's basis can be safely entered into without fear. Machinery in Yorkshire is well employed; combers and scourers are ex-, tremely busy and the output of tops is amazing. Employment in most sections shows slow but steady improvement. . Several cumulative reasons exist lor the steady hardening of values. Yorkshire alone has been a free buyer in Australia during the first half of the season, and yet has not acquired her normal baleage. Every other country, including Japan, has operated on a severely restricted scale. European and Near Eastern centres have, naturally, turned to Bradford to cover immediate requirements. Japan, however, has now started on increased production of yarns, and will be a more formidable competitor during the early months of this year. French Decline The decline in the French wool trade is startling; the figures for successive seasons showing remarkable decreases. The volume of trade in that country is approaching its lowest possible point, unless it is to disappear altogether, and the next move must be toward an accelerated turnover with increasing competitive power; it is little wonder that Roubaix firms have tended to concentrate more on the Yorkshire market, and often operations reported as on French account are merely the covering of orders received through Yorkshire agents. The healthy feature of the trade is the tendency in all sections to avoid commitments and a most determined refusal to place orders until delivery is actually required. This, coupled with reasonable wool prices, is providing a strong foundation on which to build an improved turnover at a profit, although margins may continue, to be narrow.