WOOL PRICES

Dominion, Volume 12, Issue 223, 14 June 1919, Page 12

WOOL PRICES

THE POSITION IN BRITAIN

NEW ZEALAND'S BARGAIN . '

During' March the Imperial Board of Trndo announced a schedule of prices to cover issues of New Zealand nnd Australian wool until/ November 30 next. The schedule prices nrn based on the rates at which the Imperial Government has bought, the Australasian wool for this tiwso'.i mlt i next season. Tho comments of trade publications in the United Kingdom indicate that the manufacturers consider New Zealand nnd Australia have made a good bargain. , "There is something in the nature of a glut in wool, if we put out of mind the world's needs (which are stupendous) and consider only' : tho world's present, possibilities of using machinery and 'labour in 'producing goods, its capability of paying, for goods, and its willingness to. pay present nrices," writes the Bradford correspondent of the liecord." "Tho blockade of Germany and the destruction wrought by the Germans upon-Belgian. and- , -. French ■machinery leave:.the use of wool on any large. 6Cak entirely in, the hands of Greai; Britain. ■; the- United State/, and Japan. •These' three' nations, therefore, are praciically the o.ijly.'serious competition* for wool other than the Australasian supply, which hns-been-secured for the British Griv'ernmenf. until the middle 'of next veay. : Circumstance's; have thrown the large South .American .-supplies'- and tlis ;.ai[-| .'o;ut saijddns inpouj.y-;,q)hos- M.nmns bands of our competitors. ; ■ >'■■■'■ ' '; '-'The, South African, and South American wool will be free to' fall in value further, while the British Government issues are- standing stabilised for , , eighi months to come. Our competitors will be working on a free and natural'basis while" we are artificially stabilised.'.' Th? correspondent suggests that the British manufacturers., .are being prejudiced by 'having to pay more for controlled Nevv Zealand''and'Australian wool tlian : the , /' would hayo to pay'in a free.market. En hints that' the Imperial Government may make o Joss on the transaction'. l ■ . "If the Government can stabilise wool prices, which h not altogether certain, it cannot stabilise prices for goods'," adds the correspondent. "The public will demand cheaper goods. Tho goods canno* i:o made more cheaply at present,' and nothing .but dire destitution can be eijiected to onpriit'e as a means of brin"in" down the labour costs. Both nt'-lloino' and. abroad falso expectations will ba raised, with the consequence that orders poor enough as they are, -n-ill be likelv to be further impeded. Even if the effect of foreign competition can bo staved off hv some, means for eight' months lo'-romn what may happen to stocks of British goods in hand at the expiration cf that period .will be .entirely- on the knees'of the Rods.. There may be a sudden drop in.value? both of wool and goods, which Trill.be. all the more dangerously ' Inrge becaiiso tho natural movement has been iheld'in suanpnse." '

", ; A; report issued by. the National Association oi Wool Manufacturers of America .has'some bearing on the values of A'ew Zealand wool. ''The sudden termination of tho war and, tho subsequent disorganisation -of -business," says, the report, have left manufacturers with stocks of wool on hand mieuited to their ordinary business, many of their machines, (altered, to suit'. Government business) -unfit-for the manufacture of their usual; products, and their employees nccustomed'to high-wagP3 and in'a state of unrest. In addition, the American public generally is "looking for lower prices, .which .can only be obtained by reducing raw .material'prices and manufacturing costs, of which wages form *h* most important element.-" '

The association foreshadows a lii? increase iu America's procluitionVof: , . wool. There has been organised'propaganda m ■ the' Hinted Stales in-'.favour of "more sliopp ami moro wool," and thn err has produced results, especially in the Middland Western States. "Tt is a shame,"' says thn report, "that during the recent . war this country ha? boon to a larija ' extent .dependent on-foreign nations for an adequate supply of-ttooL ~.-If England . had .been our foe, our condition \i-onlri have been pitiable indeed. . : , . With thn lessened', demand arising from the reduction of Government requirements, the stocks in Government lmnds, the quantity held b.r dealers and mnuufac;tureis, and the clip of 1019, enough wool of all sorts and kinds is in fiiyht to supply the American mills for the coming with' nothing over." 'lhfl. association predicts that tho United Ktatee will have n sheep industry c-anablc of supplvinEfall tho wool required in the United States. ■ Under present conditions the American niilla taks mnolt of the South American wool, .which otherwise would be diverted-' to Europe to compete there with New Zealand and Australian, wool. ' '