THE WOOL MARKET

Dominion, Volume 13, Issue 143, 12 March 1920, Page 8

THE WOOL MARKET

WHAT OF THE NEXT CLIP ?

OFFICIAL CABLES ON SUBJECT

By Telegraph—Special Correspondent. Palmorston North, March 11.

At a meeting of shareholders of tho Farmers' Distributing Company, hcld_ at Palmerstori North this afternoon, important cable . messages, touching tho Home market for New Zealand wool, were read. These cables nte quoted below.

At the suggestion of the company, tho Prime Minister dispatched the following cablegram to the Director of Raw Materials in England :—"The Dominion woolgrowers, banking and financial institutions, and woolbrokers are grcat.y concerned regarding the position on return lo free market conditions for wool. Whilo it is hoped that your published forecast that all wool purchased on behalf of the Imperial Government will be shipped lieneo by December 31 next will be realised, . . . . it is recognised Hint tliis

does not eliminate all dangers as regards the coming clip of 1(120-21. It is feared that unless arrangements can be made whereby tho large accumulation of wool on account of the Imperial Government is prevented from coming into! undue <v>mpetition with the coming clip, grave complications will arise, resulting in a serious fall in values, and consequent financial embarrassment to woolgrowers and the New Zealand Government. I trust that von will formulate some scheme providing for protection of all concerned lh the wool industry on this side, which I enn submit for confirmation here." On February 17 the Director of Raw Materials replied: 'Tour cablegram has had our careful attention. Owing to great dela/rs in turning round steamers and owing to the Shipping Controller having diverted 6pace from wool to wheat, it will be difficult for me to maintain' shipments on a sufficiently large scale to lift all tho Government wool this year. However, I will make every effort to do so, and in any case to l reduce the carryover to the smallest possible quantity. "We. agree that the position of the "rowers of new wool depends principally not on whether the Government surplus is stored in New Zealand, but on the total quantity left unsold,' and the arrangements made for the disposal of it. Yon need not. have any fear regarding wool from 4S's fupwards, which will be readily sold at a good profit almost, an readily as thev come to hand. There is a fairly good demand for 40's, at prices showing very little margin over appraisement valn». We think that our surplus at the end of the year will probn'bly, be very little, and need not cause serious concern. Wools below 4G's are selling slowly and poorly, in spite of being relatively much cheaper than the finer wool. "I do not think that reducing our selling limits below the equivalent of the appraisement prices would substantially increase our sales. Unless the demand materially imoroves there will b£ a considerable surplus of crossbreds. both New Zealand and Australian, carried over at tho end of the year, at which time we expect our -surplus stocks to consist almost entirely of these low grades. "Unless you havo some suggestions to >nalro. wo see nothing to bo done but > to continue on the present lines, snnplyins the market freelv with every grade of wool, but not attempting to force wool into speculative hands by cutting the prices of unpopular grades severely. I =hall be clad, six months hence, when the situation lias developed further, to agree with you on any possible nlan for combined action. Yon need ont. fear our attempting to force sales I>y cutting prices wit lion t consal ta ti on with von