THE WOOL MARKET

Dominion, Volume 13, Issue 304, 17 September 1920, Page 7

THE WOOL MARKET

MR. MASSEY EXPLAINS THE SITUATION

ENORMOUS ACCUMULATED STOCKS

IMMEDIATE PROSPECTS

NOT BRIGHT PREMIER BELIEVES POSITION WILL , IMPROVE Thte Prime Minister niado a length; statement in the Homo of Representatives yesterday regarding tho wool market and tho outlook for the sale of tho new season's clip. Ha had promised to give Parliament as much information as was at his disposal on these points. Mr. Masscy admitted that thie immediate prospects were not bright, but he thought that tho position would improve later, and that it would bo a mistake for New Zealand woolgrowers to sacrifice wool at low prices for the sake of quick returns. "The appraisement of wool on behialf of the Imperial Government ceases at September SO. 1920, and woolgrowers will have a free and open market for next season's clip," said Mr. Masscy. "In considering the conditions to 'be faced_ on the* return to normal 6ale conditions during next season it is necessary to have a clear understanding of -the stocks of wool held by tho Imperial Government. Cabled advices received this week from ttie Imperial authorities show the following detailed stocks of colonial wool held by the Imperial Government at June-30, 1920:- . NEW ZEALAND. Bales. In United Kingdom 283,528 In Antwerp ..i'Si In Dominion ««■-« Afloat for .United Kingdom 6U85 856,257 fiepresented by— „■ „, Greasv crosabred combine mJ-OM Orcaay merino •■-•••. * '•»' Greasy crossbred clothine 23.494 Slipe ■ • ICTJW Scoured •...:. lb '- m 856,297'

This very large accumulation of unsold colonial wool haa been largely brought about by the fact that Continental countries, who were usually large buyers, have been practically out of the market owing to their inability to finance purchases, while America had become overstocked with woollen goods, and had temporarily ceased manufacturing to a considerable extent. The public demand in Great Britain and countries drawing their manufactured supplies from Great Britain, as well as in other countries, has been in the direction of goods made from finer wools, with, the result that crossbred wools have accumulated to a much greater relative extent and the current market for this class of wool is a poor one where it exists at all. The position in this respect has been accentuated by Argentine wool being unloaded at exceedingly low prices, ' One Good Feature, "Though details of tile class of business done are not yet available, advices indicate increased activity amongst British and American wool manufacturers, while Canadian mills appear to have secured a considerable contract for the supply of manufactured goods to Enmania, though at what price is not known. One good feature of the posi-

tion lies in the fact that there appears every prospect of sufficient shipping spaco being available to lift wool as required. "In this connection I recently communicated with tile chairman of the New Zealand Overseas Shipowners' Conimitteo to ascertain what arrangements would be available for shipment of freo wool having regard to the stocks of Gov-ernment-owned wool held in the Dominifcrn, and ho has advised me that it is expected that ample spaco for privato wool shipments .will bo available, and it is not considered that tho Director of Raw Materials will stand in tho way of shipments of private wool. Kates of freight have been fixe p d at l|d. per lb. for greasy, l}d. per lb/for slipe, and 2{d. per lb. for. scoured wool, but I am in further cable communication with tho Imperial Government on this question.

"At the invitation of • tho Imperial Government I have asked the High Commissioner, at the request of New Zealand wool-growers, to nominate two representatives of New Zealand to confer with the Ministry of Munitions in regard to the disposal of unsold stocks of Government wool in London. The High Commissioner has not yet advised as to the names of those selected. I have-al-so impressed on tho Imperial Government tho advisableness of disposing of crossbred wool to Continental manufacturers on as easy terms as possible and havo offered to do anything tho New Zealand Government eon do to . assist towards that end.

"So far as the wool in tho Dominion owne:l by the Imperial Government is concerned there does not appear to , be any desire' to expedite its shipment, and I have had to make representations to the Imperial Government to ship more of its wool in the- fcar'tiiat shipowners, being nnablo to fill cargo spaco during September, October and November, will divert some of their' vessels from thft New-Zealand trade, thus delaying shipments of tho remaining stocks of _ Government meat which from every .point of view need to be shipped and put into consumption as early as possible.' Market Outlook Fcr New Clip. "As regards the n«w clip and the market outlook for it, the next two months may bring about changes for the better. At the moment the position as regards merino and halfbred wool is that a good market, better than that under the Imperial purchase, seems to be assured. The immediate position regarding crossbred wool is not good, but having regard to what must be tho urgent requirements of tho Continent of Europe for wool (and naturnlly, in new of the financial position, .the _ Continent would purchase the wool available at the cheaper rate) I am hopeful that the Imperial Government will be able to make such financial arrangements with the Governments of continental countries ns will enablo a large quantity of the accumulated stocks of coarser wool to be absorbed by these countries and thus improve the market outlook for our next season's clip. Another factor which must not be overlooked is that the Home wool clip has been on the market during the last few months, and some probably is yet unsold. This doubtless has hampered the sale of colonial wool.

"Whatever improvements in position may take place between now and tho end of the year, present appearances indicate that expect the market for crossbred wool during at least tho early part of next season to be as good as was the case under the Government purchase scheme.. I am hopeful of a gradual improvement taking place, though with the heavy accumulation of unsold stocks of this class of wool held by the ImperM Government, it is quito to now forecast when the 'hoped for improvement may be expected. "It is satisfactory to note that wool auction sales are to be held in the Dominion with their usual regularity during the coming season, beginning in November, and by the time these sales commence the position for crossbred may become a good deal clarified, but I hav'o no hesitation in stating that nothing can do _ more harm to'the wool-growers of this country than for them,to sacrifice wool at low prices for the sake of quiiok realisation. Such a course would only be playing into the hands of speculators and would weaken the position of all. Bringing in Outside Buyers. "I have cabled asking that the New Zealand nominees whb are consulting with the British Ministry of Munitions advise, after examination of the position m the Tlnited Kingdom, regarding the quantities of wool that can be safelv offered monthly at the New Zealand sales. I have also asked tlint the Imperial Government give the New Zealand nominees and the High Commissioner full facilities for always keeping fully informed of all aspects of the wool position, in order that the High Commissioner may keep me advised by weekly cables, these cables to be distinct from ordinary market cables. It is the intention of tlm Government to assist in endeavouring to bring in' outside buyers from America, and Japan and other countries by whatever means is considered advisable.

"As I have already, stated, the next two mouths may bring about an improvement, and -I am quite satisfied that in any case it is only a matter of time before the world's wool position will readjust itself, especially if the unfortunate industrial unrest at present existing in Great Britain and elsewhere is brought to a satisfactory end.

"The latest official information regarding the market conditions to-day is contained in a cable just tolhond from the Director of Raw Materials, London, who advises as follows:—'418 seventh series London sales closed.on September 3 with good tone for merino and 'IS's to SS's, but demand continues unsatisfactory for dS's' downwards. Slipes and scoureds of medium and low qualities have proved difficult of sale. We estimate current "lean scoured wool prices as under, for topuiaking grades :-64's, 80d.; fid's, 70d.; 58's, Gfltl.; 56's, 52d.; dS's, iOd.t 4G's, 28d.; 4-I's, 25d.; W's, 22d.; Sfi's, 2ld. Quotations 'for 44's downwards are nominal.' "An analysis of thle figures given in'this cable works out as follows (quotations given refer to A and B grade, good averago combing wools):—

Average price London P. 0.8. ii'id'cr Clean Average greasy Estd. N.Z. Govt, scoured. . yield, value. charses. value. nurclinpe. 60'b-£4's merino 70d.-80d. 48 3J»d.-?md. M.-51d. 2f11r1..53d. 21(1. 25d. M'g-58'b halfbrcd ... 52uV60d. 58-60 3Hd.-342d. sd. ?«Sd.-29'3d. 18}d.-21d. 4B's fine crossbred M. 72 283 d. m. 23M. 16d.-17?.d. •44's-46's mcd. xbred 25d.-28d. 74 ' 18Jd.-202d. • 44(1. 14d.J«?,d. 16{d.-17d. (nominal) 36'8-40's coarse xbred 21c1.-22d. ' 76 16d.-16?d. 4!d. »Jd.-153d. (nominal)

Disposals. of Australasian Wool. "Since the foregoing tables were prepared a letter has been received from the Director-General of Raw Materials, under date July 17, 1920, covering an analysis of the disposals of 'Australian and New Zealand wool since November, 1918. The Director-General of Raw Materials points out that the average monthly disposals are just tinder 200,000 bales. Taking- the Australian and New Zealand yearly clip at. 2,450,000 bales, it will be Been that in the period of nineteen months the disposals have been slightly under the wool grown during the same period. As the.stocks of baled wool in private bands are undoubtedly greater than they were during the armistice period, it seems-to bo evident Hint taken as a

whole- Australasian wool has been growing rather more rapidly than it has been consumed.

"Sir Arthur Goldfinch proceeds to say that he is taking out more detailed figures, which will almost certainly show thai merinos and fine crossbred*, freo from fault, have been consumed mere rapidly .than they have been grown, and the accumulation, therefore, is entirely in the faulty and coarser wools, In connection with, wool sales to be held in New Zealand, I am advised that the information at present available* indicates that all British and American firms, which have previously sent buyers here, ■will bo represented at those sales, and that tlioi'P.is even a possibility Hint, other buyers may come along also."

AUSTRALIA. • , In United ■.Kingdom 4&3.311 In Antwero ••••■ *l-™» In Boston ...■■■■■ •■••••»•■•• ™90 Afloat for United Kingdom 309.658 Afloat for Antwerp \~.£'Wl In Australia : • >•• 1.161.828 2,049.177 Beoresented' byGreasy merU'o combing 435.067 Scoured merino combine Gre&sv crossbred' combiner 192.C68 Scoured crossbred combine 33-114 , Greasy merino 'clothing 12.927 Scoured merino clothing 62.645 Greasy crosshred clothing 2.239 Scoured crossbred clotliine 18.711 GreaBy merino carbonising 33.230 Scoured merino carbonlsinsr 17,000.' Greasy crosBbred carbonislne ... 17.347 Scoured carbonising 19,321 I ' 857,357 In Australia Merino combine ..., .'... 317,024 Crossbred .tombing a.. 436.400 Merino clothing 110.977 Crortbrod slothing : 64 ; 985 Merino carbonising > * 7o,667 Crossbred carbonising 155,967 1,161,820 TOTAL STOCKS New AusZealand. 'tralia. Total. Bales. Bales. Bales. In United Kingdom 283,328 483.311 766.639 In Antwero '.. 1,057. 51.268 52.325 In Boston - 17,890 17,890 Afloat for United Kingdom ■ 61,385 309,658 371,043 Afloat for Antwerp — 25,230 25.530 In Dominion 510,527 1,161.820 1,672,347 . 856,297 2,049,177.2,905,474 Represented byBales. Bales. Greasy merino combiner 757.122 Greasy meriuo clothing 123.904 Greasy merino carbonisine 108.897 Scoured merino 140.333 1,130,256 Greasy crossb'd combine 1.159.521 Greasy crossb'd clothing 95,718 Greasy crossb'd carb'ising 173,314 Scoured crossbred 211.478 1.640,031 Slipe 135,187 . * 2,905,474