THE WOOL MARKET

Dominion, Volume 14, Issue 44, 16 November 1920, Page 8

THE WOOL MARKET

NEWS OF THE LONDON SALES COARSE WOOL NOT WANTED DIRECTOR SUGGESTS REDUCED PRICES, The Department of Imperial Government Supplies has received the following cablegram from the Director-General of Raw Materials, London, dated November 11, 1920:"Sales commenced yesterday with weak 'tone. Prices for merino aro 15 per cent, and crossbred 20 per cent, to 25 per cent, lower than at plose of October series, (lean scoured prices now current are about as follow for topmaking descrip-tions-.—'Fine, 58's, 3s. 9d.; sG's, 2s. Ud.j 50's, 2s.'3d. Medium. 4S's, Is. lid.; 46's, Is. Bd.; 44's, Is. 6d. Coarse, 40's. Is. 3d.; 36's, Is. 2d. "Forty-eights upwards sell cfi about this basis. Spinners' woolb of these grades aro in fair demand nt 5 por cent, to 10 per cent, higher prices; 44's-46's are difficult of sale at about prices quoted, and to sell them freely prices would have lo lie reduced to about Is. 6d. and Is. 3d. respectively; 40's and 36's are not wanted, and it is probable to .effect salos prices would have to ho reduced fo Is. and lid. respectively. The market for coarse wool is depressed by How offer from Argentine, ralhor burry 40's>-4-t's being offered and purchased c.l.f. Liverpool nt 10-Jd. per pound clean scoured. "Wo estimate range of values at which greasy wool could be sold freely as follows:— * Per pound, s. d. s. d. Merino 1 S to 2 9 56's-58's Superior 2 1 to 2 0 56's-58's Ordinary 1 B to 2 0 50's Superior I 10 to 2 4 Sfl's Ordinary 1 3 to 1 9 ■IS's Superior 1 4 to 1 5 4S"s Ordinary 1 1 to 1 3 46's Superior 1 31 io 1 i 4S's Ordinary 1 0-J to 1 3 44's Superior 1 1-1 to 1 2 4t's Ordinary fl U to 1 1 40's Superior''. 0 Hi to I 0 40's Ordinary jj 9 to 0 11 36's Superior »'J' ° 2 ]'? 36's Ordinary 0 81 to 0 10| THE PRODUCE COMMITTEE . AN'IMPORTANT'REPORT SERIOUS TROUBLE MAY BE AVOIDED. An important Toport has been handed to the Prime Minister by the Produce Committee set up by tho Farmers Conference in Mpv last. This committee met on November 3 to consider the wool situation. It endorses the recommendation made by tho * High Commissioner that wool should be withheld from sale until the market 'becomes stronger. Tho report is aa follows:— "I have the honour to report that the Produce. Committee set up at the conference called bv- the Board of Agriculture on May 27 last held a further meeting on the. 3rd Instant, the principal business being consideration - Of the present-day wool position, particularly from tbe tioint of view of the forthcoming sales and the desirableness of preventing undue depreciation of selling values (nnacquent upon sheep-farmers taking up the attitude of disposing of their wool nt once at whatever price was obtainable. Full con-sidernt-'on wa= given to the valimble information contained in Hie Hich Commlsnion"A rnbleirnirVi of October 13 (already published), in which the who»<> of the fnots TPgnrd'mr the wool position were r'earlv sot out. Three paragraphs in this, cablegram may. however, be here quoted:--The. surplus of 2.000,060 bale? above normal must, therefore, bo held for a considerable time, and can only go into consumption gradually. Tho problem is to ensure it? beincr held in such a way as- to minimise as far as possible its detrimental effect on tho market. The problem is made moTe difficult from Ne« Zealand standpoint by_ fashion and demand being strongly in favour of fine wools. 55 per cent, of Now Zealand stocks aro of the class now'selling badly as compared with 6 ner cent, of Australian. 34. per cent, of New Zealand are fair selling lines against 15 per cent, of Australian, and 11 per cent, are best sjlling lines as compared with 79 per cent.' (The nbove applies to stock? held bv the Imperial Government on June 30.) Low crossbred wools are comparatively cheaper to-day than the majority of other raw products, and sooner or later must return to normal. It should bo one of. tho safest things to bold. The committee think It is clear from the nbovo thnt crossbred wool hns a future, and that if tho«e growers financially able to do so hold their clip until consumption nnd change in fashion make more impression on stocks this will assist whole position. Someone must hold wool, and it is better for financially strong grower? to do so than for speculators to ftep in. The committee consider New Zealand Government should mako whole position known to growers, and thev ura'e those who can do so to hold back their wools as long as possible. The committee Is unanimously of opinion that' the advice given" in this cablegram is sound, and that it would lie to the advantage of New Zealand woolgrowers to act upon it. "While it is fully realised that tho large accumulation of wool at present on hand must necessarily hamper the advantageous soiling of wool for some time to come, yet, if care and judgment bo exercised there is good reason to hope that New Zealand will in the end got through the next year or two without any serious trouble arism?, provided all concerned, act upon these lines. "Figures were produced showing the price obtained for A and B grade good average combing qualities of the main classes of New Zealand wool at the eighth series of London sales which vclosed early in October. These figures were as follow:—

60'6-64's Merino sC's-58's Halfbrcd ■18's-50's Fine Crossbred 44'8-46's Medium Crossbred 3G's4o's Coarse Crossbred "These prices at first sight look extremely hopeful, but there is one very important point to be borne in mind, -viz., that at these sales tho Government being the only holder of Australasian wools was in the position of feeding the market to s-uit its own arrangements, and of refusing to sell except nt such prices as it considered satisfactory. Tltis position will bo reversed at tho forthcoming New Zealand Rales, when a number of woolgrowers will have their clips on the market, and the buyers having a full knowledge of tho heavy stocks held by the Iniporial Government will ho in the position of buying or refraining from buying as it suits them; hence it should not bo anticipated that thew values will bo maintained. Conditions may consequently arise under which woolgiwcrs may be inclined to part with their wool at whatovcr is offered for it, even though it be unreasonably low, and if this fooling became general it might not only hnve tho effect of seriously depreciating Iho market for everyone, but al6o of reacting upon selling values in London, which in turn would again react upon New Zealand. "A cnblcgTa.ni, which has juot oomo to hand, very clearly indicates tho danger of weak holding, and it is a matter for regret that the priocs set out above as having been obtained at. tho October eales have evidently not been maitained.

The cabled information, which is dated sfh inst., is that thei-e is a continued weak market nnd that low offers by Argentine and Australian sellers make it impossible to expect low and medium grades of wool to sell «t November auctions at the prices given in the October sales detailed above. The Imperial Government authorities are doing their best to mako the reductions in" soiling prices as small as possible, but it is evident that great care and circumspection must be exercised in. New Zealand, as well as in England, in order to prevent speculative buyers taking advantage of the necessities of weak ho-dors. "It should be noted that information has been received ihat tho entire stocks of different descriptions of wool held by the Imperial Government in England and Australasia on September 30 were:— 765,356 bales of New Zealand wool, 1,870,622 bales of Australian wool; total, 2,635,988 bales. . "Some time since, at the suggestion of the High Commisioner and the Now. Zealand members of the London Wool Committee, a cablegram was dispatched to the Imperial Government to the effect that, while recognising that the Imperial Government had shown no desire to force its holding of wool on the market, the Government of New Zealand would l>e pleased to receive an assuranco that the Imperial Government would continue to hold stocks firmly, and only place them on the market in such quantities as would enable them to lie absorbed without depressing prices. "The line of action already adopted by the Imperial Government and Win further request from New Zealand that its stocks be held firmly, etc., implies an obligation on the part of the New Zealand woolgrower to act on similar lines, and thero is no doubt that the best results can be attained by the adoption of similnr methods 'by Great Britain and by New Zealand woolgrowers. ""The committee is of opinion that the above-mentioned cablegram may be now supplemented by a further one asking the Imperial Government whether it will consider the question of withholding New Zealand wool altogether from London sales for a time, thus strengthening tho position of sellers of wool iu New Zealand'for this'season's clip. "It stems evident thnt inferior qualities of ttn coarser wools, including needy, stained, and otherwise damaged wool, will be likelv to be out of demand altogether and "that no purchases of such wool mav be expected unless of a purely speculative nature and at an exceedingly low price, hence owners cf these tvpffl of wool would be well advised to keep them off the market altogether until conditions all round .show a marked change. Thiis, of course does uot retcr to good pieces, bellies, locks, and other classes of good scouring wool, which should realise their full relative values to fleece wool on whatever may become established as the market basis. It has been ascertained that, there is .ample storago accommodation available in tula Dominion for all requirements. . ( "In addition to carefully considering the -roncrnl position, thei committee went very" fully into the question of how J woolgrowers who decide to withhold their wool from sale can he financed. It was ascertained that banto and stock and station agents will be prepared to finance their respective clients on such lines as existent circumstances render safe and reasonable, while with Tegnrd to returned solders settled on land by tho Government the matter is one between them and the Government, which is financing them. The larger woolgrowers will doubtless be able to carry through without special assistance, and the fame applies probably to a large number of tlio .smaller ones, especially those with whom the wool clip forms only a portion of their means of income. "The outlook for meat is good, especially for. lamb, and as the returns will soon begin to come in a proportionate financial relief will follow.

"Having regard to all the circumstances, therefore, the committee does not feel that the time is opportune for making any special recommendation, to the Government as to definite lines upon which it can lend its support in the matter of finance, but is of opinion that with tho existing machinery of the banks and stock and station agents the position can be 1 met, meanwhile at any rate, with a knowledge existing that the Government is prepared to afford such support as circumstances may render necessary. Suggestions have been made thht a definite scale of value should 1» determined upon as a basis for advances to groweirs, but it was realised that with the existing uncertainty and absolute lack of knowledge as to what will be current values for the different classes of wool in New Zealand wtel sales of the new season's clip commence, it would be highly undesirable to attempt to fix any siim'nt the present time, seeing that actual experience might prove the basis so fixed to lie cither too high or too low. • "After the termination of the committee's meeting a discussion was held with, the Beard of Agriculture, at which the conclusions were approved. "Chairman of Produce Committee. "(Sgd.) C. J. REAKES, AUCTION SALE AT CHRISTCHURCH BIG DROP IN PRICES. ' 'Bv TeleeraDh-Press Association. Ghristchurch, November 15. The first auction sale of wool since the expiration of the commandeer was held to-day, when close on 2500 bales were catalogued. There was a big representation of buyers, but business was confined practically to local fellmongering firms and several local mills. Values slumped badly on commandeer values, representing a decline of quite sixpence per lb. on medium and low-grade wools. Super merino sold to 23d., last November's approximate value, but super half bred was down quite sevenpence per lb., and crossbreds were similarly affected. Tho sagging in halfbred values was due to the local mills operating only to a very limited extent. Only 3GO odd bales of the catalogue were disposed of, and these consisted principally of pieces and bellies. All buyers had sharply defined limits. The surprise of the sale was the lack of demand ior wool of the quality of CO's and upwards. A weak sale for crossbreds was anticipated, but the drop was greater than expected, and competi-tion-was only forthcoming for tho best quality. Following is tho range ofvalUeS '- . d. d. Super merino to 23 Super halfbred 121 to 131 Average price jondon Less N.Z. under ;reasy estimated greasy Govt. . value, charges, value, purchase. d. d. d. d. 282-32J 5-5! 233-27 21 -23 20-313 5 21-263 184-21 23 « 181 '16-171 17 -183 41 121-1U 151-17 /HJ-151 4! 10 -103 141-153 Medium halfbred 10! to 12 Super three-quarlerbred .. 10 fo 11} Medium do '. 8 to 10! Super crossbred 7 to 81 ■ Medium crossbred fl to-CJ First halfbred 11l to 13 Second halfbred do 7 to 11} Crossbred pieces 5! to 7! Eorks 23 to 6^ Crutchiiigs 3 lo 7J