SYDNEY WOOL SALES

Dominion, Volume 28, Issue 88, 8 January 1935, Page 12

SYDNEY WOOL SALES

Very Strong Competition MARKET FIRMER By Telegraph.—Press Assn. —Copyright. (Received January 7, 10 p.m.) Sydney. January 7. The Sydney wool sales were resumed today under very strong competition. The market was from par to 5 per cent, above December closing rates for all except short and doubtful yielding fleece wools, which showed no appreciation. Greasy merino made to 16_id. The offerings numbered 11,635 bales, of which 11,032 were sold at auction, also 1222 bales were sold privately. Average prices obtained In the byilney wool market for the last half-year are as

MARKEI OUTLOOK -Some Favourable Indications Winchcombc, Carson, Ltd., Sydney, reports:—Prospects are certainly favourable for the continuance of ready sales ot wool at new year auctions. A slight rise in prices looks probable at opening sales, and that development would offer encouragement to growers to meet the market. There is no sign at present, however, of values showing a substantial advance. The buying power which enabled Australia to market about 1,200,000 bales during the first half of this season was largely prompted by the fact that the price of the raw material was attractive to consumers. It gave them reason to anticipate that the figures at which they could manufacture and sell goods wou.d be likely to stimulate turnover. That expectation has proved correct. In practically all countries abroad tratie has expanded under the impetus of the reduced and fairly stable level of prices which has ruled since September, but it does not follow that the expansion would be maintained if under existing conditions rates for wool and the goods made from it advanced appreciably. We .<lo not wish to convey the opinion that if prices rose, say, 10 per cent., or even more, business must recede, but, until world trade extends considerably and the earning power of the bulk of the people is larger, it does not look .possible for wool or any other commodity to rush safely to a high basis. The worst point of the world depression, however, has been passed. The signs are that gradual recovery will be seen. The extreme tariff policy which was practised so freely and contributed to the slowing-down of commerce, has run its course, having proved its fallacy. Even where duties have not been reduced, trade treaties have been .effected, and they are really a phase of tariff reform. In that manner, as well as in other directions, commercial sanity, is slowly returning. The distant future, therefore, holds promise of better times, but distant prospects do not produce very high prices for wool which is shorn. Apart from the fact that developments may occur which retard revival, sheep go on growing the staple. If all growers waited to sell their wool until prices rose to a marked degree, recovery in values would probably not occur. Stocks Avould accumulate and their vastness would render would-be purchasers nervous. That is why the generally adopted policy of selling each season’s clip within a specified marketing period has proved advantageous. While the supply of wool this season appears ample for world needs, it is not of dimensions likely to prove beyond consumptive capacity provided prices keep within moderate limits. As fur as merinos arc concerned, the reduced South African supply is an offset to the increase in Australia. A recent official estimate puts the production nt 650,000 bales. Some authorities consider Flint the figure is too low and that 700,000 bales is nearer the mark. Even that total is 265,000 bales less than were produced in the country during 1032-33. Despite the carry-over at June 30 last, the merino available is not “mountain-like” in quantity. We, therefore, consider that there is reason for hope that at rates in the vicinity of this season’s range, business jn mill products will continue tq extend and wool pass steadily into consumption. Australian Woolgrowers The necessity for Government action to assist the Australian wool industry was suggested by Mr. C. L. A. Abbott, Federal member for Gwydir, last week. Mr. Abbott, who has recently returned from a tour of his electorate, said that he estimated that the position of the wool growers very closely approximated that of the wheat-farmers as far as capital debt was concerned. The indebtedness of the wheatgrowers was estimated at £138,000.090, and that of the wool-growers would be at least a similar amount. The wool season was sufficiently advanced to show that the return to growers would probably be between Bd. and 9d. per Ibl, yet an ounce of knitting cost one shilling. Thus the woolgrower only got £B4 per ton for his wool, while Australian firms charged £1792 per ton for wool that was the next step from the raw material —an enormous discrepancy. The spurt in price levels in 1933 was not a complete blessing. Although it. enabled growers to reduce portion, of their indebtedness, it gave the general impression that all was well with the wool industry. “1 consider,” said Mr. Abbott, “that the wool-growers can only be saved by a world rise in prices, which is a remote contingency, or by Government assistance, such as a bonus on wool, in the same way as the wheat-growers arc being assisted. a further very drastic reduction in interest rates for primary producers, or either a ‘freezing’ or a definite writing down of portion of the principal. It is true that the Federal Government pronose* to devote £12,000.000 to a rural rehabilitation scheme, but when the wool, and the wheat-growers alone owe £200,000.000. and are still producing at a loss, surely this scheme does not even approach the fringe of the problem.”

Although there are a few merchant orders and some warship work in prospect, analysis of (he tonnage being comipleted and the work coming forward does not reveal a cheerful outlook for the industry. We find that for every three ships.commenced in British shipyards in the last three months five have been launched stales the “Syren and Shipping,” and in some districts the ratio ot launches to ships commenced is much higher than that, while as a whole the contracts placed in recent months arc for comparatively small vessels. At present the curve of employment in shipbuilding is tending to fall, and. as Commander Sir Charles Craven stated at the centenary dinner of Lloyd's Register, only 23 per cent, of the building berths are at present occupied, compared with 30 per cent, in June. In view of the large amount of tonnage nearing completion and the number of vessels about to be launched, it would seem that to maintain even the present level of employment the industry would need to receive between now and the end of tlie year something like three or four shipbuilding contracts per week , Such a flow of orders is not tn prospect, but it may be. as Sir Alexander Kennedy stated at the recent annual meeting of the Fairfield Shipbuilding and Engineering Company, that the easing off In orders is due to the imminence of the proposed legislation In aid of shipping, nnd should those proposals meet with the approval of the shipowners, as he Is hopeful they will, the building of tonnage will almost certainly follow.

under: — Per bale. Per bale. Week ended £ s. d. d. September 8 ... 13 4 10 10 September 15 • • > 12 13 6 September 22 ... 12 10 2 9.5 September 29 ... 12 2 0 9.1 ... 12 6 2 9.3 October 27 .. ... 12 9 2 9.4 November 3 .... 13 4 10 10.2 November 10 ... 13 13 4 10.5 November 17 J •» 2 4 9.9 December 8 .... 12 2 b 9.4 December 15 ... 12 5 3 9.6 December 22 ... 12 7 11 9.8