WOOL PROSPECTS

Evening Post, Volume CXXVII, Issue 1, 3 January 1939, Page 12

WOOL PROSPECTS

ROOM FOR A RISE

WELLINGTON OFFERING

Wellington will begin the 1939 wool sales on Monday next, January 9,.with a catalogue up to the limit of 24,000 bales. Since the last sale of the year, held at Dunedin, December 20, the market has not been tried out, so that special interest will attach to the next s-iles to be held in this centre. Diffidence is a characteristic of those engaged in the wool trade when asked to prophesy, but the well-known firm of I brokers, Winchcombe, Carson, and Co., i take a rather optimistic view of the future. Reporting December 28, 1938, they remark that "if wool sells as freely in 1939 as it has in 1938, no com- i plaint on that score will be justified, but a higher range of prices for it is j certainly necessary to produce reason-! ably profitable returns for growers. ARTIFICIAL FIBRES. "The only advantage of the existing scale of values is the ability it! provides for the sheep's staple to keep j the use of substitute fibres in check. In the first stages of the development | of blending artificial fibres with wool in Germany aand Italy, Japanese de- i mand, for the sheep's product was in- j creasing and its presence to a considable extent offset the reduced inquiry from the two countries mentioned. The seasons 1935-36 and 1936-37 were-fav-ourable periods for growers, the averages for Australian wool for the two years being 14.2 d and 16.7 d per lb; but those were two very light buying periods for Germany and Italy, high values being experienced despite their reduced operations. "The quantity of wool bought by those two consumers has increased since its cost declined. They are short of funds to pay for imports and the lower price enables them to buy with more freedom. The situation indicates that the displacement of wool by artificial fibres is more a question' of financial 'ways and means' \ than a preference for the latter. With larger supplies of wool available more of it has been consumed at the German mills. In Italy, however, during mid-1938 the quantity of not only j wool but all other fibres decreased. Of late fortunately Italian orders for wool have revived considerably. Dur- j ing November over 12,000 bales yere exported from Australia to Italy or nearly twice as much as the quantity shipped from July to the end of Oc-, tober. I FACING THE FACTS. The authority above quoted has in mind the Australian clip which comprises 84 per cent, merino and 16 per cent, crossbred and similar wools; whereas New Zealand produces 2 per cent, merino and 98 per cent, cross-' bred and strong wools generally. The recent demand has been for crossbreds. Winchcombe, Carsons, although anxious to see wool prices on higher levels, state, "we cannot be blind to facts. A rise of 10 per cent, to 15 per cent. on present figures would probably not have any appreciable effect on German and Italian orders; but in December, 1937, wool was 70 per cent, dearer than it is today. If by some extraordinary circumstances rates rushed up to that basis, it is practically certain that Germany and Italy could not follow them .upward. As a result such a spectacular advance could only prove temporary. "Mill activity in the United States has definitely recovered from its depressed condition seen earlier in the year. Unfilled orders'for men's woollen textiles on hand at close of October were 25,000,000 yards, being 9,000,000 yards more than a month before. In March the unfilled orders for men's, women's, and auto cloths were only 15,896,000 yards and at the end of September 24,800,000 square yards. During the five months ending November 15,721 bales of wool were exported from- Australia to America. The total for the whole of last n season was only 16,522 bales. Some regain m American orders has consequently been seen. '« " ... "Reason for an outlook tinged with optimism is justified. Room for a rise exists and if 1939 is free of the international unsettlement which harried the world in the past twelve months, it should eventuate."

Sydney sales resume today