THE “SLUMP” IN WOOL.

Gisborne Times, Volume V, Issue 79, 11 April 1901, Page 4

THE “SLUMP” IN WOOL.

(Christchurch Press).

A very interesting and well-worked-out article on the position and prospects of the Australian wool trade appears in the March number of the “ Australasian Insurance and Banking Becord.” Seldom have the ups and downs of this particular branch of commerce been more vividly exemplified than during the last twelve months or so. In January, 1900, the price of wool had risen to an extraordinary height, with every prospect, according to the best authorities, of a continuance for a year or so. Now, we are told, Australian crossbred wools are at absolutely the lowest level ever known, and merino wools arc within about 10 per cent of the lowest point. In one year, the price has dropped, in round numbers, ten pounds a bale. In January, 1900, super sixties tops in Bradford was quoted at 3'2ld, on. March 14th last they had dropped to 18fd. What makes it all the worse for the Australian pastoralists, is that simultaneously with the decline in price, there has been r a great falling-off in the clip. The total production for 1899 of Australia and New Zealand was 1,600,000

bales, as against 1,675,000 bales in 1898, thus showing a decrease of 75,000 bales. For 1900 the clip is estimated to be about the same as in 1899. It is more than 800,000 bales less than the output in 1594, and 379,000 less than that of 1895. Taking the clip this year as being the same as last, the Becord estimates that the clip of 1900 will realise about <£17,600,000 or .£8,500,000 less than did the 1899 clip, similar in size. This is not a very joyful fact for speeches dealing with the inauguration of the new Commonwealth. To find an Australasian clip worth only .£17,600.000 we have to go back fourteen years, to the clip of 1886. So far as New Zealand is concerned, it is satisfactory to note that the 1899 clip showed an increase of 2000 bales as compared with that of the previous year, but, of course, we share with our Australian brethren the “ doleful dumps” of low prices. It naturally becomes a subject of great interest to enquire, first, what is the cause of the falling-off in quantity; and, secondly, why prices are so low ? The former is easily accounted for. It is due to drought —particularly in Queensland. During 1900, the colony was visited by “ absolutely the worst drought ever known before by white man.” The result is that out of 15,226,479 sheep alive at the end of 1899, it is believed that there could not bo much more than 8,000,000 alive at the end of 1900. The sheep of Australasia, it is estimated, have fallen in eight years from 124,500,000 in 1891, to under 93,000,000 in 1899, and the number at the end of 1900, it is believed will be considerably less—perhaps not more than 90,000,000. The cause of the decline in prices rests a little more on conjecture. The theory of the writer in the Becord—and it seems to us a very so und one—is that the great cause is that the previous rise was too high. There was in 1899 every justification for a moder ate rise, but as a matter of fact wool was “ boomed ” to an extent hardly ever before experienced in the history of the trade. In one year merino wool rose in value about 70 per cent. “.Two results followed this great rise. One was that a large number of firms found that they had bought more wool than they could comfortably pay for, and the other was that the great rise in the prices of manufactured goods checked consumption. These two combined made it impossible for the rise to be maintained, and the reaction set in. Not only has the rise of 1899 been entirely lost, but we are now down to the level of four years ago.” With the severe lesson which has been administered to the'wool trade during the last twelve months, it is not at all likely that another “ boom ” will be engineered for some years to co me. Prices, however, are now low that it seems impossible they can fall any lower. On the contrary, following the general rule, the low prices ought to stimulate consumption, and this, combined with the lessened output, ought to bring about a recovery in prices. Seeing that the prosperity of Australasia is largely bound up with the prosperity of the pastoral industry, it is to be hoped that a rise will not be long deferred.