THE WOOL POSITION.

Gisborne Times, Volume XXV, Issue 1991, 29 January 1907, Page 3

THE WOOL POSITION.

CONSUMPTION v. SUPPLIES. LIKELIHOOD OF TO-DAY’S PRICES LASTING. (Bradford correspondent Dalgoty’s Review.) Tho wool situation deepens into interest, and tho latest turn of events lias cleared the horizon very considerably. so tting at peace a good many disturbances which have lately led to some disquieting and rather unpleasand experiences. The “bears” have been completely routed, their tactics discovered in broad daylight, and tho position turned in favor of sellers. Everything at this time of writing wears a vastly different aspect to wliat obtained a month ago, and as ono looks out upon tho wool world, a far different scono is presented. The soft, muggy, depressing atmosphere arising through fear of a serious fall in prices has given place to tho “ozone” springing from a large turnover and rising prices. This has had the effect of producing a very much better temper throughout tho entire market—everywhere there is a readiness to buy and nil eagerness to acquire the raw material. At the moment there seems to he little concern manifest about the future safety of values, the market generally assuming a rather “bullish” attitude. It is really surprising the difference there is' in the temper of users. A good month back nine out of every ten were “sure” that wool was going to be cheaper. Two weeks ago the same parties were “doubtful” as to values coining down, while to-day they are buying all tlioy can of the raw material, friglitened to death almost of things “getting dearer.” In other words, it has been a case of .expectation of cheaper wool, and now it is actual realisation of prices going against them, so they are having to buy. It is well known that the recent attempt to break the market was-pri-inarily due to expectations of a large increase from Australia, and so today with extravagent ideas thrown overboard the subject of prices in relation to supplies is no doubt being adjusted. The new Australian season lias opened fairly -auspiciously, and prospects now point to a continuance of current values. It is this question of larger supplies as bearing upon prices that we want to consider to-day, for after the spurt of meeting the more pressing needs of users the real tug of war will begin. To-day in every market in tlie world where the raw material is sold there is a rush being made to cover a lot of forward business, and this, no doubt, is being reflected in advancing rates.

A BEAR” VIEW OF THE FUTURE. The inevitable law of cause and effect is at last being recognised in the wool world as being the safest basis on which to work. The attempt to break prices by selling forward at, Id to lid less than current quotations is now a thing of the past, and we are not likely to seo its repetition at least this season. The recent upsetment of values both in Bradford and Roubaix need not have occurred but for the determination of a few venturesome souls to break prices, which cannot fail to result in heavy losses. Even among those who have not sold forward, and so backed their opinion, there are still left many who think that when offerings increase, I ami large direct arrivals have to bo negotiated, that values will move to a Lower plane. Afriend of mine who t,n S /rad over 50 years’ experience in J. wo .il trade wrote to me a few davs mm to this effect:—“l fancy, somehow, you will find that the flurry at Bradford is over for the present in crossbreds, and my opinion is just tho same as ever that merinos must fall and especially jf money keeps dear.” The above is written by a man whose prognostications m the wool trade since the beginning of 1899 have been remarkably correct, and but for that his views would be entirely discounted. This man to-day takes no more than a passive interest in wool matters, although every week he presents his views publicly to many men in the trade. Whether or not his views prove to be correct, they are at least worth consideration even by growers and users alike. In analysing the above expression of opinion it should be noted that the gentleman is basing his conclusions solely on an expected large increase —over 200,000 hales—and the fact that prices are still high. In 1899 he said, very pithily, that many then would bo lamed or killed, and to-day, although prices are not by any means running riot, still ho fails to see that with Australasia turning out a record quantity of wool that to-day s values can last in tho face of such a high bank rate as that which now obtains. Time alone can prove how far such prognostications are correct; but a few users have not yet committed themselves to tho future by buying in anticipation of any liigber values, but, the opposite. On the other hand, many are still determined to go from hand to mouth, and to buy no more than will keep going their machinery, believing that early nexif year they will be able to buy to still better advantage.

ALTERED CONDITIONS. Those in closest touch with the manufacturing world cannot help but notice the vast change—almost 'amounting *to transformation—which has come over tho textile industry during the past two years. Tho writer has spent all his life in and about the mill, beside going to London and Bradford markets, and nothing has impressed him so much as the altered conditions of the whole trade. To hear a manufacturer say to-day that he is quiet is the exception and not the rule. What a different tale this is to the chronic complaints of four and five years ago only those on .the spot can know. But hero we arc at the beginning of a wool season with spindles and looms running full and overtime, and with no difficulty whatever in selling the manufactured fabric. Instead of users finding the most difficulty in securing orders to keep going their looms and spindles, the difficulty now is to obtain wool, cotton and mungo to meet fhosp orders. Scores of looms to-day '*-p standing t-lio West Riding because inability of the Lancashire ° ,}" v;im spinners to supply fast cotton _ warps. These are very enough cn ed both iu thc dress extensively . . d 6Jld i n the outside trade of Brad A a far differ . woollen yarns, i to what we have out state of anans , tlmt known, indicating as • , withtrade everywhere is very S? 01 }' v '% out any exaggeration, it is _ , to say that Bradford spinners I™'° more work in hand at present tn.an since this century dawned, a proo. that wool of all qualities is going into consumption. The complaint this last two years has been- that the woollen and shoddy trades have been the busiest, while worsted spinners have had hard work to run their frames full time. To-day all sections of the trade are alike busy, vyitli the consequence that wool is being put away with the greatest possiblo speed. Supplies may after a while be large and adequate, but manufacturers need all the increase that is available, and it is very questionable with many if demands are not yet ahead of supplies. It is not as yet possible to say that users are being able to supply all their needs with ease and comfort, for they are not. Bradford topmakers were never in a worse position to make deliveries of combed tops for immediate consumption. A big weight no doubt is sold forward for next year’s delivery, bub ail the wool has yet to arrive from which they are to bo made. Stocks of tops to-day are practically exhausted; hence the | trade is in a position to absorb every

ounce oT material that has to como forward for soma time to come. CONSUMPTION ON THE INCREASE. One of the greatest mistakes which the majority are making to-day as they survey the wool situation is the over-estimating of tho probable increase and the under-valuing of consumption. On the former they have tlio magnifying glass put on with no mean strength, whilo ill looking at the latter the telescope is turnod completely found. The writer’s own view is that ono is about equal to tho other, and that, the increased production is no more than what a larger consumption can comfortably deal with. Some will say that, machinery is not being any more fully run than what it was during tho late Eastern war, and as there are no now woollen or worsted mills being built in the West Riding, that consumption cannot be mere. Lot no man tako any narrow or parochial view of this groat question. The "West Riding ol Yorkshire is not, tlio only centre of consumption, but even hero thoro will he during the next nine months a larger consumption of wool than during the last similar period. How’s that? some may inquiringly ask; and tlio answer is an easy olio. It is well known that the last three or four years liavo been booming times for the woollen manufacturers of Huddersfield, Dewsbury, Leeds, and neighbourhood, tweeds and . khaki being all tlio rage. All this time the worsted trades of Bradford, Halifax, Bingloy, Keighley and neighbourhood have had to take a back seat. When tweeds are fashionable, serges and worsteds are usually “off,” consequently this directly affects both combers and worsted spinners. During the last month more orders. for worsted spun yarns have been given out in Bradford than lor any similar period sinco 1900, and it is here that we are going to see an increased consumption of fine wool. The render may not, know, but it is impossible to adulterate worsted yarns .as can bo done in tlie manufacture of woollen yarns. "Worsteds can, as a rule, bo relied upon for being all wool, cotton or sboddv never entering into the production of worsted yarns. This is an important item, and one that is bound to hear good fruit. Plenty of spinners have this last few weeks accepted contracts which will serve them well on into next' year, which simply means that already a largo consumption is assured. These yarns are as much for export as for home use, clearly showing that the demands of tlio outside world are large and still improving. Some seem to think that fashions are moving on tin worsteds, in which ease more grist still will he brought to tho consumptive end of the trade.

ARE PRICES HIGH ENOUGH?

At tho moment tho future of prices is not being so seriously considered as it was a little while back, the majority of users being anxious to secure some stock at the best possible liricc. After a while there is no doubt that this subject of values will again be thrown into the melting pot and receive very serious consideration. Whether or not prospective supplies will break down values time alone will show, but till January at least prices are tolerably safe. The writer’s view is that tlie present range of values is about high enough for all practical purposes, and it will be as well even -Jor growers if they remain steady and firm. There never was a boom without a slump, and with the English bank rate at 6 per cent., no incentive will come from that source, but rather tho opposite. Then it should be borne in mind that the new clip from the River Plate, South Africa, Australia, and New Zealand will altogether be pouring into Europe and America, and that 1 the same has to Me financed. It will therefore be seen ■that the financial burden to be lifted is in no sense light, lio.nce there is a great need for making haste slowly. The monetary conditions, no doubt, are unfavorable for forcing a stronger pace, and tlie principal burden will fall upon the consumptive end of the trade. Some seem to think that there has recently been more smoke in connection with crossbreds than actual fire ; but if current gossip in Bradford is anything to go by, then the future need not be feared in this department. Yarn exporters have placed some very heavy orders, which will compel spinners to buy, and topmaliers must purchase the raw material.

Taking all things in consideration, current values, should be maintained, for consumption is quite able to lift all the wool grown. If a stronger pace is forced, it will only increase the difficulty of maintaining it, and lyool prices seem to be now high enough. Pronounced steadiness will no doubt encourage trade, but once let a “shaky” feeling arise regarding the future and confidence will be lost. Nothing so paralyses tho market as lost confidence, hence we say a steady, continuous and good trade at to-day’s rates is much more to be preferred than a rushing up of prices at which the ultimate buyer is bound to kick. To-day’s values are resting on a firm and solid foundation, namely, consumption, and this wants encouiagin gas much as possible.