WOOL PROSPECTS

Hawke's Bay Herald-Tribune, Volume 81, Issue 11, 6 October 1937, Page 13

WOOL PROSPECTS

Market is Sound But Uneasy STABIUTY NEEDED

Tlie wool market has" not procSeded up to general trade expectations, Its special stutistical soundness from the selling standpoint has been offset- by the tension created by world-wide iuternational nervousness, report Mes«rs Wincbconibe, Carson, Ltd., Sydney. Uneasiness bas not been confined to the sheep' s staple. Ootton and other commodities have been affected. and more settled conditiona are necessary for price stability on world markets. Apart ' from that aspeot,. for some time the cost of wool has. been above the seliing figjures at which tops have readily sold. Turnover in the latter has cOnsequently shown reduction, If, however, general circumstances had been more favourable, the strengfch of tlie raw material situation would probably have been f elt to a greater extent and buyers of semi-manufaictures would ftave found it necessary to come more into line with the cost of wool.^ Regrettable though the easing in prices for tha sheep' s staple may h( rio cause for undue alarm exists regardingj its position. On the opening sale day thjs season prices were 25 to 30 per cent. above September, 1936 figures and about 15 per cent. higher than in November-December last season. The market at the latter period, with much better selections than are now being submitted, provided results fof growers which supplied exeellent returns. Average 64's tops then changed hands freely at 36d. in Bradford, and it is considered that good business can now be effected at that level. _ The trade abroad awaits stability in prices and, once the market attains that need, turnover in mill producta ia likely to revive. supply Not Exoesslve. The supply position of wool has not altered in the past few weeks. Pro-. duction for some years has only kept pace with production. Tho world' s clip will not provide excessive sup'plies this season if prices are on a basis at which goods. can be freely sold. The general demand from Yorkshire, Italy, Germany, France, Belgium and Australian milimen at the first Sydney wool saies gave- a definite indication that the raw material is required. The easing- in competition since experienced is not a sign that wool is not wanted, tlt has been caused by uncertainty as what is a safe level to buy. The pasic factor in wool prices is the publio at shop counters, and if they cannot or will not purehase beyond specified limits, business must eventually face that fact. The strength of public purch^siug power has not weakened. Employment has extended and it is not likely to contract while rearmament, among other factor s, has niillions occupied iu the speediest possible production of all the equipment attacbed to naval, air and military defence, At the present juncture no person can foresee with definite aceuracy the exact' basis at which wool prices will attain 6tability. Meanwbile, however, we see no reasqn to consider that Australia will not eecure a giood payable range of prices for her clip, unless international developments disrupt business. , For a considerable period financial authorities have stressed the fact that tlie level of cominodity prices is largely dependent on the price of gold. Actually the price of gold in London has recently been quoted at slightly over £7 per ounce compared with slightly under that figure during the preceding month.