WOOL "SETBACK"

Hawke's Bay Herald-Tribune, Volume 81, Issue 20, 16 October 1937, Page 17

WOOL "SETBACK"

Fear Complex Affects Markets SEASONS PROSPECTS Jbiveryone is talking about the ivooi "setback," saye a writer in tlio Australasian. It is subject of anxiaua discilssion, nob only among the producers Who liare' wooi to sell, but alJ through the oountry, and in business and iinancial cu'cleB. From pll accounts business genetally has suffered a, relapse. Tho stock exthanges have becoine nervy agaxn, aud the spirit of enterprise that a few molitbs ago had been stimulated' irlto healthy activity seems to havo been drowned, ot, shall wa say, drenched, by a Wave of pessibiism. And no wonder, because the whisperings 'of tho probability of war — a major world war — have been going tlie rounds persistently oJt late. That in general terms "appears to be the Bituation. A fear complex affeuting all markets has developed, and the buyers of raw niaterials, including wooi, are inclined to opeTate dautiously at the inoment. Yet there are many reassuring featureS. Well pldced and discriminating observers hold tirmly lo the belief that, despite all the threatening signs that are cloudiflg the odtlook, tlie pbriod of cx-isia lias passed, and conlideuce will soon be restored. Indeed, the downwai'd tendeoicy of cominodity and stock markets appears to iiUVe been arrcsted already. Averages Saiisfaotorjr. Moteover the setback to Fool, which has bden taiked auout bo much, is liot after all nearly as pronounced as .was stated in Bome quarters. Why, the undertone or atate of .the wooi inarket is qtiiie sound. There has been a iall in values it is true. Faulty wools lmve declined (is much as 15 per cent., even up to ^0 per cent. for sonie sorts, but good wools are still jn keen demand at satisfaotory prices, which afe averagiug ou.t fdlly 10 per cant. higher than a year ago. That at least was the exp'erience in Brjsbane on September 15, where representative Clipa sold Well under strong general competition. For example,' the Isia Powns clip — admittedly one of the leading ciips of Queensland— realised up to 2dd per lb., ahd' 762 bales of fleece wooi averaged 20|d per Ib, There were 205 bales of necks, wliich sold at 21jd and averaged 191d. Broken wooi sold tp 20^d, averaging 19|d; pieces sold to 16d and averaged 15jd; bellies to 151d, aild averaged 13|d; and the Isis' DownS locks averaged 9Jd per lb. • . There should be no complaint about averages such as these. It is not suggested that the prices given are high. Far from. that; they would nbt be "high" i£ the entire clip averaged 21d per lb. ; but doubtlesB they are pleasihgly payable, and what# ttiore could be expected under conditions as prevail at present? Prices Compared, Except tlxat prices are higher now than in September, 1936, market conditions are Very similar. Then as now publio attention was directed to the darker side of the market, and I recalt writing sopiothing like thifi about a year ago. Let those Who are inclined to bemoan the oxisting situation and prospects compare the curremt averages with the generaf averages for the seasons 1929-30, 1930-31, 1931-82, 1932-33, and 1934-35, and they may become lesa pessimistic. In the samo way tlioso who ara unduly cheerful might look at the averages for the seasons 1922-23 to 1928-29, 1933-34, and 1935-30, and they will see nothing very alluring in recent prices. Here are the averages of the seasons of bad and gocd prices for tho pessimists and the optimists to pore over:—

Average price per lb. Season. d , 1929-80 .1. I*M| 10.29 1930-31 ^ 8.59 1931-32 ... ^ ... 8.48 1932-33 ... 8.72 1934-36 ... ... 9.76 1922-23 ... />«. 18.15 1923-24 ^ ... ... 23.69 1924-25 ... «... 26.95 1925-26 ... ... ... 16.49 1926-27 ... ... 16.86 1927-28 ... ... 19.50 1928-29 '16.44 1933-34 ... ■.«. ... 16.84 1935-56 ... 14.01 | Then followed tlie good price season j of 1936-37, wben wooi averaged 16.48d per lb., und tliero is the coniforting expcctation that the averages this season will not be appreciably, if at all, below the averages of last season. Nor is wooi dear at about 16id per lb. all round in Australian currency. Crossbrads In Londort, Orossbreds, however, have been relatively dear. These sorts, particularly the coarser sorts, have had a remarkablo run, and toward the end of last season were bo scarco as to be almost unprocurable. The war ecare created a special demand in crossbreds, so it was said, and since the lear oi tnoro wars was extending there was a rather widespread impression that whatever might happen to merinoes the crossbred market was likely to boom, but crossbreds have eased a little in Lonckm. Nerertlicile.ss, they are still "up in lln- uir," comparcd with merinoes. ' Jnst look ab tho Bradford crossbred tops ijuotutious of ■ September 17 and tho quotations of a year ago. Here they cvre ; —

Tho finer quulity crossbreds or comebacks have registered a sharper fall in London than the coarser crossbreds, and have moved more in line with the nierinoes. It will be seen from the following comparisous of tops quotations that merinoes (70'a down to 60's) and 58's comebacks Or fine crossbreds, aa*e Bffill well above the rates of September last year, although all these cbunts- liqve fallen from the prices ruling in August.

Dcniand From dapdn, A fcw private saies of wooi for shipment to aJpan are believed td have been made in Melbourno and. Sydqey, and there was a little bidding On belialf of Japan iu Brisbane, but Japan is not yet in the open market to any purpose. Itepresentativea of tlie wooi industry have been in touch with the authorities in Ganberra aboilt the arrabgements that wero thoUght to liave niado to ensure a steady if restrictfcd Volume of wooi purchases in Australia for Japan, and there Would oppear to be no reason to anticipate any serious difflculties in the working of the trad* ing agreement between Australia and Japan. Nobody will be aurprised if Japan comes intd the market ffeely at any time, but there is a feeling in wooi circles that the manufacturers in Japan ate in no hurry td . purchasfe large quantities or wooi. They afe aaid to have considerable fitocks in hand, and the Government of Japan is pressing the manufacturers to use as mucb staple fibre as possible. Naturally Japan will make provieion to purchase as little faw material in foteign countries as she can, because of the need to maintain exchange stabiiity, a most difficult task at present owing to tlie trouble in Cliina. Also having an adver&e trade balance Of between 700 and 800 ihillion yen; Japan is likely to spread her foreign purchases over as long a period as she can, but Sooner of later she will need more Wooi, and the Selling brokers, as well as the growers' representatives, are quite hopeful that she will take her qtlota of about 500,000 bales from Australia this eeason. Part of that quota may be in hand already awaiting sliipment. Who knows?

Sept. Sept. 1936. 17, 1937. d. d. Counts per lb. per lb. 56'a w. 20J 28 s, 50'a ... 16 25$ 46' s • 14-1 25 4-1 's ... ... 13$ 25

BRADFORD TOPS QUOTATIONS.

Sept., Aug., Sept. 37, 1930. 1087; " 1937. •d. per ib. d pi fib. d per lb. Counts. (Eng.) (EngN. , (Eng.) 70'a 34 40 37 64' s 32$° 38 35 60' 3 81$ 36$ 34 58's 25$ 32 ' 31