THE H.B. TRIBUNE SATURDAY, NOVEMBER 19, 1927 WOOL PRICES

Hawke's Bay Tribune, Volume XVII, 19 November 1927, Page 4

THE H.B. TRIBUNE SATURDAY, NOVEMBER 19, 1927 WOOL PRICES

♦pHE money return. to be secured for our wool clip is a matter of very great importance to the whole of the Dominion. It is of very special importance to the Hawke’s Bay district, where as yet the sheep provides in fleece, mutton, lamb, and tallow by far and away the greater part of our exports, and it is mainly upon our exports that the community depends for its prosperity. It is only with what we send out of the country that we can effectively pay for the many commodities ministering to our comfortable living that we still have to bring into it from abroad. It is therefore not only for the sheepfarmer but for the people as a whole a matter of concern as to the value in exchange that is put upon the products of his flocks. Thus it becomes a subject of congratulation to all of us that the wool sales for the season have opened with prices that are very substantially in advance of the average of those realised last season and, it may as well be added, of the expectations of even those among us the best informed on prospects. The resulting income of fresh money, or credit from overseas will assist materially in relieving the financial tension that has been adversely affecting all classes, from’ the highest to the humblest.

But while these congratulations may be passed along among us all, prudence dictates a word of warning against the indulgence of any assured assumption that the present unexpected level of prices will be fully maintained throughout the season’s sales. Those who are in most intimate touch with the industries that eventually absorb the raw material fully recognise that conditions for the moment are in many respects abnormal. It is generally understood among them that in several quarters combers, spinners and manufacturers have allowed their stocks to run down to a minimum and find themselves, in order to keep their machinery going and fulfil undertakings, forced to replenish even if they have to pay exceptiohal prices. It is perhaps safe to assume that these conditions apply in more directions than each individual group of buyers had anticipated and that hence arises the unexpected keenness in competition for the unusually limited supplies that are early available. The chances would thus seem to be in favour of a more or less gradual steadying of the market on a somewhat lower basis. The sheepfarmers themselves will scarcely need to be reminded of the experience of two or three years ago when, as now, early prices went up with a bound only to come down later on, to a bedrock that was most disappointing to the over-sanguine among them. On the other hand, while too high hopes should be thus regulated, there are other factors that justify the expectation of a steady market at fully remunerative values. Australia has had the misfortune to have the numbers of her flocks very appreciably reduced by droughts and, though the bulk of her wools are of a different class from ours, shortage in them has a decided effect here.

Then, the United States finds its home supply still diminishing, thus necessitating bigger purchases abroad, while there is some talk of a relaxation there of the heavy duties so far as they affect the coarser grades of wool. Beyond this is the fact that the economic position on the Continent is generally improved and improving and that manufacturers there have better home markets for their wares, apart from export prospects. Even Russia has become a big buyer, taking a very large share of Australian wool, although it has to be noted in this connection that it is shrewdly suspected most of it is wanted for the better outfitting or her always big and menacing military forces. The South American output will probably be bigger this year than last, but not to an extent likely to affect prices materially. What we have probably to be most concerned about, both on our own account and on theirs, is the buying capacity of those who handle our wools in the Old Country. From the reports that reach us it would seem that Bradford is finding considerable difficulty in contending successfully with Continental rivals. This difficulty is attributed to the much heavier taxation to which the country is subjected and to the higher wages that have to be paid. The taxation cannot be escaped, but it is said that a movement is being made to arrange for a reduction in the wages scale, a recourse which we out here cannot but deplore as being necessary among our own kin. As the Yorkshire group of buyers has hitherto been by far the biggest among those operating out here, any weakness on its part is sure to reflect sooner or later upon our selling values. So far, it is said to have been very restricted in its operations, leaving the highpriced wools very much to the other buyers. There may, however, be more method than necessity in thus refraining in what is probably regarded as an inflated market. Your Yorkshireman is generally very well able to look after himself, and later on, when things settle down a bit, he will no doubt be in evidence as of yore- Taken all round, the outlook for the season is “set fair” for a good quittance, so long as sellers do not entertain exaggerated ideas with regard to real values.