THE H.B. TRIBUNE WEDNESDAY, DECEMBER 7, 1927 WOOL VALUES

Hawke's Bay Tribune, Volume XVII, 7 December 1927, Page 4

THE H.B. TRIBUNE WEDNESDAY, DECEMBER 7, 1927 WOOL VALUES

yyiTii another local wool sale in prospect within a day or two the question as to whether earlier good prices will be maintained is doubtless concerning a good few growers. The reports of Wellington’s second sale for the season indicate some easing in the competition, and it is fairly evident that even those behind the scenes are a little bit puzzled to judge how selling values are likely to go for the future. Press comment from Australia received by yesterday’s mail suggests that there also the well informed are doubtful as to future tendencies. Whether on account of the differences between employers and employees, of which, up to the time of writing, we have heard nothing for two or three days, Yorkshire buyers have there as here been operating with very much less competitive freedom than is usual. The Bradford correspondent of a Sydney paper, writing at the end of October, says that there is nothing to wonder at in this, quoting figures to show that, under the then current prices of raw material and rates of wages, it was impossible to compete profitably with Continental rivals even in the home market. At the same time the suggestion was made, even then, that if buyers from other countries went on securing wool as they werd doing, Yorkshire would be forced to consider the position and come more prominently into the ring if its machinery was to be kept going. A definite decision on this point by the trade as a whole was expected to be made within “a few weeks,” but does not yet appear to have been taken —at any rate in the way of any markedly increased buying activity. In this connection it is pointed out that in Bradford extensive sales of tops for delivery two or three months forward are frequently made at prices some pence below ruling figures. Top-makers effect these transactions when they feel reasonably confident that the raw material will cheapen, and so enable them to make a profit on the business. Evidently the English topmaker sees little possibility of procuring the staple at appreciably lower prices this season, for sales of that nature have been very limited since this season’s wool auctions got well under way. Authorities have gone to the trouble to warn those speculatively inclined of the financial danger in making such sales with wool markets everywhere showing signs of decided strength. Apparently, therefore, the bulk of those connected with the British industry now have the conviction that the advanced prices so far ruling this season are based on a sound foundation.

Up to the end of October Germany, Japan and Italy had bought in Australia in very much larger quantities than hist year, still France was substantially the biggest buyer. But, strangely enough, it is assumed that a big percentage of French purchases is destined for German}', whose own buyers have also, as already stated, been operating largely. At the same, time, there seem to be some doubts as to German compctiticsi, whether dirc-.l or in-

direct, being maintained on the levels that have so far held. There, too, there has been some difficulty with regard to the wages scale, which is, of course, very much lower than the British. Whether this trouble has been satisfactorily disposed of we have not as yet had any definite news. .Beyond this is a hint that German finance, generally, though quite sound, is not just as easy as it has been. Our cable' messages of the last week or two have intimated that the German Government is concerned at the extravagant spending that has been going on, mostly the result of big borrowings from America, and is contemplating steps designed to check it. As for America itself, though consumption of wool in the United States mills for the eight months ended August was 315,600,0001 b., or 15 per cent, more than for the same months in 1926, this season’s advanced prices are not relished by American millmen, and their purchases in Australia have up till now just about equalled last year’s for the same period. Cautious buying of the staple has also characterised their operations in Boston and Philadelphia. In the States manufacturers hold the view that higher raw material values must be followed by increased prices for fabrics, and the consuming public offer a strong resistance to any advanceDespite that fact, the “Textile World Analyst” expressed the opinion at mid-October that values for wool were likely to advance a little further. For a long period the parity of wool prices in the States, allowing for the very heavy import duty, has been under the world level of rates. The authority above considered that the limited stocks of raw material held would correct that discrepancy. Where possible millmen were using the domestic grown staple, which was cheaper than the imported commodity ; but stocks of the former were lessening, and lack of them was likely to drive consumers to the foreign-grown staple. The foregoing is intended to give only some of the many factors in the case that have to be taken into account; when attempting to assess the outlook for the remainder of the season. While probably not lending very great assistance to that end for the average reader, it is still quite sufficient to let him understand some of the uncertainties that cloud the markets.