THE WOOL SLUMP

Hokitika Guardian, 15 October 1920, Page 1

THE WOOL SLUMP

1 n-r'-' STATEMENT BY MASSEY. (Per Press Association.) WELLINjGTQN, October If Mr Massey tpl'd the Rouse to-day that lie had received p very important cablegram from the High Commissioner relating to the wool situation. Messrs ’Runt and Wilson had been appointed to inquire on behalf of New Zealanf » n 4 had made a report, which W«fs being forwarded by mail. Its chief {joints were ns follows: ■ yhe Imperial Government stocks of Australian wop) on June 30th. amounted to 2,049,477"ba1e5, and of New Zealand wool to 856,337 bales. This roughly was eighteen months production of wool. This was about 1,650,000 bales in excess of t}ie noma) stocks. South America, "and South African stocks brought the excess up tg rough' ly 2,000,000 bales. Since The arniistice, the world’s consumption of wool, ho said, has not equalled production, so that the surplus stocks are not beipg reduced. The high prices have forced ecopoiny op the cjvil populations, while the purchasing power of Europe is enorniously reducedThe current Australian clip is expected to he reduced by 400,000 through drought, but the most that can he hoped for in the ijnmediatc future is- that consumption will overtake production. HOLDING WQQL RACK. The surplus two million hales must i therefore bo held for a considerable time, and can only go into consumption gradually. The problem is to i ensure its being held in spell 'a way as 1 to minimise as far as possible its detrimental effect on the market. The problem, said Mr Massey is made more 4if- ( ficult for New Zealand by the fact that only eleven per cent of its stocks are ■ fine wools, for which there is most demand. . ( The Committee believed that prices of crossbied wools must go sooner or later to normal. .Wool is an imperishable commodity, and should be one of the safest things to hold. 0 Tlic Australian Committee is endear vouring to assist the position by spreading the wools of the current Austra- . linn clip over a period of twelve V months by limiting the amounts offered at auctions. _ , r The New Zealand Committee considers that similar control in the case of New Zealand wool can only be carried out by the Government, and which j it does not recommend; firstly, because while Australia is dominant in fin e wool, New -Zealand is not dominant in cross-bred, and if the dominion with- j, held its clip, the result would he to j give the market to other cross-bred pro- t ducing countries; and secondly, the j, cross-bred clip is already spread over twelve months, .as approximately ha]f ; the total is produced in eaefi hemisphere. ' The Committe9 considers that any attempt at interference would result in more harm than good. 1 The Committee added that as all c wool in stock cannot go ..into oonsump- 1 tion in the immediate future at any price, somebody must hold portion. New Zealand should ask the Imperial Government to undertake not to force its stocks on the market, but to hold firmly and sell only in such quantities as can be absorbed, without seriously depressing market or lowering prices. This could steady the position and restore confidence through the whole industry. Hie Committee suggests that growers able to do so should hold crosshired wool.) Someone must hold the wool, and it is bettor for the financial ly strong growers to dp so than for speculators to stop in. Hie Committee (considers that the position should be made known to New Zealand growers. It urges farmers to hold their wool as long as possible. New Zealand growers could also assist market with profit to themselves by increasing the ewe flocks wherever the country is suitable, so providing for an increase of meat, particularly lamb, for which the hutlook is very good. There is no difficulty about tonnage jor moving wool, hut thero are advantages about holding the wool in the Dominion. Accommodation in London is overtaxed, and the growers should • send wool there only if they mean to meet the market and take what they " c an get within a reasonable time of its arrival. k- LONDON, ,October 13. JB Ai Hull wool sales th c brokers arc 56 indisposed to sell under the last Lon--28 don rates, as being too low. Conseqnently much of the wool offered was withdrawn. The best merinos sold well.