HIGH WOOL PRICES

Hokitika Guardian, 27 February 1925, Page 1

HIGH WOOL PRICES

DUE TO PANIC

WELLINGTON. February 21. Ail interesting explanation of the peak prices that have been paid lor wool this season, particularly at the initial sales, was advanced by an overseas buyer who attended the Wellington wool sale yesterday, in the course of an interview with a “Times” reporter. “ The peak prices about which everybody were talking were due to sheer panic.-,” lie said. “ Everybody began talking about a eoniing wool shortage,” he added. ‘■Then 8.A.W.8.A. liegan to gradually dispose of accumulated stocks, and this gave rise to the belief that a big shortage was imminent. It was a strange t.ong that during the three years 8.A.W.8.A. was clearing the accumulated wool, the seasonal stocks were also being used, and the position arose that more wool was being used than was actually being produced. That frightened everybody, and buyers started in to secure what they could. It was reallv panic that forced wool un to such a high figure. “ Of course many other factors entered into the question. For example, during the war woollen mills were turning out khaki for the great armies that had been mobilised, and as regards the French mills, they were iik::-:II.v put out of action during that period. During the war years an enormous proportion ot the world’s population was wearing khaki, and there were not the ordinary clothes being worn as in peace time. Then, alter the war, people could not alford to pay for woollen garments. This position, however, is changing with the return to normal conditions, and another point that must he borne in mind is that countries like Japan and China are rapidly acquiring the wool-wear-ing habit, and tins has created a big additional demand as compared with hitherto normal requirements. “THEBE IS NO WOOL SHORT-

It is. in inv opinion, absurd to say that there is a wool shortage, and it was the ‘ eoniing shortage cry’ that caused the panic and forced prices up to such a height. “Prices will have to come hack to sound economic levels, as is not to be expected that any manufacturer will pay a price lor the raw material which will return him a loss when Inputs the manufactured article on the market. We are now witnessing a gradual restoration to stable prices, and this means, not that wool is in less demand, but that we are merely recovering from the previous panic. " I could quote you eases where at recent sales inferior wools were costing more clean-scoured than wool of liner quality, and at the Napier sale ioar.se wool was fetching more proportionately than the liner sorts. AN ENTERTAIN BUSINESS. Wool-buying is an uncertain business, and it is useless trying to forecast a sale before it eventuates. You can never really tell how prices v. ill go, hut one thing I can say with reference to the recent peak prices, and that is that a good deal of speculation was going on. and this till helped to keep up values on a plane ol economic, unsowudness. “In my opinion prices must come down, and they will have to do so il stable and sale conditions in the woollen industry ale to prevail. LAST-MINUTE WITHDRAWALS.

Speaking generally, our inlorinanfc expressed his dislike for the practice of some growers in withdrawing lots when catalogued.

"T recognise." he said, "that- there are at limes good reasons for withdrawal. but buyers do not like to see wool withdrawn from sale.

•> Generally speaking, when lots are withdrawn at the last minute we are inclined to suspect that the owner is speculating.”