WELLINGTON NEWS

Hokitika Guardian, 12 May 1925, Page 4

WELLINGTON NEWS

THE SLUMP IX WOOL. (Special to “Guardi !*Jt”.) WELLINGTON.. .May 8. The London wool sales which opened on Tuesday last leave no room for doiiht ns to the slump in wool. All rmsi-bred sorts are (id per lb. lower than at the .Mareh sales. This coming upon previous declines makes the position a very serious one. During l!)l’t we exported about. 560,()(K) bales, and the export value was assessed at £15.(.(1d.UK). the tall in values since Do: ember has been much more than (id. hut assuming that it is not any

more this means writing oil at least hale or approximately four and a halt millions sterling, a loss that wo cannot all'ord. It is perhaps not correct to icier to it as a loss, hut it means that the next flip will realise so much less and the effects must ho l a r-i e.tehi ug. 1 lie .sheep larmer.s will hale less to spend, there will be less lor income tax and so tbe clients will

penetrate to every strata ol society. The serious drop in wool will also ailed t|m price ol sheep and lambs, so that it is not a very pleasant prospect. Opinions are at variance as to, the immediate tuture. Ibe Atu-ualian wool brokers evidently think that the wool market will recover later on aim have therefore abandoned the sales intended to lie held this month, tonic Wellington wool brokers do not entertain any .such optumi-tie opinion. The Australian growers and others im n., itmilit bn.-iny; their views oil the statistics which have been from line to time published by Sir Arthur Goldfinch, the well-known authority, but statistics have no value against the limited purchasing power of the masses. When it cornea to statistics and finance the latter must win. It is of little use saying, that wool is worth so much when these who ought to buy the wool and who want it are unable to pay the price. Wlmt has happened in the wool trade in the f ast few months is that a struggle has been going on between those who pinned their’ faith to the statistical position as a guide hut they smut discovered that the' consumers could not pay the high prices demanded, and won! was regarded as a luxury. Artificial silk, or '‘rayon", as it is now known, is being extensively used and will take a lot of killing. .Manufactured and partly manufactured goods began to accumulate, and clothinnkers bought spr.ringlv of yarns, spinners did the same in rdsPert to tins, and now it |n, s inine hack to the combers who have struck against the lngh prices for the raw material. THE wool PROSPECTS. What are the pros] eels for wool. A good many think that there will he a roeoverv in September, and wool is being held for the London September sales. One wool broker sums up the position as follows: A fair amount ol semiring wool bought in New Zealand is yet to go Home, the meat companies slice and other wools is vet to 1 e shipped; and ot the dillerotui between wool oliered and wool sold in the New Zealand auctions during the past season some -10.Ot>0 bales remain ill u w uers’ hands. Ibis too has to he disposed of: so will a fair amount ol Heeee wool in .small lots that ordinarily come into the sale ot erutelmgs in .(line, and .Inly. If the market is not hotter than it is now then a lot of the wool will he held over, or shipped to Loudon for sale. With what result? Well, just think of the accumulations of wool unsold arising from (1) the folding hack of the Australian clip: (•_>) the withdrawals from the London May sales: (:?) the wool now withheld from sale in Australia and .x.Z. : the existence of the unsold, unshipped scoured and siife wool still in N.Z. The current London sales will not last n week if the market docs not show solu" IV dvciv. for the withdrawal'"ill be extremely heavy. I Id- carry. fee • r will go into (he July -ale-, and a- ihi* Eurnncan and North American dips will then he available I here will he little hope of values improving, and there is certain to he a heavy carry-over from the July to the Sept. London sales. By September a fair amount of the new Australian clip will be in store, and the N'.Z. clip will !;■ in sight. Australia has had a remarkably fine season, and it is anticipated that with the increase in the llueks the clip will turn out JC.0.600 hale; more than in the past season, and the N.Z. elin is expected to show an increase of 6(1.0dd bales. Increases may also'lie expected from other pis dining countries. We have thus accumulations of old wool and an increase in the new clips, hut there is no prospect of the | til-basing pater ot eon imieijs being any better. Thor, i- nothing to encourage the belief that.

(onsumer.- are able to pay fancy prices for wool fabrics. The trade has .suffered from mi nverdrse of optimism, and it is probably that it will Mill'd from an overdose of pessimism before the right balance is struck. Just at wluit point prices will show stability it is difficult- to say hut that point must soon he reached for the- grea: textile industry cannot he hung up indefinitely.