WELLINGTON NEWS

Hokitika Guardian, 12 June 1925, Page 4

WELLINGTON NEWS

STABILISING THE WOOL .MARKET

(Special to “GuardPn”.)

WELLINGTON, June 10

Tin.' word •• stabilising ” as now used Inis quite a different meaning to producers to that given in the standard dictionaries. Now to stabilise a ntaikot means to force tin the priic hy control, restriction nr hy any other means, /uni this ysteni of stabilising appears to lie one of the aftermaths ol the war. Ike latc.-t proposal, which emanates from Australia, is to stabilise the wool market, and therelpru is to he hased on the "Bawra” system, and Sir .John Higgins, who is the Australian eh airman of the Board, is to have the handling of the scheme. The British Wool Realisation Association was entrusted with the revaluation of tut enormous quantity of war-time purchased wool and with other wools, and the system adopted was to limit the quantity off..red tit each sale and iix reserves. The conditions existing in January, |eol, when Bawra came into exist-

;.|| ( ;<. wore very different to what they ire now. There was an enonnou-. qttnnirv of woo I with only Bradford, the t•,,it j States and Japan as immediate ■ oiisllmors, ihe t ontineiital nulls vet- 1 ■ areely ready to resume operations lor in Belgium and I* ranee, the Genual)., destroyed all woollen machinery. The demand for wool, at first moderate, „oon gained strength as new machinery was provided and Bawra stocks which were expected to take a number of -.ears to liquidate, some estimated the time as (1 years were cleared in about .1 veins. The last hale of Bawra woo! was sold twelve months ago. While this large stock was being marketed fashion ran very strongly on line wool fabric with the result that there was exceptionally heavy demand for merino, and prices lor this class advanced and (Oiitiuued to do so until manufacturer:) discovered that the., wore unable in obtain for the finished articles prices commensurate with those paid for Lite raw material. Cloth merchants were dem.u tiding eheapci goods and hhe 'manufacturers hrst turned to crossbred wool as being the cheaper staple mid evolved some excellent fabrics at very reasonable prices. ■ tut crossbreds began to soar and still the cry was for cheaper fabrics. I hen dime afti(i* ini silk to aid the nmnnlae(tirer. 'l he conminni ion ol wool eon- : ratted and prices began to lull, and have kepi on doing so until now il scents that the swing of the pendulum has been carried 100 far. lhe market, however, will soon right itsel! il allowed to lake it' course, but the Australian graziers seem to think that the application of the Bawra system u ill bring the market hack, lhe condition-. in the tre.de to-day are very diifvrent to what they were. Germany is not now trading mi an inflated cur-

renev, hut is working under the luiuePlan and she now lias to pay -Os in the C. and it Im- to he Imnest payment. Germany is having her financial troubles and the .Slinnos collapse i- Imt an indication cl the position. H is perhaps not known that there were several occasions during the past wool season when snre.e f'ontiueut.nl buyers were not able to pay up en prompt day hut managed to do so on the day following. Kina nee was a real dilliculty and still is. In Franco there is at the moment a financial crisis with the exchange at 1 (l-J francs to the L\ instead of 2o trams which is parity. 1 rude in Yorkshire is had; it is also had in I’rnuce, Germa:iv and Belgium. Iho f oiled States lots bought very little wool for months and tin 1 woellen trade both in Australia and New Zealand is far from being in a healthy condition. Buyers during the ea- on just ended have suffered trenc.-m! m- 10.-.- es : therewere a million hides to < arrv over to m added to a clip that is going to show a cun-iderahle expan-ion. There are

three factors lo he lo.nl in mind when considering the market prospects. ■| he, 1 ate : 111 stringency in the nn ney mat ket ; re -tricteil purchasing p over i f consumers ; and (J) the im r- <1 weight of wool available this year as compared with l!i:M-n. Can any erga ii'.ation that Australia can set up overcome 11 ■- ■ enmlitions. Au-'traiia can lestri.t li e offering* a- she is deing now Imt that will met force the luivers to paimue for wool, if is mere likely j.., | il i mn1.. 1 a ranter use m : iih.l il ut os. 11 is im; u-m----hility for any urea ni-ation or i oai'.l ol ce:it ml to seen',' fur wool or any other ci nl iitmnJ if y prii es above economical values, and this, is fixed by the law of supply and demand. In the rubber industry, rest riel ion ha s proved successful, but it was a restriction of output and not ol ollcring. I In* Bril ish-owli-ed e-!ute.. in the Eu-t agreed to redm ' th ur oiitnuts by oti per lent., and with Lhe new sty le of lyre know n as hall oil ami the more general tt.se <»i motor vehicles has caused the demand lor rubber to exceed the supply, consequently Hi, market has firmed. 'I he Australian graziers are Lo hold a special meeting Ot June L'J lo consider u scheme to 1, - submitted by Sir J. Higgins and New Zealand is invited to rend representatives. It was considered unwise for New Zealand to link up with Bawra in 1021 and the same opinion is likely to hold good now. Crossbred wool, though cun-ideraldy lower than in November last, is still making good prices, and sooner or later growers will realise this and turn their wool into cash.