WELLINGTON NEWS

Hokitika Guardian, 18 November 1927, Page 4

WELLINGTON NEWS

Till-; RISE IN WOOL. (Special to “ Guardian WELLINGTON.. Nov. 1(5. Tiie rise in the price of wool at the sale held in Wellington was so pronounced that many people are wondering whether we will have a repetition of the season of 1921-25. In that season the November sales turned out to lie the best, but when the prices paid were cabled to principals in If rad lord and lioston buyers had their limits reduced very promptly, and at each succeeding sale there was a steady decline in values; ami no one wishes to have a repetition of that experience. It must be remembered that the conditions now and two seasons ago are not the same. The buyers are operating under detailed instructions and they spent considerable time in the wool stores examining and re-examining the lots. The bids weie, therefore, deliberate and in accordance with instructions. Another factor is that there is a shortage of wool in the consuming centres not alone on the ( ontinent, but also at Bradford, and to some extent in the United States: as a matter of fact it has been repeatedly slated that users were never closer to the sheep’s back for supplies than they are now. The advance recorded in Wellington was mainly due to active Continental Inlying, line wools receiving the support of the Dominion woollen mills and the bright Koinucy Itooces drawing the competition of Australasian woollen mills and the t'nited States. Bradford hid freely, but the prices were about I’d per lb above Bradford’s ideas of values, ft is because the market did not receive the full support of Bradford that many people believe that the rise lacks stability. But it seems that Bradford must change its views and set about reducing production costs; in any ease it is obvious that Britain’s foreign trade is improving, and it is probable that the wool textile industry will share in this improvement. Viewed from all points it seems that wool values will recede, but the drop cannot be very much—at all events the entire clip of the Dominion will be marketed at an average of Id per lb more tlmr was obtained last year, and that slmul yield the woolgrowers an increased income of l'1.50k.1)00 to L'2.000,000.

The Bradford correspondent of the London " Economist ” writing immediately alter the close of the last Loudon sales when there was an all-round advance, remarked:—"The present basis of values has been established in spite of the avowed wishes of Yorkshire and Ereneli buyers, 'these have made no secret of their opinion that it would have been better if they bad been able to control their bidding as to pave (lie way for easier prices in the colonies. The state of trade in Bradford and Kouhaix is such thal it looks like asking for trouble later on to start importing wool at present prices, lmt German buyers do not anticipate that it will be possible to buy any cheaper in the near future, notwithstanding that they also would like to do so. Home trade spinners and manufacturers contend that the present cost of tops is too high. It is dillicult for spinners to hook yarn orders at cost price. That is the crux of the whole position among Homo trade spinners and manufacturers, and is the reason for the advocacy of cheaper wool in Australia and South Africa, which does not. however, alter the facts which need to lie faced. An immediate fall of say to It! per cent is put out of court by the regularity with which haying is maintained. As one section of buyers retires another comes in to cover present and prospective needs, and it is only wool held for really impossible limits that does not find a market. The probability of a fall would have been all the stronger if there Had been no shortage in the current Australian and South African c lips. Taking a broad view, wo do not think that supplies are any more than equal to present and prospective demands, but do not advocate the holding up of wool when it can be sold at anything like present prices."