WELLINGTON NEWS

Hokitika Guardian, 17 July 1928, Page 4

WELLINGTON NEWS

LONDON WOOL SALES

(Special to “ Guardian.”) WELLINGTON, July 13. On Tuesday, the 10th instant, the fourth of the series of London wool sales commenced in the Coleman Street Wool Exchange, and the reports indicate that there was a large attendance of buyers'representing Home and Continental concerns and that competition was keen, all sections operating freely. There was practically no change compared with the May series except that sliped lambs’ wool dropped Id to 1-Jd from the high prices reached at-the May sales. From the tone of the sales it is apparent that the wool market has reached some measure of stability and this is much to be preferred to contioned price fluctuations. There is at the moment a paucity of supplies which should cause a hardening tendency, but manufacturers are strongly opposed to any advance in the raw material. Commenting on the market immediately after the May sales the Bradford correspondent of the “ Financial Times ” stated that the most remarkable feature of the wool textile industry is that while the cost of raw material is again hardening the consumption is reduced because more machinery in both the spinning and the manufacturing depart* meats is stopped, for lack of orders. In the end the consumptive factor will decide the issue, for the value of wool will bo determined by the demand for it. There is no question about a cer-

tain quantity being required, but all the present, uncertainty is due to tbe doubt and difference of opinion concerning wiiat that quantity will be between now and the time when the wool of a new season will be coming on the market. The opinion of the wool importer is that the decreased supply of wool this season as compared with last will be sufficient to prevent prices falling below their present level if they do not advance later in the year. If holders of wool can have their way the textile wool industry will not get cheaper supplies of raw material in the near future. Spinners and manufacturers do not lose sight of two important facts—that the decrease in the Australian clip is not as great as it was atone time predicted, and that even the most sanguine estimates of the quantity of wool available will lie exceeded. It is also certain that the rate of woo! consumption is not being maintained at the rate expected by those who not so long ago were talking about machinery being idle for lack of wool and of famine prices before any of next season’s wool came to hand. These arc important circumstances on the side of users of wool, and will quite naturally determined their policy of buying supplies of material with which to run their machinery. Spinners and manufacturers at a time like the present do not think the prospects would justify them speculating if they were so inclined, hut they do not contemplate important speculative operations, because in many instances another serious reverse after the very trying period up to the end of last year and the unsatisfactory profits realised since then. Most of those engaged in the process of spinning and manufacturing are content to lot holders of the raw material carry the whole of the risk and tako the profit or loss as the ease may be, between now and say, next October. Firms with machinery consider they carry sufficient risk with their overhead charges, without relieving importers of dear wool, about the successful liquidation of which there is much doubt.

Messrs H. Dawson and Co., the well known London woolbrokers, say that the strength of the market lias been surprising to everybody and especially to those at the consuming end of the industry; it is more duo to the paucity of supplies than to any augmented demand. New business at the enhanced values has been impossible; moreover, the stagnation has been aggravated by the fact that existent contracts at much lower values are not being freely taken up. The struggle to gain even partial advances in yarn and clothes is becoming more critical. The firmness of the raw material against all the adverse conditions cannot fail to stiffen the attitude of manufacturers who are

now realising that it is hopeless to expect any easing of values in the present state of supplies.