WELLINGTON NEWS

Hokitika Guardian, 9 November 1928, Page 5

WELLINGTON NEWS

NEW WOOL SEASON

[Special To The Guardian.]

WELLINGTON, Nov. 7

The wool-selling season of 1928-29 begins at Wellington on Friday of next week or two days after the general election has been decided, which is fortunate, for that disturbing factor will be out of the way. Already we have had forecasts of market probabilities and the general belief is that values compared with the closing sales of March last will show a decline and of that there is little doubt for we had many indications of price recession both in London and Sydney. While there is general agreement that a fall is inevitable, there are many seers and wise men actually forecasting the probable amount of tlie fall. Some say that the drop will amount to at least 2d per Hi, others think it will be more, while some think it will he as much as £5 per bale.

It is useless attaching much or any importance to those expressed opinions for the wool market is a most elusive market and values fluctuate rather violently, and this can be illustrated by the sales held in New Zealand in past seasons. In the season of 1922-23 the average price realised for all descriptions of wool sold in the Dominion was 10.85 pence per lb; in the following season the average price was 15.249 pence per lb, an increase of 50 per cent over the previous season, and in the season 192425 there was another substantial rise for the average price was 20.212 pence pel - lb or nearly 100 per cent more than was realised in the season ot 1922-23. In the season 1925-26 there was a sharp fall in values the average being 11.936 pence, or Bld less than the immediately preceding season. In 1926-27 there was a slight improvement to 12.706 pence, and in tin l past season 1927-28 there was a further increase to 16.89 pence, so that 4ld of the decline of Bfd registered in 1925-26 was recovered. In the face of those facts who can forecast the probable average price of the season with any degree of certainty. Purchasing power and fashion are the main factors controlling the market and these are beyond the powers of any individual to forecast. Some more satisfactory results would be available if those interested in the trade pooled their information and issued a considered forecast. Such a forecast may not be entirely correct, but at all events it could be nearer the truth than the haphazard forecasts of individuals who are apt to be exaggerated in their forecasts when conditions are promising and dismally pessimistic when adverse conditions are apparent.

Holding the first sale in mid-Novem-ber seems to be rather early for the offering is never very large. At the November sale in Wellington last year 9083 bales were offering and 9044 were sold, the average price being 15.639 pence per lb. and £23 2s 2d per bale. It is very probable that the quantity to be offered next week will not amount to 9000 bales, for shearing has been greatly retarded by adverse weather conditions.

Tl7e winter was mild and the sheep must have wintered rather well, but last month was very wet and this will be reflected in the condition of. the wool which should be light in grease. This, of course, will make no actual difference to the probable price for the buyer estimates the value on the clean content of the wool. The clip will probably l>e lighter weight and this fact must be kept in mind. Because of the lighter condition as compared with last year’s clip, the drop in price, therefore. relatively will not appear so pronounced as anticipated, or at least it should not.

At the November sale last year prices were expected to advance, but ns one firm reported, few anticipated that the rise would be as substantial as that which occurred. Last season, throughout the Dominion 523.108 bales were offered and 517,628 bales were sold averaging £24 4s lid per bale, the total realised being £12.551.829.

If. supposing the average for the current season is no more than £2O per bale, the increase in the clip is calculated to make up the difference, so that if the worst is to he anticipated, the total realised this season should not lie less than twelve and a-half millions sterling and the whole of this amount will be distributed in the Dominion between December Ist. and April 15th. next. The first of the wool cheques will he distributed by the Wellington brokers in November. The steady flow of funds during the next six months should have a stimulating effect on general trade, but whether it will have any beneficial effect on unemployment is an open question, for enterprise is lacking.