WELLINGTON NEWS

Hokitika Guardian, 27 February 1929, Page 2

WELLINGTON NEWS

THE FALL IN WOOL PRICES

[Special To The Guardian ]

WELLINGTON, February 25

'.me instability off commodity values is one of the disconcerting and troubling problems of the day, and wool values is a ease in point. In the season of 1927-28 the market opened with prices at a low point and at the second sale held in December, 1927, there was a further drop at the sales held in January, February March last year, and values were at their best at the closing sale in March, 1928. Before the current wool season opened in November last year it was made abundantly clear that there would be a fall in prices and the general opinion was that values would be on a level with those ruling in December, 1927, when prices were at their lowest. Prices did drop but not as low as anticipated and for the sales held in November, December, and January this season prices remained fairly steady and as a matter of fact the average for the three sales was just on a parity with the corresponding three sales of the previous season. This at all events is what statistics for the Wellington sales disclose. Last season the average price per bale for the three sales works out at £23 10s, and for the corresponding three sales for this season the average is £23 10s 33d, or 3j}d per bale more than last season. Growers and brokers were animated by renewed confidence and there was a general expectation that prices would be maintained throughout the season. February sales have shattered all hopes and those held this month exhibit a decline of 2d to 2‘jd per lb on the January sales. With this break the .average price for the season will show a distinct decline on the average of the past season.

Comparing the prices realised at the February sale at Wellington with those secured at the corresponding sale last year prices have declined by many pence. Merino wool is lower by 7Jd per lb, fine halfbreds by od, medium halfbreds by 53d, extra fine crossbreds 48-50’s by 4jd, fine crossbreds by 4d, medium crossbreds by 3d, coarse crossbreds by 2d and low crossbreds by 23d. This is not very cheering for it will have other effects, for one thing the prices for sheep and lambs which have lately been tending to run high, must be now adjusted to the new circumstances. The prime cause of the fall in wool prices appears to be the rise in the bank rate, at all events that has been the last straw in the Weight breaking the market. In their annual report for 1928, Messrs Sehwartze, Buchanan and 00., London, woolbrokers, state that -the past year had been a disappointing one for the wool trade. Early in the year there was an improvement in trade both in England and on the Continent and under this stimulus coupled with the prospect of a shortage in the Australian clip prices had appreciated during the latter months of 1927. A strong buying movement developed last year, which collapsed when it was found that the shortage in Australia had been grossly exaggerated. The net result was that the trade as a. whole was poorer at the end of the year, dealers and topmakers being the greatest sufferers. Germany was the most consistent supporter of the market. France operated less freely than in 1927, particularly in the second half of the year and England bought less than her normal quantity. America is evidently using less wool than she did some years ago and with the increased production in that country has less need for foreign wool. The firm states that there is no doubt that the consumption of artificial silk has affected the price of wool. This article has been greatly improved, and already many of the objections to it have been eliminated. In some cases it has replaced wool and other textiles, and to-day a much larger proportion of it than formerly is being used as a cheap admixture with wool. Consequently if wool is to hold its own in the future it is essential that the cost off production should not he further increased by awards of the Arbitration Court in Australia, and that the cost of conversion at the manufacturing end be reduced. Trade generally, it is said, is far from satisfactory both in England .and on the Continent, but the price of wool appears to have reached a level more in accordance with the value off the manufactured article and the fact that the industry seems to live recovered from the wave of pessimism which overtook it in September last would lead one to hope that values will be maintained somewhere near their present basis. It can now be said that that hope has been destroyed by the advent of dear money. ______