WELLINGTON NEWS

Hokitika Guardian, 18 November 1929, Page 2

WELLINGTON NEWS

THE WOOL MARKET.

(Special Correspondent )

WELLINGTON, Nov. 15

The opening wool sale of the season held in Wellington on Thursday definitely established the fact that wool values are apparently lower than they were last year, and that of course has not been unexpected. Growers must accept the position which after all is not so very depressing. There is undoubtedly a- more bouyn.nt tone about -the market and that augurs well for the future. Although foreign countries furnish the healthy competition which makes for improvement in values the market is largely dependent upon Bradford to lift the greater weight of wool.

It is sometimes said that the cost of wool has little influence on tin- price of finished clothing, because it is so small a proportion of the cost of the finished article. In the ‘‘Australian Quarterly” for September Mr R. C. Wilson, in an article entitled “Selling Australia’s Wool,” indicates that the price of wool does not matter to an important section of the trade—-the-top-maker. Were all the processes of manufacture from the wool delivered in bales to the, rolls of worsted carried o,ut in the one establishment, the wool would seem ,o£ little value in comparison with the c,.os.t of;.the, finished product. , But when we realise that the first process, the turning of the wool into tops, is to one section of the trade the work from; which alone it obtains, profits, if the price of wool is half the price of the finished article the tops then the price of wool is a serious consideration to that section. Most of the world’s wool comes from the Southern Hemisphere. It is shorn from the sheep in all these countries at about the same time of the year. It therefore comes all om the market at the same time of the year. The hulk of it is sold between November and February, though the Australian selling season is slightly longer, lasting from September to March. \ All the wool, amounting to millions of pounds worth, has. to be bought and paid for dnfing these mnoths. It has then to be held and fed to the marjeet through the remainder of the vetir. From 1 this it will he seen that the state of the money' market has a considerable bearing on prices,' for when, money is dear it adds to the cost of the staple, and buyers are obliged to ciirtail their commitments. The wool clip of New Zealand ii‘sold between November and March, and wool buyers have to provide finance'to cover twelve or thirteen million pounds, and if in the meanwhile prices decline the buyers incur loss.

In defence of Bradford topmakers a correspondent of a Sydney paper pointed out that during the last three years the majority of Bradford topmakers have- 1 sustained serious losses, which are almost entirely due to the fall in the price of the taw material, Many have still large stocks, bought 1 during the 1928-29 season, and on them at present prices they are faced with an average loss of £8 per bale. Yet it is stated that Bradford is “bearing the prices—that is, endeavouring to force prices still lower than they are at present.

If a survey is made of the operations of all the countries which have operated in the Australian markets since the war it will he found that the most constant supporter of all types of wool has been Bradford. On the whole the Engish buying is not spectacular, but is nevertheless of untold value to the grower of ordinary types of wool. The Bradford topmaker has almost invariably a limit in the market. And Yorkshire, too, can pay and does pay very |Eigh prices for certain classes of wool, y Il< iis perhaps conveniently forgotten that a Bradford spinner in IP2I paid 53id perAb for wool in Geelong, and this,, is the highest price that greasy wool has evqr realised in Australia.,,

The position on the Continent and in America is in some ways even worse than it is in Bradford. The truth is that low prices do not give any section an advantage over the other.- The relative positions of each section of the wool trade in the world are almost completely unaffected bv the level of prices paid for the raw material at any particular period. It is sufficient to state that Bradford topmakers stand to lose heavily if there is no improvement in values. To radically alter an economic and trade system which has been in operation for years without any consideration for anyone hut the Australian growers cannot he expected to be received with enthusiasm.' Sheepmen are-now only feeling circumstances similar to -those suffered by manufacturers, fo.r. a considerable period. Returns giving the percentage of hands in the German woollen textile industry fully employed offer evidences of the state of affairs in that direction. In 1927, 92- per cent of workers in the industry were fully employed. Dining 1928 only 77 per cent were so situated. pv May Inst the number was down to 99 per cent-, .hut had recovered to 76 per cent iiDJulv. That increase was due itoi revival in trade which subsequently fell off and resulted in somewhat curtailed German competition for the raw materia.