WELLINGTON NEWS

Hokitika Guardian, 21 February 1930, Page 2

WELLINGTON NEWS

THE WOOL TANGLE.

(Special Correspondent.)

WELLINGTON, Feb. 19

The wool position is in very much of a tangle it is difficult to see how it will unravel. Owing to the almost disastrous drop in values many growers are holding their wool off the market and they have a perfect right to do so, for they are dealing with their own* property. But this is n?t all there is to it; because' wool is being held back the catalogues at the scheduled sales are exceedingly small. Tims the Wellington sale was scheduled to begin at 7.30 p.m. on Wednesday, but owing to the smallness of the catalogue the sale has been postponed to 2.30 p.m. on the following day. ’ For this sale Wellington was allotted 27,000 bales by the Wool Committee but brokers find that the actual quantity to be offered for sale will not exceed 14,000 bales and the position is likely to be similar at other selling centres. The New Zealand Woolbrokers Association cabled to the British Wool . Federation requesting consent to an extension of sales. The"' Federation apparently agreed to tlie, holding of three or four additional sales which would extend the selling season to about the middle of April. The New. Zealand Association desired to have the sales extended into May but to this the British Wool Federation refused to consent, The New Zealand Association has evidently again cabled to the Wool Federation pointing out that brokers’ catalogues were only about SO per cent of tlje quantity usually offering at this period and urging an extension of the sales.-'The British Wool Federation has again flatly refused its consent to the sale being extended beyond April 16 and insisting that not less than 20,000. bales be offered per sale. The wool buyers may receive instructions not to buy unless the total offering is at-least 20,000 bales. The wool buyers are within their eights in refusing to bid under pertain circumstances. The overseas buyers come a long distance at great expense and they have by their presence and increasing numbers to establish a magnificent wool market code. That prices are depressed is no fault of theirs, for it has been caused by world economic conditions, The producers have their fights and so have ,the buyers. The growers cannot he expected to accept t)ie present low prices if they believe that by holding their clips, for a time the market will improve, at the -same time the buyers cannot be expected to hang about dancing attendance on the growers and awaiting their pleasure. The position is rather in a tangle and the immediate future is rather obscure. The “Wool Record and Textile World” published -at -Bradford in its issue of December 19th last stated the position very clearly. Before that date the New Zealand Woolbrokers’ Association asked for the views of the ’British Wool Federation as to exten. sion of sales and the latter approved the extension of the selling roster. The trade journal quote says: “In the trade generally opinion seems to be divided. There are many who. assert that the decision to ourtail offerings in Australia was fundamentally wrong, whil.e others contend that it would be disastrous to force on to the market supplies in excess of actual requirements. Those who oppose the limitation of offerings argue that the only" way to find a real basis is to allow the law of supply and demand to operate, and in a broad sense this is undoubtedly correct. Demand cannot bo regulated; it exists or it is non-existant. Supplies, on the other hand, can be regulated and it is fallacious to assume that any departure from the normal marketing of the clip is unsound. The selling season in all countries has been evolved to meet normal conditions and .there is no economic reason why the system should not he modified in accordance with abnormal or subnormal conditions. If for instance stocks in the hands of users were inadequate to meet a sudden spurt of activity in the consuming centres, buyers might reasonably ask for increasing offerings; similarly, if the buying capacity of the trade is not equal to the amount of wool available, the sellers would appear to, have a reasonable claim to exercise control over the offerings, If the sellers think that they are not getting an economic price for their produce they are entilted to refuse to sell, for it must, he assumed that as business men jthey will not impose an inflated reserve value. We express no opinion as to whether the growers are wise in attempting to stop the decline in values by .curtailing, offerings, but we do emphasise the fact that' the selling season is not an economic law but a custom. It is manifest both in Australia and New Zealand the growers at the opening of the season were prepared to meet the market up to a point. Events may prove that they are entirely wrong in curtailing supplies, but that is a risk they are willing to take. In the meantime they are financing the wool, and if consumption does not increase in the near future it will be an expensive business. The whole tiling is in the nature of a gamble, and if it does not come off the growers stand to lose most.”