WELLINGTON NEWS

Hokitika Guardian, 13 June 1930, Page 5

WELLINGTON NEWS

THE WOOL POSITION,

(Special Correspondent.)

WELLINGTON, Juno 12. Wool in sympathy until practically all other commodities has declined in values, but there are reasons for belieing that wool values were depressed to an extent, that was scarcely warranted. 'The chief, cause of the decline was the inability of Bradford 'manufacturers to compete in world’s markets owing to excessive costs of production. For a long time employers had lieen endeavouring to reduce costs and the workers were asked to accept a reduction in wages which was refused.

Then Lord MacMillan was appointed: to inquire into the wages problem, and alter an exhaustive /examination of the position he recommended a reduction in the wages scale equal to a'oout 9 per cent’ The workers refused to accept this and a tense situation was created, so tense that prayers were offered in the churches for industrial peace. The workers in some localities hare regained sanity and have accepted the reduction. This labour trouble wfe /mly one phase of : the question, y - yf , The.. Stock. Market- collapse in New Voi-k, which, wat oh a large re* dufecl' tiie .hrice level of commodities .look back it will he! found that, it- whs during the last quarter of 19.29! aud tho. first quarter of this year 'that the-heaviest decline-occur-red. Wool was badly hit, how badly cannot be realised unless one sthdies thefcbufse faf prices over a long period. The best guide is the top -market thut. being the first process through which, greasy wool is put. At the beginning of- Nevember last year 50’s tops were quoted at 23d per lb, by the beginning of January the price dropped to 21d and by the end of March it had receded to 17d, a - drop of 6d in. the short space of five months; 46’s and 40’s showed the same, movement. The progressive drop in values scared the buyers, for it was shown to be a risky venture to buy the raw material; The whole trade on the manufacturing side lost confidence and the policy pursued was that of buying, from hand to mouth. The progressive drop . lit values meant heavy losses to the growers .and it is not surprising that many wool men refused to accept the ruling rates and preferred to hold over their dips and events appear to justify their action, at all events the market shows steady improvement. The recoverv in the wool market set in towards the end of March and lias been steady ever since. Reverting to the question of Bradford tops, at the end of March the, quotation for 50’s, tops was 17.4 and at the beginning 6% this month the price was 18-1,4. This advance has happened .notwithstanding the general dullness of trade and the abnormal unemployment in Eftrope iind ; America, and. this forces [upon one the conclusion that there is an inherent strength in wool, , It is to (be hoped that it -is. so. A very considerable' quantity' of ' wool was arrested from sale during the past season and according to a compilation -by, : .the ..Zealand, ,W,.eb growers’ Association the quantity of wool held over is 140,718 bales which is verv nearly 25 per cent of the to tal wool production of the Dominion. Of the total 82,362 bales, or .well over 50 per cent, are held in the Wellington. Napier and Wanganui wool d'.stricts. In passing it may.be pointed out that this held over. woof,has made a big difference to the-export figures of the country, for if we take the value of the bales at the low figure of £lO per bale the total represents £1,400,000, and if that had been exported it would have helped to,; ease the exchange position. y However, it is desirable tlmfythe bulk, if not the whole of the left , over wool should , pass out .of the hands of growers before the next season opens, and to facilitate this the wool brokers have arranged. for % series of ten winter sales begintaing with ft sole at- Wellington on Wednesday,/ June j 17, when 2500 bales of fleece.-.wool wdl be offered as well as about 1500 bales of crutchings. The quantity is ,small, but then it is not likely that adhere will be many buyers about. . Wool is in demand and it is alleged that some wool . speculators have been scouring the country trying to nick ud odd lots of the staple. There is no doubt that the wool poHittpn hn? undergone a favourable clumgb un growers must not expect Ijo mudi. Those who have bought wool during the past twelve months have hsl. hoavilv, and it is not unreasonable on their part to endeavour to recover some part of that loss now-that t-.iUc shows some signs of Improving. It n very satisfactory that Bradford has succeeded in reducing costs of . production for Bradfard is the mainstay of the wool market. , . ,