WELLINGTON NEWS

Hokitika Guardian, 18 December 1931, Page 2

WELLINGTON NEWS

•MARKETING WOOL. (Special Correspondent). ■WELLINGTON, December 16. ' Wool brokers contend that woo I growers would be studying their own interests if they marketed their clips in the Dominion, while the banks state that London affords the best market for wool. The banks and the woolbrokers see (the position from different angles, being 'influenced by their prospective interests. The banks prefer to see the wool shipped to London for sale there through the bank. The latter, of course, makes an advance on the wool consigned which bears interest, and this interest is part of the bank’s revenue or income. The grower g6ts the full benefit of the exchange, that is he

■ gets it direct. It is to the interest of i ithe woolbroker to have /the clips marketledlocally" for he thus . earns a comI mission. Bankers and brokers have their respective interests to serve, and so far as the grower is concerned he has to pay whether he consigns to Loudon or sells locally, it is therefore a matter for djimself to decide which course is the better for him to follow. If he decides on shipping his wool to London for sale he must face the usual transport charges to port- of shipment, dumping charges, etc., and then comes freight, warehouse charges in Loudon and corn--1 mission to the broker. He will probably have got an advance from his brokers and there will be interest to pay. Furthermore, he cannot get his return, even suppose the clip was ‘sold promptly in London, under say three, months. Very little Now Zealand lab'our is employed in this case much t<> the loss of the rocal labour market, and indirectly to the grower also.

The advantage of selling at Hie local sales which are now very highly organised, buyers and brokers after a lengthy experience have set up a code of rules for the main conduct, of the sales. The buyers attend the sales and have definite limits for the different grades of wool which they cannot exceed except at their own risk. The principals in fixing the limit of price take into consideration the relative matters,, such as exchange, costs of sh'pmeut, freights, etc. They dare not fix their limits below London parity, because the growers would not sell, and in that they would be supported by the brokers. There is a greater chance of better prices being obtained locally than in (London because of the wider representation of consuming ■ countries. We never bear of Japanese, Australian and Dominion woollen mills operating in ’London, but they do at the local sale; and they are .in addition to represents-

lives of Bradford, the Continent and America, such ■ representatives being present at both places. There is thus increased or wider competition at the local sales than at the London sales, and frequently local prices have been known to Dp above London parity. The grower has this further advantage, he can attend the local sale and see his. clip s6ld, and if sold he gets his wool cheque a fortnight after the sale, which is .a strong point. In addition to all this the grower by soiling locally is indirectly providing a great deal of work for casual labour in the Dominion, which at the present time is very desirable from an economic point of view. Whether the .wool is consigned to London or sold locally there are the handling charges, and it is a question whether the grower gets ally benefit from employing London labour. On the whole ,'the advantage to the •woolgrower is at the New Zealand end, and not at the London end. The A us

tralians discovered that long ago and the whole of the Australian clip, except a very insignificant quantity, is sold within the Commonwealth and the Australian woolgrower gets a, bigger cut out of the exchange than does the New 'Zealand grower. Because prices have been low at the sales aiVeady held in New Zealand, and there have been heavy withdrawals is no basis for discrediting local sales. The prices offered are up to London parity hut those prices are not acceptable to growers. It is admittedly very disappointing .to see such heavy withdrawals from the sales, but at the same time it seems to be the last thing to do. There is just probability that wool prices will advance next month and llic only reason I,fiat can he given in support is that tile. U.S.A. Congress may sanction a ten-year moratorium on war debts. That will have the effect of increasing Europe’s purchasing power.