INCREASED PRICES

Hokitika Guardian, 12 September 1932, Page 8

INCREASED PRICES

RELIEF IN AUSTRALIA

SYDNEY, September 1

There was a sigh of relief throughout Australia when the optimistio forecasts were realised at the opening of the wool-sales in Sydney this week. Tha advance of 20 per cent, on the closing rates of last June was moist welcome and there was further jubilation when it reported that the new rates were 5 to 1\ per cent.j above those which ruled at the opening sales last year.- Moreover, the market has since been very firm, and there has been a distinct hardening tendency. On 1 , the second day of the sales bidding wag even keener than on the first, and representatives of all nations took active part. The highest price paid was 16£d, the amount offeree! by a French buyer jn keen competition'with Bradford. On the open ing day the average prices secured was £lO 12s 3d a bale, iequa] to per lb. The average prices in the first week of the opening sales of last reason were £8 18s 3d a bale and 6-Jd per lb. Accepting the estimated advance o' per cent, as a, basis, the Australia, wool-grower will receive £33,816,000 for wool offered in Australia this season, as compared with £29,642,868 last season. Wool sent to London for realisation should increase tlie cheque to £37,197,600. If the present prices hold the Commonwealth clip for the cur-, rent year- should see a net increat of £5,063,049 in Australian currency. ,ln dications are. however .that the mar, ket will harden. Growers and brokers are displaying an optimism quite foreign, to them, and it is believed that further substantial increases wil mark the' progress of the safes.

Although wool-growers are gratified .at the advance in prices, they, are - hopeful that the gains' will continue, ; contending that unless they .do pro - duction must remain on a, non-paying i basis. Statistics compiled by the Grqzier’A Association show that an ! average minimum paying price approximates Is per lb, but tbdt leaver only a modest margin of profit-. , Return s' fvqm growers covering 5,000,00 r -beep, 40,000,000 of wool, and proeped,--■of -sales representing about £1,300,00'' fsliowpd ait average gross return to the .growers for the 1931 season oi 8.7 per, lb of wool. 'On that figure the greatest increase in the price of ’ greasy wool ..in comparison, with raters i whichruled ; at the plose of last season would make the. yield 10.44 d per lb. If at lea^ Tl ohe shilling per lb can be j bbtainedj. a? , .the, average yield, grow- ; at& estimate , that they will be able to clear all outgoings and obtain a ; moderate ppiargin of profit to themVselv.es. Anything less, it is said, would, leaye £ the .bujk of them, perilously .close to. actual loss. It is estimated that if h4s average is to be obtained wool which sold, on Tuesday at 16d • will have fto,.-bring at least 20d.

Discussing,,she latest price rise, at. the annual meeting of shareholders of ,thr big pastoral firm of Winchcombe, Carson, Ltd., the chairman (Mr Harold Bell) (said that prices could advance 50 T per cent, T and more without ibping considered excessive. ,On a gpld basis Australia sold its last dip at an average of about 5d per lb, and a!ij 50 percent rise .would give them, only l£d;-(gold), equal to lid in Australian currency. That level would stlil the pre-war standard in term® of gold. With rates of exchange op. somewhat lower levels than had latterly been experienced, a rise of 50 per cent, in terms of gold would result in better returns foil the Australian clip than for many years past. ~lt is important to note tTiat many growers have had their costs greatly increased because of the interest due on heavier loans. It would be a mistake, to assume that the wool-growers aj-e out of their difficulties. The improvement will help to a certain extent,, but the prices previously paid were -so .desperately low that there is still a long way to “go. The graziers are pressing their claims for a revision of. taxation and greater economy in the Public Servioe. Still they believe they now see the first sure signs that better times are; drawing near for the Commonwealth.