The Golden Fleece

Manawatu Times, Volume 62, Issue 25, 30 January 1937, Page 12 (Supplement)

The Golden Fleece

Perhaps the most reassuring feature of the present happy wool situation is that it appears to owe little or nothing to the speculative factor, but is firmly based on consumptive demand. Wool is wanted for immediate use. A genuine shortage is reported from all the manufacturing centres, intensified in the case of crossbreds by the temporary diversion of Japanese demand from the Australian sales and heavy purchases on behalf of American carpet manufacturers. Against this the carryover in New Zealand and other producing centres was unusually small. In these circumstances competition developed to buy tbe wool direct from the sheep’s back, so to speak. Bradford appeared to be dubious at first of the genuineness of the scarcity and held off. The fact that British buyers are now entering the sales close up to the earlier levels indicates that they are convinced as to the set of the market. In any case there has been ample confirmation in the course of the London and Australian series of sales. Another favourable factor is that the firm market has not been created suddenly, but, with minor fluctuations, has been building up steadily since the hardening tendency became manifest in March, 1935. All the claims made since then for synthetic fibres have not disturbed the upward movement, one that is supported by the general trend of world commodity prices. Natural wool is still wanted, the variety and area of its use continues to expand, while the world clip remains practically stationary, production in recent years declining slightly. Taking all these facts into consideration, woolgrowers are entitled to view the outlook with quiet confidence. New Zealand flocks taken as a whole have not yet been restored to the record level, 30,840,000 head, established in 1929, although there are a million more sheep in the country this year than last. At the present stage, therefore, it does not appear likely that the Dominion cheque will pass the previous records. In 1925, for instance, the sum of £17,740,000 was received for the wool from 24,540,000 sheext. Groovers will probably agree that they would prefer a steady and strong market to the abnormal values of 1925. Such a sound market appears to have been established for the current series of sales, although -wool prices are notoriously fickle and the future must always be viewed with reserve. At the first sale two months ago, bidding was on a much narrower basis, Japanese demand dominating and supporting the market. Since then, however, the values set have been generally accepted, and the recent decline in Japanese purchases has been largely offset by the entry of Bradford and Continental buyers. This development is reassuring, establishing the essential soundness of values. A notable feature of the recent Auckland sale was the increased strength, compared with the first Auckland sale, of coarse crossbreds. This further recovery is overdue, because coarse wools have been depressed at relatively lower levels than finer wools and have appreciated more slowly.