LONDON WOOL SALES.

Otago Witness, Issue 2811, 29 January 1908, Page 8

LONDON WOOL SALES.

(Fbom Our Special Correspondent.) LONDON, December 13, 1907.

A POOR FINISH.

Since v writing' last the sixth series of wool 'sales are over, &nd buyers have returned home. There is no aspect which can be called s&tisfaetory, and 1 tfie sharp decline which has taken place must fill the mind? of many colonial, Cape, and Punta Arenas growers with considerable dismay. It :s indeed a pity that such a deadly stroke should have been struck •at values, and a drop of 2d to ""3d per lb is & very serious matter. " There laa been throughout tiie series an entire lack of confidence, and it -wili be well if things get no worse. Ibo situation continues to be entirely dominated by finance, and dear money throughout the world is having a serious check upon trade. Once again it is the totally unlooked for which has happened, and with such bright prospect* up to the end of October, the programme of importers and buyers generally has been completely upset. I hardly think that the trade is anything like out of the wood, and while it is only natuml to hope that the worst 'is passed, yet I cannot silence my own strong convictions that wool wili be cheaper. However, 1 will bring- this series to a clcee by quoting the expert opinions of a leading firm of selling brokers - and then - readers can put their own constructions on to the situation

Messrs Charles -Balme and Co., in their circular, state that "the clearness and? "^oarcity of money all 'over Europe, the result of heavy export of gold to America during the past six weeks; have 'completely altered the aspect of the markets In September values of merino v-00l were forced Tip to an abnormally high level in consequence of a section of the trade being obliged to purchase, practically regardless of price, sufficient raw material to enable them to fulfil existing contracts, at a time when supplies wer9 at their; lowest ebb; whereas, during the sales winch have just come to a «lose, the available quantities were much, larger, and manufacturers and spinners, wbo_ continue well employed, have been able, to exercise much more discrimination in their purchases, while the contraction of _ credit resulting from 1 the American crisis has eliminated speculation and caused topmakers and dealers to curtail their operations as much as possible. In this state of affairs, competition has been of an ufis&tisfactory character throughout the series, and prices for all grades have fallen sharply. "At the outset, the decline on merinos averaged 10 per cent., the depreciation being particularly noticeable on wasting and faulty descriptions- With the progress of the auctions, quotations further weakened, final rates being 7£ per cent, for superior greaeies, and an average of 15 per cent. for all other classes, lower than at the end of the ■ September sales. "The demand for greasy crossbreds has also been restricted, the fall on fine sorts amounting to 10 per cent., and on medium and coarse 12£ to 15 per cent. Scoureds and slipeu hava met with a somewhat better reception at prices in average 10 per cent, below previous values, a feature of the market . being 1 the relatively satisfactory results obtained for short limey parcels.

''The email quantity of South African wool available has sold at a decline of 10 per cent, in the case of the better greasies and 15 per cent, on poor-conditioned shipments, while snow whites have .suffered to the extent of % yx»\ cent. Western fleo^.

washed, has proved difficult of sale at quite 15 per cent, below September rates. "The new season's wools from Queensland and the Western district of Victoria, as well as Southern . and Western Australia, are well grown, sound, and in good order, although clips from the two latter States appear rather heavier in condition than last year: On the other hand, shipments from New South Wales, as a rule, leave much to be desired, the staple, although finehaired, being shorter than usual, _ and in many cases somewhat tender, while bur«* and seed are more prevalent than last seaFon, particularly among the Riverina growths. "The outlook for the New Year is dominated by the monetary situation in America and Europe. Should the present tension be relaxed, it seems probable that the trade, which is in a sound condition, would respond to the altered circumstances, but so long as there is any necessity for the maintenance of the present high rates of interest, an improvement in wool values can hardly ba expected." The first series during 1908 will take place on January 21, and the second series on March 17, there being no limits. During the year the home trade have absorbe I 857,000 bales, the Continent 1,372,000 bales, and Air erica 149,000 bales. This ie the largest quantity <ver taken by the United States, and the increase in the -total deliveries to the three countries is no less than 307,000 bales. As compared with the closing rates of the previous series, we row quote vu — •

Under this heading Messrs H. Dawson and Co. say: — "The auctions just closed have been held under conditions of ths most adverse and depressing character, the repetition or continuation of which is nt any rate highly improbable. The financial stringency is admittedly the most potent of .ill these adverse factors, and the easing of the money market would doubtless prove to be the quickest 6tep to recovery in our industry. There are, happily, signs of early relief in this direction. "Meanwhile thers is danger of yielding too much to the leactionay and pessimistic* spirit. There has been a salutary, if severe, shrinkage in values, and .the industry has to adjust itself to a new and lower level of prices for the coming season. There is more danger in fixing the new season's rates too low rather than too high, especially in the worsted branch of the trade. "Ihe reaction has hot been caused pri marily by any serious difficulty as regai'ds prices, although, wools in September reached to© high a level, but because of the stagnation and loss of confidence caused by the United States financial troubles. Our irduetry, however, is reported from all queiters to be in an, exceptionally healthy financial condition. "In face of ihe prospects of another year's call for worsted fabrics, it is well to beav in mmd 1 that the larger bulk of merino wools are of short growth and faulty character. Shafty wools suitable for the beet tops and for coloured yarns are likely to be in much less supply than last year; consequently they occupy a fayouiable position compared with the* shorter and faultier wools, and it may be necessary to make a greater distinction than usual this season between these sorte.

"There are hopeful features in the situation despite the stagnation of the moment. They are found, first, in the remarkable caution and reserve which nave completely possessed the industry, which is carfcainiy the quickest and surest way to adjust the position; and, s-econdly, in the fact that valuts have now come down to a reasonable and workable level, provided that the finan-. cial tightness is relieved.

"Moreover, although the trade of this country and of the world can hardly be expected to continue to expand at the rate of the past few years, yet the world's requirements for woven, knitted woollen goods were never «> large or so urgent. There is no branch of the industry hampered by abnormal holdings; there is no immediate fear of labour difficulties; spindles are all well employed, and promise to remain so for another couple of months. Consequently with a relaxation in the money market, it is reasonable to expect that new business will be stimulated.

"As regards tbe Australian merino clip, estimating it roughly at near a million and a-haif bales, we find that about 900,000 bales have now been sold- in London and the colonies.

"Croasbreds are still seeking- a basis, and waiting for Bradford to establish a level. The New Zealand and South American markets have nardly yet got into full swing. Holders in both markets are not willin-j to sell until there are signs of a stronger support, end in New Zealand there is an indisposition to accept any seriously-re-duced offers for their wools. This may mean larger shipments to London for 1908 ; if this happens, it would, at any rate, ensure a more extended and regular distribution, which is perhaps the best security against severe fluctuations."

A SLUMPING MARKET.

Bradford has turned very_ weak, and anything put satisfactory conditions prevail. It is really surprising how quickly prices can drop when men begin to slaughter their stock, and conditions here to-day are decidedly depressing. Several forced sales have been made, with the consequent result that values are down considerably. It is common knowledge that a Ws top Is not worth rcore than 14d, if that, and I daresay it is possible to buy ever cheaper, if the cash is forthcoming-. It is not tHe best of signs when big firms have to resort to speedy so.le-% a-nd ih& Americs-u &UXX? is

accountable for much pressure in this market. Heal actual business is about at a standstill, the forced sales being quite sufficient to supply spinners with what they are at present in need of. This month many "future" sales are due for delivery, and this is causing topmakers to- push along- j with their contracts. Those who have had to bay early wool in Australia cannot possibly produce top 6at the prices they accepted, and it is questionable even with the cheaper wool that is now available if they can produce tops at the figures they have sold at. Too many contracts were taken, around 2s 3d last October, and the early wool bought cannot possibly, produce any weight of supers at that figure. It is now possible to buy easily at 2s 2d for next year's delivery for a standard supe* 60's top, but very few are now operating either for present or future delivery. There is a. complete lack of confidence, and every thing is being allowed to quietly drift. Everybody seems to think that there, can be no improvement until the financial out look improves, and confidence is established. Very shortly the movement in woo! will be on a very extensive scale, and with, a ? per cent, bank rate arrivals will take a <*ood deal of lifting. Nothing but a hopefuf feelins exists regarding the future, and it is a pity that serious eet-back ehouid have come towards the end of the year, when so much wool has been bought :n. the colonies at s>uch big figures. Crossbreds are just as weak as merinos, and very low prices are being accepted both for spot and future delivery. There- is no doubt that importers are determined on getting prices down in order to secure the coming New Zealand and South American, clips at as low a basis as possible, and then perhaps with easier, money rates an improvement wili set in. Consumption is still maintained, but particulars are not doming to hand as they 'were, and some spinners state thw yarns are not going out anything like as quick as they dfd a while back.

ferino grease— super ... ... IJd „ „ average to g00d... 2d ii it poor condition ... J id to 2a „ „" inferior pcs ... Idtoljd „ tcoured, super ... ' ... 3d „ • „ average to g00d... 3Jd „ „ inferior 3d „ „ faulty pieces ... 2Jd „ lambs', grease, superior nomiafcl „ „ „ medium... Id „ „ „ inferior ... lid JrosabKd crease, fine lid „ „ medium ... lid „ „ coarte... .*. lid „ „ inferior pieces Id „ „ laroba' Id „ scouredtfine 2d „ „ mcd. & coarie ljd „ gliped fine lid „ „ medium ... lid „ „ coarse lid cheaper » South African. Snow-white mper IJd „ medium... ... ... lj« „ inferior 1W Jre»se, combiDß, light la „ „ heavy 1«<» „ clothing, light id to Id „ „ heavy Id THE OUTLOOK. it