WOOL PROSPECTS AFTER WAR

Southland Times, Issue 24243, 28 September 1940, Page 12

WOOL PROSPECTS AFTER WAR

AUSTRALIAN CLIP IS REDUCED

MERINO GRADES IN LESS DEMAND

A poor season and various other causes have led Australian producers to expect a considerably reduced production of wool in the Commonwealth this season. The latest estimate is that the Commonwealth cheque, which will accrue from wool bought on the same basis as last season, will aggregate only £57,000,000, against £65,000,000 last season. This reduction, while it will be something of a blow to the Australian producer, will probably be welcomed by the United Kingdom Government, which is now in the position of being the sole purchaser of almost all the Merino wool exports of the world. It is sole purchaser, too, at a time when there is a smaller demand for Merinos than for crossbreds, and at a time when in the free markets there has been a very much weaker tendency for this type of wool. There has been some criticism of the British wool control, and in support of this the prices for release of wool in Great Britain have been led as evidence, but it should be remembered that although the producer under the British purchase scheme has received fairly remunerative prices, the rise in the cost of the raw material at the country of origin is by no means the whole story. The increase has resulted more from higher freights, higher insurance charges, and greater expenses of handling. Manufacturers have also been faced with higher costs. In a rather encouraging survey of the present wool position, Winchcombe, Carson, Ltd., of Sydney, say: “Developments ahead will show more definitely the trend of the world’s open wool markets, but present indications do not point to high prices for Merinos, which depend on world competition for their value.

UNITED STATES PRICES “At late July, Ohio greasy fleece in the United States was quoted at figures only 13 per cent, higher than in that month a year before. In September 1939, the peak point of the war-time advance, the quotation was 45 per cent, above the pre-war level. Similar fluctuations have occurred in the New York futures top market. The downward movement has been caused by the elimination of Continental demand for Merinos. Crossbreds, by contrast, will continue to be eagerly sought. Great Britain, the United States, Canada, Australia and Japan, with fighting forces demanding equipment, will readily absorb all the crossbreds grown. The necessity for them is shown by the decision to give some preference in the earlier offering of crossbreds at this season’s Australian appraisements. “It must not 'be assumed from that statement that the use of Merinos will be negligible. Civilians must still be clothed. The fighting men must be provided with underwear. Merinos will be blended with crossbreds to offset the lack of the latter. In the United States 5,000,000 yards of serge made from 64’s Merino wool were pur-

chased for the army in July. “When the war ends reverse proceedings will be experienced. Millions will be changing from uniform to civilian apparel and the demand for Merinos will be stronger than the need for crossbreds. In 1921 the world was supposed to be ‘snowed under’ with wool. Its stock accumulation was stated to be so large that values were likely to be on poor levels for an indefinite period. Rates ascended and in 1924 values boomed. No person can see the end of this war nor its aftermath, but the civilian world will certainly want clothing when it finishes. The question is what money will they have to pay for it? GROWERS’ RETURNS “Meantime, the Australian Merino grower is assured of returns for his clip by the British contract. He can regard this season and the next season assured as far as humanly possible. The need is good seasons, so that the sheep will produce, a wellgrown fleece and give adequate monetary results during the currency of the scheme.

“The war has varying effects on those concerned in wool. The imports of woollen fabrics from Italy into the United Kingdom were more than 6,000,000 square yards annually. That large quantity arrived despite a duty of 20 per cent. Italian exports .were assisted by the Government, and the goods mentioned undersold similar English mill products by figures ranging to well over 1/- a yard. The British manufacturer is freed of that competition under existing conditions.”