OUTLOOK FOR WOOL.

Taranaki Daily News, 10 January 1921, Page 8

OUTLOOK FOR WOOL.

POSITION IN BRITAIN, THE NOVEMBER SALES, FURTHER FALL IN VALUES. .London, Nov. 18. “Free” as well as Government-owned wool was included in the offerings at the seventeenth series of colonial wool sales, which started on November 9. There was a good’attendance at the Home trade, while the United States and Continental buyers were fairly well represented on the opening day, when only Government wool was offered. Owing, however, to the “reserves,” particularly for Merino, for the most part, being far above the ideas of the market, comparatively few lots were disposed of. In the circumstances the New Zealand Loan and Mercantile Agency Company remark that it was hardly possible to form any true idea as to the position as compared with the close of the preceding series, but, so far as could be judged from the lots sold, values for the best Merino marked a decline of 10 per cent., and for average to inferior sorts 15 per cent, to 20 per cent., while crossbreds ruled 20 per cent, to 25 per cent, lower.

The first “free” wool sale took place on November 11, when some .603 bales of Australian Merino were offered, the bulk of it finding good competition at about the level of prices established at the opening, up to 38d being realised fora greasy AA combing and 35£d for greasy first combing. Since the opening there has been no material change in the position, withdrawals continuing to be heavy. . REASONS FOR PRESENT SLACKNESS. The postponement of the auction on account of the coal strike did not greatly inconvenience the trade as a whole, as the majority of users, in consequence of the sluggish demand, had still a fair amount of stock. In a few instances, however, buyers, shofrt of supplies, in order to. fill pressing requirements, purchased a few hundreds of bales which had been passed in from previous auctions. The New Zealand Loan and Mercantile Agency Company say that all through the various stages of manipulation stagnation reigns, particularly among the actual manufacturers, who find the greatest difficulty in getting old contracts taken up. This reacts unfavorably on spinners, and lower down again in the process of manufacture on topmakers. Hence it is not difficult to account for the present slack state or affairs, Supplies- arc large—far larger, indeed, than the demand —and this can •nly in the long run mean lower prices. If aything, Merino wools are better situated than crossbreds. These latter came into direct competition with similar wool from the Argentine, which has lately been selling at pence per pound below the present Government-controlled price.

FOREIGN EXCHANGE DIFFICULTY

It has all along been hoped that means would be found of enabling Central Europe to stock up with raw material, but with foreign exchanges continuall" growing worse the problem is rendered more and more difficult. All the same, a report is current that in the case of Australia a credit has been arranged bv the Imperial Government' to the extent of about £BOO.OOO for the purchase of raw woql. As things stand at present, the plain facts are that supplies far exceed the demand, and until this is altered it is impossible to escape the conviction that values must continue downwards. The “S” series of Government sales will open on December 7. The National Mortgage and Agency Company write that at the moment the news from manufacturing centres as a whole is not encouraging. There is a fair amount of work being put through -.n old contracts, but the amount of new “business offering is small indeed, and in may cases maufacturers are only working half time, so with prices on the down grade as they have been lately, there is no disposition to do more than absolutely necessary for pressing req- irements. An unpleasant feature is the large cancellation of orders previously given out, which further tends to discourage business. Merino tops are being offered somewhat below tbc clean scoured cost at the late sales hero, while in medium and the coarser crossbreds there is hardly anything doing. It is reported, however, that some coarse -•rossbreds oi 3G’s quality have been height for Germany. All things con- | B'dered, it will be seen that immediate prospects are not bright. “MOST UNWISE POLICY.” A correspondent in Bradford writes that all the Government crossbreds are now being sold at a loss, and it is not I'kely that any improvement will take place if these stocks are held indefinitely. So long as prices are ponce per lb. lower in South America, and the coming New Zealand clip is likely to be equally as cheap, home and continental buyers will not be ready to take the crossbred wools, which are now in this country, and a much better policy would bo to encourage buying by meeting the market. As a matter of fact. South AmeTican crossbreds are being * offered freely in Bradford at the same price per clean scoured lb. as the Government wants for its greasy wool, and so long as Bradford and Continental buyers can purchase freely in Buenos Aires at such low prices they will not take colonial crossbreds unless they are compelled to do so. There is also a need for a reduction in Government reserves on Merinos. The time has arrived when the department should be prepared to encourage business by meeting the market, and to give the selling brokers more latitude in accepting or refusing the bids. It has been thought for months that it was a most unwise policy to refuse bids that came within 4d of the reserve price, for when the same wool is offered later the chances are that a still lower price will be bid. A very large number of lots have been sold, and for which sensibly lower prices have been offered when put up for sale a second time. The effect of the weakness in London has been felt in consuming centres, where new business has been checked, and where there is evidence of little, if any, improvement. A decent trade continues to be done in tops with Germany byBradford export houses, but there is no improvement at the piece end, this being the section in which a turn for the better is most urgently needed.