WOOL MARKET.

Taranaki Daily News, 7 February 1921, Page 5

WOOL MARKET.

DISPOSAL OF THE SURPLUS. H REALISATION ASSOCIATION. DOMINION TO PARTICIPATE. By Telegraph.—Pre«» Association. Wellington, Feb. 5. In the course of a lengthy statement issued to-day the Prime Minister refers to the question of the disposal of the supplies pf New Zealand wool at present in the hands of the Imperial Government. It is pointed out that when the Bri-tish-Australian Wool Realisation - Association sbheme was initiated it was proposed to deal only with Australian wool, but the question of the association handling New Zealand wool arose, and cabled negotiations were instituted urging the direct representation of New Zealand on the body having the control of the disposal of th® accumulated stocks of wool. As a result of these cabled negotiations it is now proposed that a New Zealand committee of three be established in London, one to act as chairman and the chairman to have a seat on the board of directors of the Wool Realisation Association. Owinjg to an error in transit the latest cable is not clear and another urgent cable has been sent seeking as to the extent and powers of this committee and the chairman. In addition to the London committee an advisory committee in New Zealand in proposed to keep in close touch with the London committee, particularly in regard to all points connected with the realisation of ac-’ cumulated wool stocks.

HIGH RESERVES IN LONDON. PROTECTING THE PRODUCER. London, Dec. 16. The Parliamentary Secretary of the British Ministry of Munitions, Mr. James Hope, has issued a further written statement with regard to the wool policy of the Government. This is the outcome of the challenge, by Mr, A. M. Samuel in the House last week, of the wisdom of the Wool Department in refusing to sell Government-owned colonial wools during the past summer at prices which he suggested were then obtainable.

“The wool market has fallen very heavily since May last,” Mr. Hope writes, “and assuming that the Government could have reduced prices without being immediately followed by all other competitive sellers, it is probable that a certain limited quantity of wool might have been sold to better advantage if the prices obtaiiyible in the summer montjis had been more freely accepted. The highest estimate that can be placed on the business thus lost is 100,000 bales, against a. stopfc in June last of 290,000 bales. The bids actually made and refused covered a quantity of less than 25,000 bales.”

The objects which the department had in view in gradually reducing its reserve prices, instead of sharply reducing them or abolishing them altogether, are: (1) To prevent a sudden and disastrous fall which might have had very serious and far-reathing effects on home,trade. (2) To allow the wool market to find its new level in the Australian and New Zealand auctions, and not to force that down by action in this country, which might have been thought bj’ the Dornin- ' ions to be precipitate and inimical to their interests. It must be remembered that the sheep-growing industry is vital to Australia and New Zealand, that prices for their wool were kept artificially low from 1916 up to March 31, 1919, by Government action, and that wool prices have now fallen to a level which, estimated in gold currency, is on the average at least, 10 per cent, below pre-war prices, while almost all other agricultural produce is 50 to 100 per cent above pre-war levels. “It will be seen, therefore, that the course of wool price's has necessarily been bitterly disappointing to Australian and New Zealand wool-growers, and the department feels that it has been justified in avoiding any suspicion of having aggravated the difficulties under which the woo]-growers were now laboring. British traders and manufacturers have not been placed at a disadvantage with any of their competitors, it having been open to them at all times to obtain their raw material from the cheapest source of supply.” A memorandum, signed by Mr. J. F. Hope, M.P., dealing with the cost, work, and staffing of the Ministry of Shipping and the Ministry of Munitions, has been published in the form of a White Paper. “By far the most important problem at present in the raw material section of the Ministry is the stock of colonial wool bought in pursuance of war contracts and remaining on hand,” the memorandum states. “This, at cost price, at March 31, 1920, amounted to £73,4*83,789, while to-day the stock remaining approximates some £60,000,000, comprising about 2,500,000 bales of Australian and New Zealand wool, about half of which is in this country and in transit, and half in Australia and New Zealand. The elimination of the Central Powers during the war and largely since the armistice, as purchasers of imported wool, has naturally increased the difficulties of the situation. Belgium and France have, to some extent, been purchasing British Government wool, both at Antwerp and in London, but, owing to exchange difficulties, they are purchasing as little as possible. 'Germany has made no direct purchase, nor has Austria; but arrangements have lately been made to supply Austria with £BOO,OOO worth of wool, and negotiations are going on in respect of supplies to Poland. “At present new clip wool, i.e., wool shorn since June 30, 1920, which was not purchased by the Imperial Government, is beginning t'o arrive from Australia and New Zealand. The Australian and New Zealand local sales have been very discouraging, except for fine merinos and fine crossbreds, and the amount sold so far of all descriptions Las been negligible. “There are large stocks of low crossbred wools in South America, which are being offered to the Central Powers at very low prices. The fall in prices in the United States and South Africa has also been very marked. It will be seen from the foregoing, therefore, that the present position of the woo? trade is extremely difficult. To attempt a forced realisation of £60,000,000 of wool at an early date is, in the first place, impracticable, and, in the second place, it would ruin the entire woollen trade of this country if attempted, quite apart from the fact that Australia and New Zealand are financially interested in the profits realised on the sale of Govern- * wwtt liQSfes of wook”