PURCHASE OF WOOL

Waikato Times, Volume 127, Issue 21208, 3 September 1940, Page 9

PURCHASE OF WOOL

SOUTH AFRICA’S OUTPUT EFFECT ON WORLD MARKETS BRITAIN’S GOOD POSITION (United Press Assn.—Elec. Tel. Copyright) LONDON, Sept. 1 South Africa’s new agreement with the United Kingdom for the bulk purchase of South African wool has placed that Dominion in exactly the same position as Australia and New Zealand in regard tb foreign markets. While it continued to sell in the open market South Africa scored heavily in the Japanese and American markets at the expense of Australia and New Zealand, but now if Japan, America or anybody else wants to take South African wool in preference to their former favourites it will get only what the British Wool Control cares to release. The United Kingdom has now cornered 1,200,000,000 of the 1,250,000,000 lbs. of Merino wool produced throughout the world. Consequently there is much conjecture about the outcome of this virtual monopoly.

Bradford circles express the opinion that it will be most difficult for foreign spinners and manufacturers to hamper further Britain’s export drive in woollens. None will be able to get wool so cheaply. This contention was supported by an immediate rise of 9d in Stock Exchange quotations for Patons and Baldwins when the South African agreement was announced. The Economist says it is difficult to see how Britain’s huge purchases can be absorbed in the present conditions.

It seems clear that Britain will be left with a large surplus for storing until after the war, when it may play a valuable part in the restoration of industries throughout the liberated countries of Europe.