THE WOOL TRADE

Gisborne Times, Volume XXVI, Issue 2117, 17 February 1908, Page 2

THE WOOL TRADE

In these columns a few weeks ago wo made some references to an article :in the London “Times ’ dealing with the increased consumption of wool anil the collateral causes which led up to tho recent high prices. In a second article “The Times” now discusses the present position and future prospects of the wool market The influences making for the increased consumption of wool (unless much affected by the decline in trade that is evidently anticipated) must, it is contended, become more intensified in the future, while there is a fair prospect of much more important trade with the East than is done at present. Authorities generally hold out no likelihood of more ample supplies to meet this increasing demand, as many formerly important sources of supply tend annually ro become smaller. A decrease in European wool clips is inevitable, 'the growth of population and high farming causing a diminution in the flocks. In the German Empire there were ui 1906 some 3.000,000 less sheep than in 1900, and returns from other Continental countries show a substantial falling off. The reduction in the Argentine supplies of wool from 228,000 tons in 1901 to 149,000 tons in 1906, is looked upon as*of even greii-

ter significance, particularly as alfecting tho position of coarse wools. The sheep stocks in the Argentine do not -appear to be increased to any extent, an official return recently published giving the numbers as 77,000,000. Soino increase, as wo mentioned before, may bo expected from South Africa. The Australian clip last year was a record one, but \g

expected to be some 20,000 -bales shorter Ibis year on account of tho drought in New South Wales. The writer in “The Times” mentions that tho policy of closer settlement in Australia and New Zealand tends towards the rearing of fewer sheep. That is not so yet in regard to New Zealand, the total number of sheep in the Dominion being now larger than at any previous period, and the country is by no means fully stocked. In Australia many of the large estates which h ive been subdivided and settled are devoted to dairying, but it is now reported that dairy-farmers are turning their attention to raising fat lambs as being more profitable and less laborious. “The Tillies” says the latest reports indicate tho certainty that tlio clip to be sold ; n 1908-1909 will show a considerable deficiency, but admits that any definite estimate of this decrease cannot be made, even by tlioso best informed, at this date. In view of tlio facts above quoted, which show that tho most direct factor tending to a reduction in the cost of wool —increase in supply—is lacking. “The Times” regards the increase in values of the past year as the natural outcome of the ordinary course of trade. AVe arc reminded that the collapse in tho wool market of 1900 was brought about by overconfidence producingpver-speculation; tlio financial foundation on which tlio stability of tho wool trade depends gave way, and a state of exceptional prosperity was succeeded by chaos. It is pointed out that the causes that then brought about the decline of 40 per cent in values are always present in commercial life, -and are likely to be encouraged by the system of wool-selling nowadays. A much greater quantity of wool than was formerly the case is placed upon Hie markets in London, and in the colonies between the months of November and May, which imposes -a corresponding heavy strain upon financial resources. AYith regard to the recent fall in wool values, the primary cause is attributed to the financial crash in America, and the resulting dearness of money, -and it is tho remoteness of these factors of disturbance that encourages the -belief that prices have reached the bottom and that there will he a recovery, not perhaps in the immediate future, but later on this year, it is said to be universally admitted that the trade must soon contemplate a considerable, perhaps a serious, falling off in production, but we do mot -see any grounds for such a belief. Though there may not bo much increase—for the newer countries cannot on the whole now do much more than make up the gradual decrease in Continent.d countries- —there appears to he nothing at present to warrant any important decline in wool supplies. A drought in Australia is tho greatest disaster that can overtake wool production, but this fortunately has been averted for the present by copious rains in tlio different States. The easing of the money market and the improved tone at last month’s wool stiles in London give enconragemen to the hope expressed by “The Times” that prices will recover Rewards the end of the year, so long, of course, as the state ot -general trade in America is not reflected i‘the United Kingdom.