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UNITED STATES DEPARTE3I:T OF AGRICULTURE
Bureau of Agricultural Economics
Was in r-to n
'OCL-J1 October 11, 1937
THE WO OL S ITUATI ON
--NIV-- ---OF-- --FLL-- --
UNIV OF FL LI
Wool prices declined in the domestic market in September but
quotations were largely nominal in view of the light trading. The weakness
in the domestic market in the last month was preceded by a decline in
prices in foreign markets. The domestic price outlook for the next few months
is somewhat uncertain, reports the Eurrcu of Agricultural Economics, because
of the unsettled conditions in foreign markets. Domestic stocks of raw
wool, however, are below average and the demand situation remains fairly
The total supply of apparel wool in the United States on September 1
plus the part of the domestic production which will become available in the
next few months was about 15 percent larger than a year earlier when supplies
were unusually small, but it was smaller than the average for September 1 in
other recent years. The increase in supplies this year as compared with a
year earlier is due chiefly to larger imports in 1937.
Consumption of apparel wool on a scoured basis by United States mills
in the first 8 months of 1937 was S percent larger than in the same months
of 1936 and was the largest for the 8-month period since 1923. Since
consumption in the last 4 months of this year is likely to be smaller than
in the same months of last year, stocks on January 1, 1938, probably will be
considerably larger than a year earlier but may remain below the avrcagc of
most recent years.
Wool production for 1937-38 in four Southern Hemisphere countries
which furnish 91 percent of the Southern Hemisphore clip is provisionally
estimated at 1,967,00,0000 pounds, an increase of 3 percent above 1,36-37
and 2 percent above the average for the five seasons 1931-32 to 1935-36.
Total supplies from the Southern Hemisphere in the 1937-30 marketing
season which is now open probably will show a slight increase over th- previous
season. The increase in production which appears to be fairly gencral for
the five principal producing countries will mere th-rn offset the decrease in
end-of-season stocks in those countries. Total supplies in 1937-30, i.cwcv2r,
are not expected to exceed the average for the five seasons 1931-32 to 1935-36.
BACKGRCUiJD.- The domestic wool situation in the
early part of 1937 was featured by very largu mill
consumption, below average stocks and a level of
domestic prices higher than for any similar period
since 1929. The favorable conditions in the dom-
estic market were accompanied by strong demand and
relatively small supplies of wool in foreign
countries. In recent months, however, domestic mill
consumption has declined gradually, and there also
has been some tendency for mill consumption of wool
in several foreign countries to decline. Prices
have declined recently, 7oth in the domestic and
Wool Sales and Prices
Trading in domestic wools on the Boston market :as very light in
September and quotations wore almost entirely nominal. On the basis ..f asking
prices at which moderate quantities of wools cf the various grades *..:re
available, prices wore definitely lower at the beginning of October th.n a month
earlier but the price situation was very irregular.
Average quotations, largely nominal, for territory combing wools in
September wore about 15 percent bclc*- the February high point but about 10
percent higher than a year carlicr.
The uncertainty in the wool market at the present time appears to be
due largely to the lack of activity in the piece goods market and the
decline in wool prices in foreign markets.
rLill activity increased in all sections of the domestic wool manuf-
acturing industry in August. The weekly average consumption of apparel
wool for the 4 weeks ended August' 28 was 5,011,000 pounds scoured basis
compared with 4,102,000 pounds in July and 5,757,000 pounds in August 1936.
The increase of 22 percent in August as compared with July was much greater
than the average seasonal increase for August.
Total consumption of apparel wool on a scoured basis in the first
Months of 1937' was0 percent larger than in the first 8 months of 1936
and was the largest for the 8-month period since 1923. Consumption from
January to August was equivalent to 327 million pounds of shorn wool,
,greasy shorn basis and 53 million pounds of pulled wool, greasy pulled
basis. Mill consumption on a grease basis in the first 3 months of 1936
was equivalent to 316 million pounds of shorn wool and 52 million pounds
of pulled wool. Because of the large percentage of light shrinking,
foreign.wool consumed in the first S months of 1937, 'consumption for that
period on a grease basis was smaller than in the same months of 1935.
Although a seasonal increase in mill consumption is probable in
the next few months, consu'.mption in the remainder of 1937 is likely to be
smaller than in t.. same months of 1936. Total consumption on a scoured
basis in 1937 probably will not differ greatly from that of last year.
The 1936 consumption was 8.5 percent smaller than in 1935 but with that
exception was larger than for a:.y year since 1923.
The supply of apparel wool in the United States on September 1,
including the unshorn portion of the 1937 clip, was about 15 percent
larger than a year earlier when supplies were unusually small but was
probably smaller than the average for September 1 in recent years. The
increase in supply this year as compared ;:ith a year earlier is due almost
entirely to the larger imports so far in 1937.
Since consumption in the remainder of 1937 is expected to be smaller
than in 1936 wool stocks on January 1, 1938, are likely to be considerably
larger than a year earlier and may also be larger 'than on Jc.n,.-.r:. 1, 1936;
but stocks probably will remain below the average of other recent years.
Wool -lports '
United States imports of apparel wool for consumption were C,016,000
pounds in August compared with 5,448,000 pounds in July and 6,062,000
pounds in August 1936. Imports of such wool in the first 8 months of 1937
amounted to 134 million pounds col..pared with 75 million in the sane
months of 1936 and were the largest for those months since 1926.
S FOREIGN SITUATION: .
Wool Sales and Prices
The fourth series of London 7ool auctions for 1937 opened Septeliber 14.
The general uncertainty of the world market was evident at the opening and
prices reflected the declines which occurred at the early Septeiber sales
in Australia. Conditions improved somewhat during the series and although
prices in :most cases were not quotably higher, they were reported to be
much firmer at the close of the sales.
Closing prices for greasy and scoured merino wools at the London sales
were 10 to 15 percent lower than at the close of the previous series on
July 16. Fine crossbred wools both greasy and scoured were 5 to 10 percent
lower than in July and medium and low crossbred 5 to 7-1/2 percent lower.
Laimbs wool slipes were 7-1/2 to 12-1/2 percent lower than in July and
sheeps wool slipes, 10 percent lower.
E glish buyers took 29,500 bales at the September series, continental
European buyers 10,000 bales, and the United States 1,000 bales.
Southern Eem:ispohre sales
Conditions at the Australian wool sales were irregular in the first
half of Sept. .iber and prices declined at all centers. Japan and the United
States made no purchases at the a.rly sales of the season, and buying by
England and continental European countries as not sufficient to maintain
prices at the opening level in view of the generally unsettled conditions
in the world markets. Sales increased sonelwhat in late Sept~ember aid the
price decline was checked. Japan made srall purchases at Sydney and
Adelaide toward the end of the month,
Reports fro.i South Africa indicate that conditions at the early sales
in that country were similar to those in Australia.
It was reported in Septoembor that Japan's purchases in Australia
during the 1937-33 season may not be as large as fornurly estimated. On the
basis of an Australian Japanese trade Egrocmcnt which called for the
purchase of 600,000 bales of raw wool between January 1937 and June 1933,
purchases in Australia for the current season .wore expected to total
500,000 bales at least. Thu i:mportan-cof the position of Japar. in the wool
market is evident from the fact that exports to Japan from the five principal
Southern Hemisphere markets in the last 2 seasons wore exceeded only by
those to the United Kingdom.
1937-38 Outlool: For Supplies From Southern Hoeisphere
The increase in wool production in 1937-30 in the five principal
wool producing countries of the Southern Hoeisphere probably will more than
offset the.decrease in end-of-season stocks. Even with the expected
increase in supplies above a year ago, however, they are not expected to
exceed the average for the five seasons 1931-32 to 1935-36 when they reached
2,211,000,000 pounds and will probably be around 250 million pounds smaller
than the record supplies of 1932-33 when both production and stocks of old
wool wVero very large,
Stocks increased in primary markets of the Southern Hemisphere in the
years of low wool prices and reached 2534 million pounds at the beginning of
the 1932-33 season. Since then they have boon pro -rssively reduced, and
at the beginning of this season amounted to roughly 62 million pounds.
Production in the Southern Heoisphere
Earlier estimates of an increase in production in the Southern Hecisphore
in 1937-33 are confirmed by recent reports although modification of the
South African estimate is necessitated by continued dry weather.
Production in four countries -/ which furnish 91 percent of the
Southern Hemisphere clip _s provisionally estimated at 1,967,000,000 pounds,
an increase of 3 percent above 1936-37 and 2 percent above the average for
the five seasons 1931-32 to 1935-36.
Thj increase in production this season a pears to be fairly general,
although it is not so largo in the Union of South Africa as was expected
earlier oeing to the continued dry conditions in: the interior where sheep
numbers are largo. This has resulted in a dowm'ward revision of the early
estimate for that country to 277 million pounds, which is an increase of only
5 percent above the revised estimate for last season. The new clip in New
Zealand is unofficially estimated at approximately 325 million pounds or
3 percent above the revised estimate for the 1936-37 season. Sheep numbers in
New Zealand reached the highest level on record in April 1937, being estimated
at 31,211,000 or 4 percent larger than in 1936.
Although estimates are not yet available for the South American
countries, recent reports indicate that production in Argentina will probably
equal that of last season when it :.as larger than in 1935-36.
Production in 15 Northern Hc:xisphero and Souther.- Hoeisphere countries
reporting so far for 1937 is now estimated at 2,615 million pounds, an
increase of 3 percent above 1936. These countries furnish 75 percent of the
world total (Russia and China excluded).
1/ Australia, New Zealand, Union cf South Africa, and Argentina.
?Movem.ont in Southern Hcmisphore countries
Already receipts of w-ool at markets of Australia, ITc.: Zealand and the
Union of South Africa in the first 2 months of the 1937-33 season, July and
August, show an increase of 17 percent above a year ago and 24 percent abovee
the samro months of 1936. The largest portion of the earl;' receipts :as
received in Australia where the increase was 17 percent above a year
earlier. The increase in Australia probably was due in p-rt to earlier
marketing in an attempt to avoid deterioration in those districts of Ilc:re
South .ales suffering from dry conditions.
Exports from Australia, Now Zealand and the Union of South Africa for
the first 2 months of the 1937-38 season were larger than usual; they
amounted to 80 million pounds, an increase of 25 percent above the same
period of 1936-37 and almost 30 percent above the av-rao for hat period for
the preceding five seasons. In the 10 seasons 1920-29 to 1937-38, this
total has been exceeded only twice, in 1930-31 and in 1933-34.
The quantity of wool exported from all five Srothern Hc-i.isphcr
countries including Argentina and Uruguay in July and August this year
exceeded those of a year ago by 24 percent. The South America.n season ended
September 30. Although experts for the entire season ar-e not yet available
it appears freo the totals for the 11 .-nths ended August 31, 1937, that
shipments fr.::i Argentina will amount to about 305 million pounds, an increase
of 9 percent above 1936-37, and that shipments from Uruguay will approxi:.mate
125 million pounds, also an increase of 9 percent above the preceding season.
Suplios_ in. Imerting_ C.untries
Information available on supplies of raw wool in foreign iimp-rting
countries indicates that stocks were relatively low in all countries, with
the exception of Japan, at the beginning of thu 1937-30 Southern Hc..isphere
Imports of raw wool retained in the United Kingdom fro:: Janu-.ry, to
August of 1937 -were about 50 million n pounds smaller than in the samn :.. nths
of 1936 and were also smaller than the average quantity retained for th.'sc
months in the 5 years, 1932-36. while e :mill consumption of wool in the
United Kingdom_ so far in 1937 probably has boon smaller than in 1936
the decline in consuLotion is not believed to be as large as the decii:.c in
I..ports into Belgium. a.d Italy in the first half cf 1937 wore l:.rcer
than inL the first half of 1936 but this increase was ::re than offst by
the decline in i::-,orts into Francs, and Ger;..any. Combined imports int- these
four continental European countries from. January to June wore al ut 5 -r.rnt
smaller than in the first half of 1936 and woire rm.uch s..allor than th- 5-:"car
.1932-36 avc.-. c.
Stocks of tops at comr:.ission ccr.bing establish;..-ts in France, Bclgiu:., .nd
Gr...-iny on Septembcr 1 were smaller than on that date of the 5 prerccding years.
Stocks of wool in reporting warehouses of Japan on August 1 wore about
25 percent or 20 million n pounds larger than a year earlier and with the
exception of July 1 of this year ;rJre larger than at any previous date
according to statistics published in "'Tool Intelligence Hotes". Imports into
Japan in the first 6 :::cnths of 1937 wore 220 million pounds compared with
179 million pounds imported in the sa:;.e months of 1936.
Manufacturing Activity in ICaporting C untrics
Mill consumption in the wool textile industry of the United Kingdo:
has declined slightly in the last few .;,onths. 'Ihile the decline is partly
seasonal, total consumption from January through August 1937 was unofficially
estimated to be about 6 percent smaller than in the same months of 1936.
The Far Eastern disturbance has resulted in some uncertainty in Bradford
* wool centers. The British Ministry of Labour reports that 9.9 percent of
insured workers in the woolen and worsted sections were registered as
unemployed on August 23 compared with 10.4 percent on July 26 and 10.9
percent' in August 1936.
No material change in activity was reported in the wool textile
industries of continental Europe in August axd earlyy September, according to
a cable" from the Berlin Office of the Bureau. The situation is seasonally
quiet in France and Belgium and new orders are being withheld in most
centers as a result of the recent price decline and general uncertainty in
the wool markets.
Activity has b-een relatively high in 3elgium so-far in 1937 but
conditions in France have been rather irregular. A marked improvement has
occurred in the Italian industry, which is emerging from t he low level of
activity resulting from sanctions and unfavorable economic conditions in
Table 1.- Price of wool per pound in specified markets and prices of
textile raw materials in the United States, selected
Market and description
: 9 : 1937
.Average Average. 1936 .*----
1935 1936 Sept July ug. Sept.
: : : July Aug.:Se.
Territory combing, scoured basis
74s, 70s, O0s (fine) .......:
56s, (3/G blood) ..........
46s (Low 1/4 blood) ........ ,
United States farm price
(15th of month) -
Grease basis .... ..........:
Average quality, clean cost 3/ :
70s .................... .. :
56s ....................... :
Bradford / :
Scoured basis -
64 warp ....................
50s .......... ......... :
Cents Cents Cents Cents Cents Cents
26.5 31.3 31.4
Southern Hemisphere -
: Between seasons prices not
Textile fibers -
..ol, territory fine,
scoured '"asis ...........
Cotton, 7/0 Lciddling _/
Silk, Japanese 13-15 6/
Rayon yarn 150 doricr
Foreign prices have been converted at prevailing rates of oxc'ian,2e.
2/ Average of quotations for each series of London sales as reported by the
London Office of the Bureau For months when no sales were held figures
3/ Top and noil in oil.
/ Quotations reported about the 25th of the month by the London Officl of the
5/ Average at 10 markets.
6/ 78 percent white, at How York.
Table 2.- United States: Wool imports, consumption and machinery
activity, specified periods, 1936 and 1937
S Jan. Aug.
Itom : 1936 1937
Imports for consumption -
Actual weight 1/
Ap*arcl .............."; 74 .747
Finer than 40s .. ...: 57,717
Not finer than 40s .: 17,028
Carpet, including camels hair : 2,593
Consumption, scoured basis 2/
Weekly average -
Carpet .. .... ........
L.;chinory activity 2/
(40-hour shift) -
Worsted combs ........:
Worsted spindles .....:
Woolcn spindlcs ......:
Looms broad ..........:
Looms narrow .........
Carpet and rug looms
Import figures from official records of the Burcau of Foreign and Domestic
Commerce, Consumption and machinery y Activity figures from the Bureau of the
L/ Ueight of greasy, scoured and skin wool adodd together.
2j Figures for July based on 5 weeks, August on 4 wooks, Januaryto August on
35 weeks, No adjustment made for holidays.
141,524 11,291 13,570
UNIVERSITY OF FLORIDA
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