PRICE OF CHEESE

Dominion, Volume 9, Issue 2874, 12 September 1916, Page 6

PRICE OF CHEESE

IMPERIAL GOVERNMENT INTERFERES NEW ZEALAND OUTPUT MAY BE REQUISITIONED

Tlio announcement that the Imperial (Jover])merit contemplates taking action to reduce the price of cheese in the United Kingdom has caused something liko dismay among parsons connected with the dairying industry in this country. Two months ago the New Zealand Government was in negotiation with the cheese producers for. the purchase of the whole of the present season's output, on behalf of the Imperial authorities, and at that time many of the men connected with the industry were anxious to sell to the Government... But the negotiations fell through, owing to the Government refusing to pay the price asked, and since then the merchants have been buying freely at prices considerably in excess of what the factories were willing to take for their whole output in July. The fixing of prices by the Imperial Government at the present time cuts right across contracts in which nearly all the merchants and factories arc already involved. • Private advices received in Wellington yesterday confirm the cablegram published m yesterday morning s Dominion. The British Board o Trade has announced that it is considering the high price of cheese on the London market, and is seeking a. remedy. It may decide to "fix a maximum price, or control tho whole available (by commandeering), or requisition suf-| hcienff for army requirements." One private message mentions that "Hie idea is to check speculation." The prico of cheese has been soaring on the London market, and it has been obvious that with the heavy buying of the War Office and the decline in shipments from Holland and Denmark, tho market was going to remain strongly in favour of sellers if ordinary trading conditions were maintained. The difference between London prices and New Zealand prices has indicated that some speculation was proceeding. "The decision of the Imperial authorities undoubtedly is a serious matter for thoso engaged in the industry, said one business man yesterday. I was one of those who favoured a salo of the season' 6 output to the Government at a faxed price when the matter was discussed two months ago. The representatives of the factories wore asking 83d- a pound at that tune and probably the Government could have made an arrangoment at 8-Jd. But the Government offered to take 8000 tons of cheese at Bd., leaving the producers to ship tho balance, and this proposition did not appeal to men who were being offered 9(1. a pound by tho merchants. ..Tho negotiations fell through, and since then the merchants have been buying at 93d. and 9|d. Those engaged in the industry have been allowed to sell their goods and enter into business arrangements, and now the Government is .proposing .to upset those arrangements by an action that, in my opinion, should have been taken two months ago or not at all. The interference of tho Government aftor the cheese has been bought and after supplies have begun to reach tho stores is most disconcerting." ' The opinion expressed in another quartor was that the cheese producers and the merchants had simply overreached themselves in their effort to secure "speculative prices" for their product. "Last season the Imperial authorities took 15,000 tons of our cheese at 7Jd. per pound, and tho producers were very glad indeed to get such a highly profitable price," the reporter was told. "This season the producers demanded 83d. per pound, l and they would not accept the Bd. offered by the Government. They thought, I suppose, that the needs of tho Imperial authorities would force tho Government to pay their price. Since then factories havo. been selling their season's output at 93d. per pound, and even.higher, on the prospect of a shortage in London. Thoso transactions were obviously speculative, and though I do not eay that the prices were not apparently justified on the facts of the position, I do say that tho people who would not take the Government's offer two months ago have no right to complain that tho War Office is arranging to.protect itself against speculative prices now. That is what tho announcement just mado amounts to. . "I do not think that tho cheese producers have realised fully their dependence upon the Imperial Government at the present time. There is only ono market for. New Zealand cheese, and that is the United Kingdom. There is only ono way of moving tho chee6o out of this country, and that is by securing insulated space in_ steamers that aro running under tho direction of the British Board of Trado's Tonnage Committee. If tho Board of Trade does not provide space, _ then this season's cheese will romain in New Zealand. Doubtless arrangements will bo made, becauso tho Imperial Government wants tho choese, but the producers aro not in a position to dictate terms, and that fact should have been recognised before tho present difficulties were created." Tho Now Zealand Government has not received any instructions regarding the handling of cheese this season, and it is assumed locally that the Imperial authorities intend to fix the price at the London end, leaving exporters to make their own adjustments in NewZealand. Sales aro suspended in this : country in the meantime, and the tratlu ; will continuo in an uncertain state j until exact information regarding the i intentions of the British Government jis received. Most of the factories havo 1 already sold their season's output. The j indications arc that New Zealand will produce a record amount of choese this : year, probably from 45,000 to 50,000 tons, and last season's returns show j that tho dairymen and the dairy com- ' panics will be in a happy position even ! if tho price oventually received is no I moro than the Bd. per pound offered i in July by the Government for a portion of tho output. The position of exporters in relation to contracts already signed may requiro the attention of the Government. The purchase of the whole of the output of'the New Zealand factories by the Imperial Government would relievo : tho producers of one source of anxiety. Tho cheese would be bought f.0.b., and tho buyer would have to arrange for shipment. Tho position at present is ' that tho exporters have got to get their j cheeso to London before they find a ' market, and there arc indications that ' tho shipping difficulty may becomo 1 aouto. Tho now season's eheese has boen entering the stores this month, but no ship will ho available to lift it boforo September 28, and it is expected that heavy stocks will be accumulated quickly. 'The outlook from tho point of view of the shipper of cheeso is not very bright. I An additional complication from tho point of view of tho exporters is introduced by the fact that on Saturday ; last notice was received of an increase jin the freight charge on oheeso. The I Board of Trade has decided to increase the charge for the carriage of cheese to tho United Kingdom by one-sixteenth of a penny per pound, making tho present ralo 'jd. per pound. Tbi6 increase has taken place after the completion of many contracts, but _ some of the exporters had mado provision for such an occurrence in their arrangements with tho factories. The new rate will apply to the first shipment of: the pre- [ sent season.