PRODUCE & MARKET REPORTS FROM DAY TO DAY

Evening Post, Volume CXII, Issue 84, 6 October 1931, Page 10

PRODUCE & MARKET REPORTS FROM DAY TO DAY

EXCHANGE COMPLEX DIFFICULT TRADING PRICE FLUCTUATIONS "Eveuing Post," Oth October. Trading is necessarily exceedingly difficult to-day now that .England is olf the gold standard. Mercantile houses are confronted with problems 1 hat have not arisen before and of which there seems but little prospect of satisfactory solution until something like constancy is seen in the relation of sterling to foreign currencies. jii evidence of, the nnsettlement in some markets brought about by the new conditions the "jumping about" of prices of Eastern produce can be cited. For instance, on 2Gth September in Singapore peppers rose by 3d per pound, dropped on 3rd October by 3d, receded two days later by ]d, and fell a further Id last Saturday. Similar fluctuations were noticed in other Eastern produce. Quotations for future delivery of foreign products and manufactures is exceedingly difficult in such circumstances. It is .estimated that the present sterlingAmerican dollar rate will represent aloading of imports from the United States by 17Vi per cent., additional to duties. Buying from the States is reported to be almost at a standstill. Cabled New York business opinion privately received to-day was to the effect that the rate will stabilise at about 4 dollars United States to £1 sterling. WHERE EXPORTERS GAIN. It is • interesting to recall the almost immediate effects of the change in the relative slump of foreign currencies to the British sterling. For example: — The par value of the American dollar was 4.86 equals £1. On the 2nd October the value was 3.07 equals £1. Previously if New Zealand sold 1000 dollars' worth of -wool in New York it received £205 15a 3d in London currency. On remitting this sum to New Zealand at a 10 per cent, exchange the New Zealand woolgrower received in New Zealand currency the sum of £225 6s 9d, less the usual bank commission. At a dollar exchange of 3.07 to £1 the New Zealand woolgrower's 1000 dollars in New York is worth £251 17s 9d in London and £277 in New Zealand. In other words, the slump in sterling puts £51 13s 3d extra profit into the pockets of the New Zeaj land woolgrower for every 1000 dollars' worth of New Zealand wool sold iv U.S.A. This has been reflected in a rise in the price of wool on the London market. Already there are signs of a revival of Lancashire cotton industry and the Yorkshire woollen industry. The British coal trade should also be stimulated. On 17th September the British price for 30s worth of cotton or woollen goods to customers in France was 124 francs. On 2nd October the same goods could be quoted at 100% francs and still return 20s to the English spinner. At so great a reduction in price, foreign orders should pour into England. On 17th September the British price for 20s -worth of coal shipped to Italy was 93 lire. On 2nd October the Welsh collieries could reduce their price to 78 lire and still receive their full 20s in Londou.