PRODUCE & MARKET REPORTS FROM DAY TO DAY

Evening Post, Volume CXV, Issue 69, 23 March 1933, Page 14

PRODUCE & MARKET REPORTS FROM DAY TO DAY

EXCHANGE AND PRICES

ARE THEY RELATED?

PUZZLING MOVEMENTS

"Evening Post," March 23.

The rate of exchange New Zealand on London was. raised from 10 per" cent, to 23 per cent. The object of raising the 2ate is now generally well known, but it may;be again described as a step taken, . by,-tho. Government through the banks to -in some measure compensate the farmer-exporter for the low prices he Was receiving for that produce. And inasmuch as the farming industry is the ■basic industry of this Dominion, upon its success, upon the ability of the primary producer (as he is called) to make ends meet and have a little over, the welfare of the Dominion as a whole depended. Primary producers would also include exporters of fish, timber, and other products additional to those of the wool, meat, dairying, and agricultural industries. It was reasoned by the advo-f-ates of raising the rate of exchange that i£ the farmer received in New Zealand, say, £125 for every £100 worth of produce he sold in the United Kingdom or the Continent, he would be £15 better off than he wa^ when the exchange was at the equivalent of £110 in New Zealand for £100 worth of produce sold in the United Kingdom. It was also assumed at the time, of course, that purchases of produce (wool, for instance) made and paid for in New Zealand would command prices giving an equivalent of £125 in New Zealand money for produce of a value of £100 in the United Kingdom. Of. course,' there were objections raised against this arbitrary, artificial, or whatever other description might be applied to this expedient of raising the returns to the farmer by raising the rate of exchange. Into these objections "it is not proposed to enter in these remarks, the object of which is to show how since the .raising of the rate of exchange overseas prices have,' if anything, fallen from the level at which they were (low as it was) 'before the rate of exchange was raised from 10 per cent, to 25 per cent. It does iiQt.iollow at all that .-raising the rate of exchange automatically depressed the .prices for exported. New Zea land ■ primary products. All sorts of things have to be taken into account in the.-.consideration of fluctuations in ■prices, ''no matter what the article may be, only to mention'supply and demand, vagaries- of fashion, quality or character •of the particular, article; aud buying strength of the market. Still, in regard to butter and cheese and meat exported there are something like standards. of quality ensured by efficient grading on export and uniform conditions of carriage and handling.' Wool is different and cannot be-standardised in the same way as" dairy produce. It .is the buyer •who grades wool and fixes its price according to his own particular limits. But it is a fact that since New Zealand exchange was raised the prices of the primary -exports of Ne\y Zealandj products^ of) the whole,, have declined. It may be a coincidence, but "there it is, as' the following comparisons will show:— ■ - ■ Prices Latest ■ Xew Zealand Produce. January.. Prices. Butter, per cwt . 97/- to 100/- 77/- to SO/--•White cheese, i>er cwt 56/- to SS/- 44/- to 14/6 Lamb, 37's-42's, per lb- ■ Z%<l -l%a ■Wethers, 4S's-s(j's, per lb ■ l-7id I'/.d Wool, 4O's-4Vs, .--..- ---per lb ...... ' ' t^a " " . "41 / i<l The wool above referred to is coarse crossbred of 4O'b-44 >s counts, average quality, sold in Wellington on January ,6 and March 9 respectively. This, description of wool realised only up to Siid in the Wellington sale of December 10. .The raising of the rate of exchange, however, appears to have had no influence, one way or the other, on the local markets .of January, February, and March for average coarse crossbred wools; but their quality, of course, would determine their value to buyers. And yet the raising of the rate of exchange to 25 per cent, on January 20, left these wools at 4%d. per ]b at the sales held on March 9, a position they occupied on January 6, before the rate went up. , . It is all very puzzling. ;