PRODUCE PRICES FROM BRITAIN ARE CRITICISED

Grey River Argus, 7 August 1948, Page 3

PRODUCE PRICES FROM BRITAIN ARE CRITICISED

A Chamber of Commerce View WELLINGTON, Aug. 6. Doubt whether the recently-signed produce agreements with Britain would ensure the stability that was promised was expressed at a meeting of the Wellington Chamber of Commerce, states a supplied report. “These contracts were probably the best we could get,” said one speaker, “but we don’t want to let them lull us into a sense of false security.” Mr Frank Wilson said that world prices for butter and cheese were tit an exceedingly high level, and future trends, he suggested, would be downward in sympathy with wheat prices. Consequently, the opening 1948-49 basic prices in the contract were of vital importance, as on a steadily declining market the initial figure of 235 s for butter and 133 s for cheese could be reduced annually by 7i per cent, to approximately 147 s 3d and 83s6d respectively in 1954-55, representing an average annual price for the seven-year period of approximately 188 s 3d per cwt. for butter and 106 s 6d for cheese. Was it intended that the present substantial discount on New Zealand butter, as compared with world parity, would be maintained during a period of steady recession in the Dominion’s butter prices,” he asked

“For example,” he said, “on an assumed and conservative opening world parity prices of 3205, compared with the New Zealand contract price of 235 s f.0.b., values calculated on a 7>. per cent, reduction would at the end of the 1954-55 season reduce world parity to- approximately 200 s and New Zealand 147 s 3d, giving an average annual return of approximately 256 s 3d and 188 s 3d respectively From this it will be seen that price stability is far from assured, as on a receding market the butter and cheese prices would, during the final season, be discounted by approximately 37.., per cent.. It would be more correct to regard the agreement as determining the minimum price payable in the event of a serious slump in world prices during the next seven years.