WELLINGTON NEWS

Hokitika Guardian, 2 June 1925, Page 3

WELLINGTON NEWS

FALLING BUTTER .MARKET

(Special to “Guardi-n”.) WELLINGTON, -May 29. During the past ten days the price of New Zealand salted butler in London lias declined from 170 s to 102 s. and will probably be lower bv the time these lines appear in print. This drop lias taken place notwithstanding that Tnoley Street agents have been instructed to hold the butter. This decision to hold stocks from the market has given rise to a good deal of comment in London which was initiated hy -Mr .Emery, Chairman of the Home and Colonial stores, and taken by some ol the Loudon newspapers. It has also strengthened the opposition of the British producers to the proposed million sterling subvention to assist the marketing of the Dominion products. In Loudon there is said to he increasing comment that Australian and New Zealand producers are increasingly resorting to the creation of hoards to control prices and deliveries. Supply and demand must eventually control the prices and not control hoards, hut perhaps the lesson will not l.e learned until there is some thing in the nature of a c dlapse. .Many people connected with the trade are apprehensive ol a slump in prices next month when supplies will he augmented by the European production. What has happened in the wool market is expected to happen in connection with butter unless something unforeseen happens, and everyone is hoping that something will happen and prevent a slump. The woolgrowcrs had the opinion of experts who sta'ted that there was a world shortage. Wool has a wider distribution than butter, and a combination of buyers in the wool trade is practically impossible because of the different nationalities ol the buyers. No one for a moment believed that there was any possibility of n crash in wool, ami yet the crash mine with remarkable suddenness. Oil the basis of the prices realised at the last London sales crossbred fleece wool is worth in New Zealand to-day about lOd per lh, which is equivalent to the average price realised for wool in 1914. Butter has not the advantage of wool. It is a perishable product and depends almost entirely on a single market, j The competition in this market is increasing and becoming very fierce. 'I he advantage of quality long held by New Zealand over all competitors except Denmark is vanishing because our Heals are paying increasing attention to this matter, and supplies are expending and are much greater than last year. "While* it must lie admitted that the factories have a perfect right to keep their supplies off the market, it is questionable whether they aro acting wisely. Woolgrowcrs who have tried the experiment will assure them that they are acting very unwisely. Tho average price of butter exported froi'i New Zealand in 1911 according to Urn Year Book was 108 s per rwt, and if our flutter dropped to anywhere near that figure it would spell min with v capital rl. If there is a drop to MOs it would involve many dairymen in dillicultios. If wool with its wide International markets can drop to the 1914 value it is quite possible for butter to do so. However, experience is the best teacher and perhaps the trade may ho taught a lesson during the next five or six welts. Those who have sold goods to farmers and others on the time payment system are feeling very nervous, for their business promptly reflects any setbacks received by the farmers. Mith these trades it is a case of big milk cheques mean big business, but market cheeks spell disaster.