WELLINGTON NEWS

Hokitika Guardian, 5 June 1925, Page 4

WELLINGTON NEWS

HOLDING HACK BETTER

(Special to “Guardim”.)

WELLINGTON, dime 1

.Mi- W. (! runu<ls, Chairman of the Dairy Brodiiec Control Board, has expressed liis opinion on the present position of the London blitter market as it nli'eits the New Zealand product. London messages have indicated that tin* Tooloy agents of the New Zealand factories were holding the hntter under itistructions, dlte holding hack ot this I,utter was referred to by Air Emery. Ci,airman of the Home and Colonial

Supply Stores, who complained that it was detrimental to trade. Some of the

London newspapers have commented rather harshly on the attitude adopted !,v the New Zealand consumers, and Ida* New Zealand Co-operative .Marketing Association has hecn advised by its London oilice that the position created was ••unfortunate and nfleoting trade.

Air Grounds' explanation is that the complaints are coniine from speculatorwho have evidently not keen ahlo tc

• .■•cure heavy i|iinntities of produce that they had hoped to purchase. Accordin;. t*i Mr Grounds at this period of tin year when prices have usually been re ducod to a low level—-in fact helnw os' of production —they always 1. ok to hu; to :u 1 vantage. Apparently in the eye: of Mr Grounds this i-, a criminal oifvn a against the Now Zealand producer. Its- holding the produce sneculation i checked. This is quite a new idea o market speculation. Most people win*

tlmv are out to huy goods try to buy to advantage. The ladies rush the liarvain sales because they believe they huy to advantage there, hut the butter hover must noL do that. Is ii not when prices are at a low level that support for the market is needed? It

:s the -peculator who turnishes that support, and the moment lie buys he he comes interested in forcing up prices.

The holding hack ol butter I rout sale has checked speculation, it has also chocked trade and prices have not im-

proved, on the contrary they have declined. in the meanwhile those interested in li e New Zealand product arc ■•UMovot! at the inconvenience they are (,ring put to and naturally they will turn th.-ir attention to other sources 1 ..:poL where such inconveniences will not lie experienced. Furthermore li e res! rioted sale is causing supplies to accumulate that is supplies of New Zealand butter and on top of this there is the European production now about at the peak, all being rushed into the British market, the only I ret' market h r butter. ll is obvious that lor eveiv commodity there is an economic table based on supply ami demand. and neither the Dairy Control Hom'd or any other organisation can secure for New Zealand butter a price above its economic value, and the cost of production does not come into the matter, for supply and demand regulate the position. If the price is below the cost of production, the cost ot production must he reduced lo fit the price*. Mr Grounds thinks the price can he made to tit the cost of production, and he has yet to learn something ol the ways of the market. Sir Thomas Mackelftie, who Inis just, returned from London, does not think tavourahly ot the dairv outlook, and staled that he had observed in a commercial paper that Siberia would in l!>2b. place about ()()0 tons of butter on the London market. If this is anywhere near the truth the butter market will not be dominated by the relatively small quantit v exported Iron l New Zealand. LOSSES AND CROSSES. Continuing bis explanation Mr Grounds -bated that during the past f.-w s'-a.sons co-operative dairy factories bad 10-l heavily by the imni'diate sale of their produce on its arrival in Loudon, in comparison with those companies who held tlmir supplies off the market during the slump periods. They have boon led by Ike bitter experiences to < omplctcly bold he'd; tlicii -applies Lorn Ik,* market, and lo avail a list* in the priie usually accruing in the laic British summer and autumn mouths. This is unite lorieet. but it does not follow that Do- sanm conditions will be repeated. It must not lr* o\ .*rleok“d Cuil far the past three years

y'n:!il .i ii Hemisphere— Unit is Xi‘\v '/ I.n! Mini Ai! lrul in mid ArgoiiLin • - || !' the Im!i; Ill' |;:T SUpjrlifS of dairy j::•<scli tv. ivii'Mi.v fiiiiltl nut m11)>I>!y any i niisidcval.l.' <ju:i 11fit \ - mill Uk' Kiiropenti supplies were exhausted I h■ 11>i >• ill.' .Iv.irepcim auuin'u. Those cundilions nre changing. Kuropeaii production i-. expanding mnl Siberia, which contlimited praetmnllv nothin”; throe sea-ons 10,0 is now attracting itll inition villi tin- volume oi' her supplies. Tli • iri. I i.jiemi sen sell will so,on he ) .ri »I«ili"cd, that is to mi v the |>i oilnction will lie Imv;;' enough to serve Hrilnin well into lit mitiinin mid the rise in prices may not eventiinle. Thai the trend is in tl i-. ilirei timi is obvious from the fact (hat New Zealand Imlter is being Indd n;i now, prices are falling, Tlv s|iecuhitors who have heeii shut out of 11, * New Zealand imtrhet will turn to K:iro| . II Mil, plies mid satisfy their rev ((iiireinenls ilinl wav. Mr ((rounds thinks that this individual luetory el-! furt to control cannot prov ide the i on- I linuity of supply which is an important j lactor in iirirketing. When the Hoard’s I policy is definitely insi it tiled arrange-: ii'ents will Ire made to secure the nocos-,-ary emit limit y of Mil, ply. and predue-| ers in a v well ask how is this In he j ne; cnijdished. (‘oniiioiil v of -apply! means finance. mid oil this rpicslion ol finance Mr ((rounds and those who nil-, vdcaie ah-olute control are singularly j silent. No luntlcr wind .scheme is tried, or l,y whom. Ihe fact remains Unit butler i.nmol he sold at a 11i"lit■ n price i! mi i(s moncinic value which is dotcrJ le'ued bv supply and deinmnl. The woel ...rowers have discovered that.