WELLINGTON NEWS

Hokitika Guardian, 18 September 1926, Page 1

WELLINGTON NEWS

BUTTER -MARKET RECOVERS.

(Special to " Guardian.”)

WELLINGTON, September 15. The butter market appears to have recovered slightly, or rather it should he said that its downward course has been arrested. It is difficult, however, to say what the true price of New Zealand choicest salted butter is. The Dairy Control Board’s message from its London office, dated September 11th, gives the quotation as 1625. The High Commission’s message, also dated September lltli. gives the price as 150 s to 158 s, and the messages received by the following are all dated September 10th: Bank of New Zealand 156 sto 1565, Joseph Nathan and C‘o. 158 s to 160 s, and New Zealand Producers’ Co-operative .-Association 152 s to 158 s. The message Received by the Dairy Control Board gives a quotation that is 4s higher than the others. The High Commissioner’s message and the Board’s message are both dated September 11th, yet there is a difference of 4s between their quotations. It is difficult to account for this unless it is the London. Agency wishing to give the market the best appearance in quoting the price of exceptional lots, if so this is misleading,' foil it is not really the market quotation for the hulk of the butter. A recovery was anticipated for with every drop fresh buyers have been attracted to the market, and if the retail prices have been lowered consumption would have increased and that in itself would have greatly helped the market. It is a question whether the recovery will continue very long. There is a tremendous quantify of stored butter to market, and although it will he some little time before new season’s New Zealand make will he on the market, new supplies from Australia and the Argentine must he available. It is stated that a. good deal of the butter sold will not realise the amount advanced against it. and there will he claims for refunds. An authority says that in the past it has been the practice of London firms to stand hv their client factories and give them temporary financial assistance to tide them over such a situation as has arisen. Now. however, that the Board has assumed control the connection between

the Toolov Street importer and the New Zealand factory no longer exists; the goodwill which smoothed over ninny difficulties in the past lias vanished. Tf a factory is indebted to n London

merchant for £IOOO when last season’s stocks arc finally realised, his Now Zealand agent will ho expected to secure a prompt settlement. There can he no question of taking it out in instalments from next season’s output, ns this is controlled bv the Board. To this the Board states (hat if any dairy

company, against, which a reclamation claim exists, is prepared to give th ‘ Board an order against any advances coming to such company for new season’s butter, then the Board will meet the reclamation claim by means of payments out of the new season’s advances in such instalments as the company may arrange with the merchant making the reclamation. This brings out the fact that the goodwill which has hitherto existed between Tooley Street and the New Zealand factories has disappeared, and Tooley Street lias no incentive now to do anv special service to maintain the goodwill of its factory clients. The sentiment of the connection has vanished and that is a real loss. The __ factories which have specula toil in t-lieir own output of butter-—and storing butler for a fancy price was sheer gambling—will now realise that, Ihe host policy is to accept the market price of the day. Occasionally this price may he low, hut calculated over a season or a number of seasons the average price has been a fair one. The experience will serve a good purpose, for it will indicate to the Control Board the danger of mass speculation. Notwil't'-

standing all that has been said there is no doubt that Loudon merchants view the Board with some suspicion. Mr A. V. Alexander, a Labour member of the British, Parliamentary delegation, stated in Auckland that if New Zealand’s object is to improve and maintain the grade of primary products, well and good, but if tike trend proves in the direction of price fixation, and the regulation of exports, then some serious difficulties, which might not at the moment he properly appreciated, in the outpost of the Empire may arise. Tn the case of those who deal with New Zealand’s primary products, the policy of the Control Board is causing some anxiety.