WELLINGTON NEWS

Hokitika Guardian, 19 February 1927, Page 1

WELLINGTON NEWS

THE BUTTER. MARKET.

(Special to “ Guardian.”) WELLINGTON, February 1(3

It is difficult to understand the movements in the butter market. The Dairy Control Board lias maintained the “fixed” price at 1745, and it was explained by the London Agency in a cable message dated February 4th that tlio holding of butter prices in January enabled a quick clearance to be made of all old stored butter at reasonable prices. Clearance is now completed. This is most desirable for many reasons. including the Board’s advertising programme. The process of clearing stored butter lias affected sales ut Fernleaf brand. The London Agency apparently deliberately bold up the price of controlled butter, and thus forced buyers into taking the cheaper old stored butter. The effect of this has been that while the old butter has been cleared out of store its place lias been taken by controlled butter for which the demand declined. For the four weeks up to January 7th the Control Board reported sales on an average of 30,000 boxes weekly, while from January 7th to tilsl sales dropped to an average of 17,000 boxes weekly. There is no reason to believe that tlio volume of trading improved since then for all reports agree that the markets have been very slow. Another cable message dated February 12th reads: “The butter position shows little change. There is only a limited demand for New Zealand butter, the buyers apparently preferring Australian at about Ss per ewt less money. A satisfactory feature of the trade is the steady demand for stored and lower grade butters, which lias resulted in a great reduction of the heavy stocks which filled the cold stores at the commencement of the season.” A message received by the Control Board, dated February iltTi. says: “ New Zealand butter market continued extremely dull all the week, buyers holding off, and re-sales first grade UiSs, finest 170 s. We advanced prices Friday, when demand and sales improved materially. Brices advanced in view ol Danish strength and general market position.” The advance made was 2s per ewt. In spile of a dull market and re-sales hy former Diii'chasers ol finest, at fiOs and first grade-at 108 s. the, London Agency pushed ii)) prices and apparently because of the advance the demand and sales improved /materially, and this being so the prices should be lurthcr advanced to stimulate the demand and sales. This is certainly very difficult lo understand. It. is true the Danes advanced their prices to 1925, and it may bo that owing to this buyers will pay more attention to the New Zealand product. Between January 22nd and January 28th the Danish quotation was raised 8s to 1 Sis while the New Zealand once remained steady at 171 s. Since the end of January the Danish <inotation has been raised a further 8s and now stands at 1925, while the Now Zealand quotation with the recent advance stands at 1:70s to 10s below the Danish. The movements appear strange but we have not the detailed information in New Zealand on which to base a correct opinion. As the price ol controlled butter is fixed by a committee on which Tooley Street is represnted we are justified in assuming that the advance is warranted on the conditions ruling. THE WOOL MARKET.

Wool Buyers will Be Busy at the sales in the North Island until the first week in March. At "Wellington, Auckland, Napier and Wanganui heavy catalogues of crossbred wool will be offered, and there is nothing in the situation to warrant the belief that values will improve. The " W 00l Record IBradford) recently indicated the wool position as follows: “After two years of acute trade depression there is perhaps a. tendency in some quarters to take a rather exaggerated view ol the' improved prospects now in evidence. We do not of course find fault with this feeling of optimism provided it is not overdone; it should be encouraged up to a point, but no useful purpose will |,o served bv trying to persuade tinders that all their difficulties have passed. Wo certainly believe that the corner lias been turned and that the demand for wool textiles will gradually improve, but it is bound to be a stiff uphill fight. All . the indications are tli nt competition will be keener than over. Wool conditions of to-day do not encourage any hope of a sudden revival in the. demand for textiles; on the other hand there is prospect of a gradual revival provided political and financial conditions remain steady. Tn short the world is still passing through a. critical period of reconstruction and progress must be slow.”