WELLINGTON NEWS

Hokitika Guardian, 16 March 1927, Page 4

WELLINGTON NEWS

THE BUTTER MARKET. (Special to “ Guardian.”) WELLINGTON. March 11. The position of New Zealand hatter mi the London market is causing very serious concern, and the predictions of those who foresaw the dangers of compulsory control are being verified to the full. New Zealand butter appears to he suffering from a boycott, for it is obvious from the daily and weekly reports, which all through have indicated that the market was dull or slow, or that New Zealand butter was neglected. Looking back on the cable quotations it will be found that on January Ist, the Control Board’s prices were 174 s per ewt for finest and 172 s for first grade. These were the

“ named ” prices and were maintained until Kelirpary lltli, when the quotations were' advanced 2s to 17(is and 1745. and this in ~ie face of the fact that sales were moderate, and the market dull. The reasons given by the London Agency for the upward movement wove contained in a cable message to the Board which read in

part": “ Prices advanced in view of Danish strength and general market position.” These prices were held for a fortnight and on February 21st there was a sudden drop in the quotations of 8s per ewt. making the quotations I.oßs to 106 s. In the following week, that is on .March 4th. the prices were again lowered by 4s per ewt to 10-!s and 100 s. and now there is a further drop of 4s. making the prices 100 s and I.lßs. In three weeks New Zealand butter lias declined Ids per ewt. If the prices could be held at this level tPie position would not perlmpe he so very disastrous, but the latest cable

message states that despite further reductions in the control price the demand is very slow. This makes it evident that prices must go lower, and what this means it is only the slaving dairy farmers know, and the l country will know presently. It is a tragedy, for it will mean bankruptcy tor a number of farmers many of whom have scarcely recovered Irotn the price debacle of 1920-21. But the dairy farmers must accept a great deal of the blame for the present position. They insisted upon what they grandiloquently called “ controlling their own industrv.” They refused to believe in the

many warnings, preferring to treat chose as the vapourings of disgruntled trade interests. But there is nothing to lie gained by seeking shoulders cm which to place the blame. The question now is what, it anything can he clone, to do to retrieve flic position. The Board through its Chairman made considerable promises of doing certain things, practically none of which were carried out according to promise. The Board promised that the goods would he cleared as they arrived ; hut that promise lias not been kept, on the contrary the Board seems to have gambled for a rise and the speculation seems to have turned out disastrously. Just what the loss to the dairy farmers will amount to cannot he accurately stated or closely estimated, for it is variously estimated at one to two millions sterling, dint that it will lie large and serious is very evident. ihe advance to the dairy farmer was recently reduced to Is per lh for superfine butter and proportionately less for other grades and possibly there must be another reduction. The position lias got to be faced and prompt measures taken to prevent the market going lower, although that is going to prove a difficult matter. The first and most important is to reestablish confidence, and to do that it seems imperative that the London Agency must bo scrapped or its functions greatly restricted. The London manager, .Mr Wright, who does not appear to have the confidence of the distributors, must go. and the power to exercise absolute control must be taken from the Dairy Hoard and. also from the cither hoards. We cannot

run any such rislcs. again. It is a deplorable fact that the producers of the Dominion appear to have lost all sense of proportion. They have laboured under the delusion that they could through some organised body dictate to the buyers, and it has required almost a catastrophe to convince them that trade is not war. The Duyin«j; and sfllinp: of should be mutually beneficial, for like the quality of mercy it should benefit alike the buyer and the seller. But let us not lose sight of the fact that prices could not hold at a high level even if the Control Board had no existence. We are ill a period of falling prices, production is increasing and competition is keen. The great task before flic producers as well as for manufacturers and traders is to reduce costs. Commodity prices c-annot be forced up by anv known scheme, there is therefore but to endeavour to reduce the costs of production. That is the task every one seems anxious to shirk.