WELLINGTON NEWS

Hokitika Guardian, 23 December 1927, Page 4

WELLINGTON NEWS

THE PRODUCE MARKETS. (Special to “ Guardian WELLINGTON, Dec. 21. The condition of the produce markets at the moment is scarcely of much interest, because those markets are more or less influenced by the holidays. Interest centres rather in the market prospects, and those prospects arc not altogether as satisfactory as one could wish. The wool position has certainly been satisfactory, but can it remain so? Verv heavy weights of wool will he reaching the consuming centres in Britain and Europe, and this wool represents an enormous sum of money practically lying idle,'but on which interest must* be paid. The question then

aiises whether this weight of wool will exercise a depressing influence on the market. Users will not then be short of wool as they have been in the past lew months. Wool is certainly high, although not too high from the grow - ors’ point of view, but users cannot pass on the increased cost of wool because the ultimate consumers will not pay it. The wool position should lie clear when the London sales ill .Tannery begin, and we must not be surprised if there is a slight set-back. If Germany is in good buying mood the market should hold.

The dairy produce market has been puzzling the experts. Just when it was expected that there would be a good demand with firm and rising prices, the market has been phenomenally dull. The Christmas trade was a disappointment, and the explanation given for this is that the supplies in retailers’ hands was greater than anticipated. Retailers apparently acted with caution, secured ample supplies lor their Christmas trade, and thus were not obliged to trouble the distributors. who have bad to reduce their prices. The price of finest New Zealand salted butter is just under Kills per ewt, and the retail price has been reduced to Ls Bd. Ibis is a comparatively low price and should stimulate consumption, but unless supplies show signs of running out a big rise in prices is not to be expected. Messrs "W. Weddel and Co. in their annual review pointed out that it was useless oT producers expecting high prices as production was expanding in all centres, and advised producers to see to the cost ol production. Nothing has been done ir New Zealand in this respect, but as production has expanded the average cost w ill he slightly less than lasf season. The disparity between expori

prices and local prices continues, and while that is so there can be no material expansion in purchasing power, consequently we are bound to have a repetition of the unemployment in the late autumn and winter months. The frozen meat market shows some improvement, and the probability is that the improvement will hold. The meat war that has been in existence tor over two years has now ended, and it is but natural to suppose that those engaged in the competition and who made heavy losses, will now contrive to recover some part or the whole of that loss, and this can be accomplished only by advancing prices. If Argentine chilled beef is advanced then consumers will be tempted to return to mutton, which is offering iust a shade above beef prices. The market for frozen lamb may not show any revival, because of the large quantities of second quality lamb which is being marketed by Australia and Argentina. New Zealand first quality lamb should sell well, hut second grade will he a drug on the market. A good deal will depend on the state of the money market. If normal conditions rule the money market should case, but the times do not admit of normal conditions. The better tone of the London money market, and high rate of sterling exchange are due largely to the forbearance of the. United States, lor if the New York re-discount rates advance the London rates will have to advance. However it is just possible that the bank rate will be reduced to I per cent, and the market would appreciate the reduction even though it be only j per cent.