WELLINGTON NEWS

Hokitika Guardian, 2 May 1930, Page 2

WELLINGTON NEWS

COMMODITY PRICES

(Special Correspondent.)

WELLINGTON> %rit 29

It is pleasing to note that there is a sharp advance of 10's per cwt in the wholesale quotation for New Zealand butter on the London market, but care must be taken to exaggerate its importance. If the price holds even at the present level, which is much below that of last year, we will have much to be thankful for, but there are aspects of the situation that need to be taken into account. The sharp advance sof 10s indicates somlethinig unusual and that something is furnished by Trengrouse and Nathan, Ltd., who state that the rapid rise is due to speculators covering short sales for April delivery. Some wholesalers sold in advance and at a price butter they did not actually have available and to cover their commitments they have had to buy at any price. The same firm states that the ordinary buyers have not followed the advanjce anii reaction 'is q/xpecfted this week. This makes the rise look like a flash in the pan. Another firm, Messrs Samuel Page and Son, in their circular of March 17 say that it is scarcely likely that any marked advance can take place as weather conditions in Europe have been very favourable to production, consequently important shipments from the Continent were expected at an earlier date than usual, Whatever of New Zealand supplies still awaits marketing and there is a considerable quantity of butter in store in London, reported at 9050 tons against 6800 tons a year ago, and there is a considerable quantity in cold stores in the Dominion. While one can he excused for hoping that prices will hold that should not pievent every effort being made to ieduce costs of production and further increase the output. Cheese has improved also 7 Mr Hears, a director of Empire Dairies Ltd., who is a,t present in London, declared that the recent collapse to 120 s was due to multiplicity of sellers, and by inferences he suggested that dairy factories should join up with Empire Dairies Ltd. i It is not merely New Zealand butter that collapsed in price, but also* from Denmark and Siberia, and it is hardly possible to teach the Danes how to market their butter. The collapse is due to natural economic causes , apd these are an increased world output and lower purchasing power, and butter is not the only commodity to be affected by these conditions.

The reports from Bradford,. .respect-., ing the wool market are *also ' more cheerful. Wool prices began to improve in March and these'prices have, held and give promise of going a little higher. Bradford is optimistic and this is something to the good* for there is still the wages dispute to ho settled with the textile workers. Spinners it is reported are resuming, operations and that will mean an increased consumption of tops, If these advance top-makers will be encouraged to buy the raw material and that makes the prospect for the next London wool sales which begins on May M 3 rather promising.

The top market is reported firm and as a matter of fact tops advanced during April, 40’s going up from 141 dto 15*d an,d all other numbers have gone up Id per lb. Here again exaggeration would 'be foolish. The high prices of the last two or three years are not likely to recur for some time and wool growers : must take a midway price between the lowest and highest of the season and try to bring down costs production to yield , a profit at this/ievel of values. >

The frozen meat market i 3 'unsatisfactory and it is difficult to see what is going to improve'it. Lower retail prices will be helpful, but it must he remembered that the favourable elimatio conditions in Elurope will have a good effect on European supplies., Prime Canterbury lamlb is quoted at BJd per lb which is a very low price when we remember that at one time 13cl was being obtained; - That is when the meat companies. Tost; heavily-

Producers generally must endeavour to realise that fancy prices are things of the past, and to believe that the trend of. value's is towards the pre-war level and to base their operations on that. Subsidies; pools and whatnot will not cure the position: we must wait until Europe has more money to spend and is able to afford higher prices than at present. We may have to wait a little time for this. Britain has just had £42,000,000 taxation added to. her already heavy burden.