COMMODITY MARKETS AND PRICES.

Manawatu Standard, Volume LX, Issue 115, 13 April 1940, Page 12

COMMODITY MARKETS AND PRICES.

TRADE FURTHER DISTURBED. (By “Penloo.”) The invasion of Denmark and Norway by Germany makes another rent in the fabric of international trade, it will have an immediate effect on Britain by stopping certain food sup-1 plies from the two invaded countries, and that was admitted by the Minister of Food in the House of Commons. I But that will not greatly disturb the food situation in Britain, for the re-| serves are very large. In the mean-; time the Norwegian fisheries must be held up, and that must later affect | the supply of sardines and sild, which come mainly from that country. The immediate effect of the German occupation of Denmark must be to bring to a full stop Denmark’s trade in dairy produce and pig products. Germany is plundering Denmark, making the excuse of military necessity. As these food products are exported mainly to Britain the latter will be the sufferer. Now the question is how will this affect the dairy industries of Australia and New Zealand. Britain has in store large supplies of butter, and consumption is below normal, because of tho price factor. Although the butter ration lias been doubled to eight ounces, experts in the trade do not expect the consumption to average more than five ounces, while imports are steadily increasing. On the othci hand the new season for Europe is just beginning, but if the supplies from exporting European countries are not available the reserve stocks would soon lie broached. To check consumption the ration may again have to be restricted and probably the price also may have to he raised. This would be a gain for margarine, the consumption of which is bound to increase because of its relative cheapness. But here another question arises. Britain has bought the whole of the Norwegian whale-oil output estimated at 2,900.000 barrels. This whale-oil is an essential raw material in the manufacture of margarine, and if only a portion of the quantity purchased has been delivered the price of margarine may have to be raised. This presupposes the continued occupation and control of Norway by Germany, which does not seem likely. In any case the position should be carefully studied by our dairy farmers,_ for it seems that increased production would be profitable in a high degree, besides being an impressive patriotic gesture. Pig breeders also would be doing a great service if they would increase the supply of pork and of hams and bacon. The slogan for the present time is ‘‘increase production of foodstuffs Apart from this disturbance to trade in tile Scandinavian countries international trade is being carried on as well as possible. The blockade of German trade has proved very effective, and the war trade agreements entered into between the Allies and neutral countries has been a helpful factor. Holland, for example, has prohibited certain exports to Germany in accordance with the agreement with Britain. It would not be correct to say that Britain is not profiting by the blockade. Germany’s seaborne trade lias been brought to a standstill, and neutral countries which have been dependent upon her lor supplies are now forced to look mainly to Britain. In respect, of coal. Italy has l>een buying largely from Germany, and now that country must look to Britain for supplies. And in Britain special efforts are being made to intensify the production of coal, especially to supply the neutral markets hitherto supplied bv Germany. ' Apparently the war has not affected American export trade, for during its first six months America’s exports creased bv 33 per cent., from 1.450.000 000 dollars to 1,949.000 000 dollars. But this obviously includes war material supplied to Britain and l 1 raneefor it is stated that the Allies absorbed 24 per cent, of the total exports. This is a temporary trade, and should presently liegin to ease off. The Allies are not importing grain, fruit, timber, petrol, and motor-vehicles from America This is making it easier for them to ’ pay for the war materials they need. Britain stands a good chance ol capturing a large share of the trade of the Balkan States through the State-sponsored company, the English Commercial Corporation. Ltd. Germany has been endeavouring to force Rumania to trade with her, lint the best that Germany can offer in payment is “blocked ’ marks. That is, whatever Rumania sells to Germany the payment is credited to ail account, and tho credit must be spent in the purchase of German goods._ The Allies on the other band pay in cash or in foreign credits, which enables the other exporting country to make purchases wherever it ma,v please. Ihe Balkan States that have been trading with Germany are saturated with German goods and do not want more. This is the nuisance of barter trade, which, however, has been very useful to Germany. The trade of the Middle East and the Far East is about normal, depending very largely upon transport facilities. Germany was reported to have bought considerable quantities of rubber, copra, and palm oil in Batavia, which was to be transported to Vladivostok and then railed across Siberia and Northern Europe to Germany. The. Dutch have put a stop to this and it is not unlikely that Russia has consented.