COMMODITY MARKETS AND PRICES.

Manawatu Standard, Volume LX, Issue 156, 1 June 1940, Page 5

COMMODITY MARKETS AND PRICES.

UNSTABLE MARKETS. (By “Penloo.”) The gravity of the war situation ia absorbing the thoughts of the people and some rather weird proposals are being made by newspaper correspondents. The war situation is not what any of us would like it to be; yet it is not so desperate as to warrant yielding to foolish sentiments. In the present, state of the public, all thoughts of markets and market prospects are relegated to the background. Yet if people gave a little more consideration to markets and their structure, their characteristics, and the other factors associated with them, we would not have so many weird proposals put for-"' ward. In a market there must be something to sell, and that something must be produced, manufactured, discovered, or invented. A good deal depends upon primary production, particularly of foodstuffs and raw materials. If foodstuffs are scarce and dear, or if raw materials are dear, then costs advance and the finished product is also dear. Primary production, whether, of foodstuffs or raw materials, is not subject to control, for these things come mainly from the soil, and while Nature is bountiful, the conditions must be favourable for her lavishness. In this respect, the weather plays the leading part, and the weather is beyond control. Quite a number of people are insisting that in this war period we 'must produce more. There has never been a time in our history when it was not necessary to produce more. But if, it is implied now in the demand for increased production that farmers should work longer hours, that is foolish. The principal products that we can send overseas are dairy produce, meat, and wool. Their production cannot be increased to order. If we want more dairy produce we must milk more cows, and if we want more mutton and lamb and more wool we must have more sheep. These products are not obtained immediately from tbe soil but from cows and sheep, and to secure increases of live-stock takes time. It is possible to grow more cereals by extending the area devoted to their production. It will be seen that primary production cannot be increased to order, but farmers can be given effective assistance by supplying an abundance of labour at reasonably low wages. I<armers have been complaining for a long time'about the scarcity of labour and most of what is available is indifferent in quality. Tbe only other way in which we could help is by sending more men overseas to join the hrmg line. That is more or less a political matter and not one for discussion here. AUSTRALIAN PRODUCTION.

Australia appears to be increasing her exports 01 rood products for. theie has been a substantial niciease in the output of butter and cheese, pork ant eggs, just tile kind of foodstuffs Britain’ needs. Australia has the available country for increasing production, but Australia is more uependent upon weather conditions than even we are for a drought soon decimates the live-stock. The British Government’s commandeer of our p rim ary products is for the duration ol the war and for a limited period thereafter. This is ail excellent provision:, for when the war ends the markets will be upset. The British Government is bound to finish the war with reserve stocks in hand as was the case after'-the last war. On j that occasion there was a huge amount of dairy produce alid wool in store. The dairy produce was sold m London, and as the people had been living largely on margarine the chance of buying real butter -was taken advantage of and the huge stocks soon melted away. It was somewhat different with wool. There was a good demand for the fibre, but the quantity available was large and it was estimated that stocks in hand were equal to two years’ consumption, and another clip was coming into the stores. There should not be the same difficulties when the present war ends. AVool is going rapidly into consumption now, and'thero is not likely to be much ’of a carry-over. However, the British Government will bo responsible for wool for a year after the war. ends, and during that period growers and brokers should be able to make any adjustments that may be necessary to meet the then conditions of the market. .. • Raw materials, which are mostly war materials, do not show any advance. For example, American middling cotton is quoted in Liverpool at 7id per lb, and it lias been quoted at I2d per lb in the piping times of peace. The fact is there is in tins war no scope for profiteering. The British Treasury. commandeering the whole of the excess profits, and therefore there is uo inducement ,to earn more than normal profits and that is helping to keep down prices. Metals show normal fluctuations in the London metal markets, where supplies from all sources gravitate. Pigiron is quoted at about Ills per toil, which is by ho means high in view of the enormous demand there must be. Wolfram comes mainly from China, and although that country is at war, it manages to get supplies sent to foreign markets. Britain is making strenuous efforts to maintain her export trade, and as there is a particularly strong demand for coal at present special efforts are being made to increase the output to 200,000,000 tons for the year.. If this is achieved it would be a record for the British coal industry. ' • , The share markets are probably more affected than others. What little business is doing oil the Stock Exchanges is mainly in Government securities and low-priced shares. Activity is not to be expected until news from the front gives a. more favourable outlook.