A Market Enigma

Manawatu Times, Volume 62, Issue 37, 13 February 1937, Page 12 (Supplement)

A Market Enigma

The premium on Danish butter on the London market as compared with that sent from New Zealand, following the usual trend in February, has again become most marked. This movement has been an enigmarof the butter market for many years, and commenting upon it in its last report tho Dairy Board stated that, viewed from this end, it was difficult to justify. Danish butter is normally around its highest point at this period of tho year, when supplies are at their lowest ebb, and the full weight of Southern Hemisphere butter is on the market. But the puzzling point is that the scarcity of Danish and the higher price does not appear to improve the sale of New Zealand butter in spite of the continuous efforts made by tho New Zealand Dairy Board to popularise the Dominion’s butter. At the least, a sympathetic advance might be expected. It was reported from London this week, when Danish recorded a useful rise and New Zealand again declined, that tho New Zealand market was affected by the lack of speculation among importers, restricted under the New Zealand marketing agreement, which was expected to delay recovery. The fact that New Zealand has placed the disposal of its produce in selected hands may be responsible lor the present slowness of the market. For the 1935-3(i season the highest premium for Danish was 4(is per cwt., reached in February last, and the lowest 7s. During the 1934-35 season the Highest premium Danish enjoyed was st>s and the lowest 10s. At present the premium is 31s 6d per cwt. The following table shows the wholesale prices per cwt. of Danish and New Zealand butters ruling at the end of the first week in February since 1930, together with the premium on Danish:—

It is noticeable that in 1934 a sharp reduction in the Danish premium was effected. For the greater part of that year Denmark stabilised her local price at 210 kroner per 100 kilos, approximately 93s 8d per cwt., and, with the aid of import taxes on margarine, subsidised producers out of the excess over export parity. The policy was abandoned on December 1, 1934, and at present there aro no subsidies or restrictions in connection with the export of dairy produce from Denmark.

Feb. Danish. N.Z. Danish.Prem. s. cl. 8. cl. s. cl. 1930 .... 153 0 22 0 1931 .... 115 0 27 0 1932 .... 101 0 32 0 1933 .. .. ... .. 112 0 79 0 3.3 0 1934 .... 69 6 18 6 1935 .... 90 0 30 0 1936 .... 96 6 28 6 1937 .. .. 119 0 87 6 31 6