THE PRICE OF WHEAT. (Christchurch Press.)

North Otago Times, Volume XXXVII, Issue 8176, 7 May 1895, Page 4

THE PRICE OF WHEAT. (Christchurch Press.)

It is incrediblo thab anyone with eveu ft superficial knowledge of the subjecb can doubb thab the fall in the price of whoab of late years has beon mainly cau q ed by an increased production and accumulation of stocks, but our esteemed correspondent, Mr Grossnrnnn, is apparently so wrapped up in his binietaliist theories thab he overlooks tho really important factor — bho operation of the law of supply and demand. For ourselves mo confess thab we do not understand Imw anyone having any knowledge of the commercial instincts of the world can fail to realise thab production and consumption chiefly control values. In regard to wheat, the latest figures, namely, for March, 1895, gives the world's crop ah 321000,000 quarters for 1891, which raakos an average for the lasb live years of about 308,000,000 quarters, ngainsb an avernge of say 280,100,000 quarters for the previous five years. In 1891 and 1892 the Unit°d States crop was over 700,000,000 bushels for the former and 600,000,000 for the latter year, Her average in previous years was under 4,10,000,000 bushels. Tho " visible supply " is but an item in the calculation, the "invisible" being invariably far in excess of the ' visible." The large Argentino exports in 1894 may have been made " possible " by the gold premium, but they certainly would have been '• impossible " unless the wheat had been grown. The fall in prices reached bed rock by October, 1894, by which time the trade had arrived ab a fair idea of the magnitude of the 1 world's " crop. The eflecb of the filling prices was to discourage wheat /rowing in tho Argentine as well as in other "pnvin of tho world, with tho resulb thab it is now known tho Aigon(ico crop recently harvested was from i smaller acreage than the previous year's, and the authorities leport a considerable shrinkage in Hie acieaga of tho crops now growing in Russia, tho United Stit^s, •and olsowlier j . Already the prospective decrease in production is adooting prices, which shows clearly how sensitive tho trade is to the law of supply and de m ind. The following ofliciul returns o' the American "visible," " Ocean sisible," and " U.K. sbocks " do not show nny material falling off in the " visible" supply during the past tive yews in America and thaU.K. •"ho figures being for January yth in rach year: I^ol. 1302. 1593. ISOt. IS')') Million Million Million .Million Million 1!uOil1s ISuJivN. Bdslicls. Uihlicls. Jiushelrf. W 102 133 110 133 ''hat tho Argentine haa increased her whetr production enormously during thepistfew years is true, but the cause is due to the development of a new country. Tho following figures, however, do not show that Russia his increase 1 her wheat production by aid f a piper currency during late years, 'n 18SS her yield of wheat was offichlly given at 31 3,000,000 bushels, In 1891, when her ciop was a failure it wag 175,000,000 bushels,— whoat rose 8j per quarter owing to tho reiuced supply— and in 1891 it is givoa it 30 1,000,000 bushels. If the world's crop for 1895 proves ( o be much under 300,000,000 quarters, we shall see a rise of over 103 a quarter, even though tho " unfair advantage" now obtained by Russia ind the Argentine continue. Tho wheab consumers in the world are steadily but surely increasing, and Mth only moderate crops for a couple of years the consumption will overtake Mioproduc'ion, and so bring about a substantial rise in price without tho \dventitious aid of biractUlism. We fear our rodders are well nigh tired of these discussions aboub whoat, but if correspondents will write to \\z expressing their disbelief iu such universal y accepted principles as the working of tho law of supply and demand, a reply is in somo measure forced upon ui.