BUTTER "BEARS."

Shannon News, 16 June 1925, Page 4

BUTTER "BEARS."

WHY NEW ZEALAND SUFFERS. WHERE WAS THE CONTROL BOARD? (By "Rusticus.") The true story of the recent butter slump has yet to he written. Information reaching New Zea- i land through private channels confirms the suspicion that a systematic "hearing" movement was engineered in Great Britain, and it has its lessons for the Dairy Control Board, which was a helpless spectator during the silent conflict. A'great and pleasant, surprise was no doubt caused butter producers by the unexpected improvement in the London butter market recently. Prices jumped from IG4/- to 172/- overnight, so to say, making the end of the season look much rosier for'the New Zealand producers.

The immediate cause has been, of course, a transport strike in Denmark, but it is evident now that this strike was by no means the sole and only reason: The strike has been settled now for over a week and prices, instead of tumbling as" predicted have actually further improved, the latest quotation for salted being 176/-. It is perfectly obvious now that information reaching New Zealand during the past fortnight was a good dial in the nature of bluff from interested parties, and the outcome of a systemvatic bearing movement in Great Britain. It was an attempt made by the wholesale and big retail merchants to force down the price of the large quantities of butter held in England on,behalf of Colonial factories, and it all but succeeded. Both wholesalers and retailers in England, have for weeks passed, just existed on a hand to hand^basis, and instead of, say, a fortnight's supply —' which would amount to approximately 12,000 tons —'being held by merchants and retailers as is usually the case, this butter had to be held by the individual factories.', Effects of Danish Strike. The results and effects of the Danish strike were much more imaginary than real. It must not be thought that Danish butter entirely ceased coming into England during the duration of the strike, because this was not so. During the whole of tlie short strike a certain amount of Danish butter continued to filter through, but what broke up the "bearing" tactics was the uncertainty and fear of a complete stoppage; Nobody could foresee how long the strike would last and everybody rushed in to cover against a heavy rise, which no doubt would have eventuated, had the strike lasted any time.

That the surplus of butter In Great Britain was more fictitious than real, is fully proved by the fact that the week following the settlement of the strike, Denmark rushed something like 4000 tons of butter into Great Britain In addition to this quantity, which is. more than double that of normal times, large quantities continued to arrive from New Zealand, Australia, and the Argentine as well as Siberia, j and yet, instead of the pessimistic forecasts of a reaction being realised values actually improved. Results of Storing in Groat Britain. 'The writer may be excused for once more pointing out the moral of storing large quantities of produce in England.- If the Control Board will persist in this practice, it will always be up against this difficulty A continuous state of war will exist between the Board and the trade, which naturally comprises a great number of speculators, and in nine cases out of ten the "bears" will beat the Board. The consumer and even the British Govern-' ment, will be on the side of the trade and such a continuous wrangle is not in the best interests of our business. - The shipping should be so regulated as to allow a free and continuous flow of our butter and cheese on the English markets without creating either glut or scarcity. Such a course will create the least friction and will gradually eliminate the speculative element which has become part of the system.