Fall in Danish

Sun (Auckland), Volume 1, Issue 96, 14 July 1927, Page 10

Fall in Danish

Butter on Bargain Counter

NEWS of a pronounced drop in the London price of Danish butter has created great interest in the dairy produce trade in Auckland.

After maintaining a constant level for a long' time, Danish butter is now quoted at 150 s per cwt., a figure at which it is seriously undercutting the New Zealand product.

A CCKLAND merchants are now perplexed, and cannot accurately forecast what the result will be. If the price of Danish butter continues at the reduced figure, New Zealand’s produce must follow with a corresponding drop. At the beginning of the week New Zealand butter was quoted at 1625, against Denmark’s 15Ss, but since then Denmark has fallen by Ss and New Zealand by 2s. Followers of the market consider the fall in Danish is due to a glut of Danish butter on the English market. To clear surplus stocks the Danes are conducting a bargain sale in butter, only they are doing it on a scale rarely attempted hitherto. DANES SELL FREELY “At 1505,” said one merchant this morning, “Danish butter will sell freely, and will adversely affect the sales of New Zealand produce. A rise

or fall of one penny a pound in the retail price of butter in England makes an enormous difference to the consumption, and the cheaper butter

To meet the price-fixing instituted by New Zealand during the control era, the Danes introduced the datestamping system, whereby different consignments of butter were stamped with the date by which they must be sold. This assured a steady flow of supplies from the producer to the buyer, but local observers hold the opinion that now, when an over-supply of Danish is evidently available, the date-stamping system may react prejudicially on the producrs. In the meantime New Zealand producers may suffer momentarily through a sympathetic drop in returns, but it is considered an immediate swing of the pendulum the other way will follow. Heavy rains experienced in the recent Continental season have probably stimulated Denmark’s production in the same manner as unusual moisture did in New Zealand last summer. To counter over-produc-tion the Danes now seem to be clearing their stocks at cut prices. When this spasm of sacrificing is ended, the market, it is thought, will quickly assume a normal tone. Stocks held in London, and available for disposal, will then be of more moderate quality, and New Zealand butter will hold its own. SUPERIOR QUALITY

Even in the present situation there is comfort, for New Zealand, in the reflection that the superiority of this country’s produce is manifested by the higher prices maintained. Merchants say they could gauge the position, and estimate developments more accurately if they knew what stocks of New Zealand butter were held in store in London. As it is they are in the dark owing to the Control Board’s policy of not giving out detailed information. Ostensibly, of course, the board is out of existence, but in actual fact it has handled all butter shipped from Auckland up to the present, though the next shipment, to leave by the Huntingdon on July 22, will probably be handled by private agents nominated by companies concerned. Summing up the situation, a produce merchant said this morning: “We are not surprised at the fall in Danish. We have seen the Danes do that sort of thing before, and if, as seems likely, the sales ease off the peak stocks of DanTsh butter, the effect will be very beneficial in New Zealand.”

will naturally benefit by extended sales.”