THE FLOUR MARKET.

Taranaki Daily News, 21 March 1921, Page 6

THE FLOUR MARKET.

REASONS FOR HIGHER PRICE. . THE POSITION EXPLAINED. The new position of the flour market, on which the price of bread depends, was reviewed by a New Plymouth merchant in conversation yvith a Daily News reporter on Saturday. The position is: To-day’s position in the flour market is that the Government has fixed the prices at £2l per ton, f.o.b. South, for sacks, a rise of £4 10s per ton, or a little under £d pei- pound. The local mill has been working under the new conditions for some time, and a shipment at the new rate was in the boat from Lyttelton last week, so that the rise in retail prices must now become general. The greater part of the increase is due to the Government reducing the subsidy to the miller from £4 7s 6d per ton to £4 10s per ton. It is expected that the yield will be roughly 1,750,000 bushels more than last year, but as we imported about 2,000,000 bushels, and there was no surplus to carry over, it looks as though we will be somewhat short of our domestic requirements, though the shortage will not be felt until after Christmas, The growers appear dissatisfied with the price (7s 6d basis) which is being paid, as this was the minimum they were guaranteed. They were under the impression that they would get equal to the price (9s) that the Australian Government is asking. Our authorities, probably rightly so, appear to consider this rate as a fictitious value. It is considered by some that in view of the amount of wheat available in other parts of the world that flour may fall during the year. This view at first glance appears correct, but a little consideration of the position shows tfiiat as the Government has guaranteed to buy the whole of the wheat crop at the fixed price, it is necessary for them’, to see that the millers take it off their hands without loss. It is very unlikely that they would permit millers to import cheaper wheat, nor could they reasonably permit cheap flour to come in, or the local millers would naturally refuse to buy the Government wheat. There appears to be no prospect of relief until the 1922 harvest, for which the suggested price is 5s Cd. This would mean a drop of about £5 a ton in flour, less tha/present bonus of £1 10s a ton, which.would presumably be withdrawn.