THE BUTTER MARKET.

Taranaki Daily News, 29 November 1921, Page 8

THE BUTTER MARKET.

CONDITIONS IN LONDON. LAST SEASON’S STOCKS. DEMAND FROM CONTINENT. The condition of the butter market i| London and the prospects for the Dominion’s new season’s make were discussed recently by Mr. Hugh C. Aickin. a member of the Auckland section of the New Zealand Butter Committee. Mr. Aickin said the Athenic, with the first consignment of new season’s butter from the Dominion, had reached London but owing to congestion at the docks had not yet discharged her cargo. We were therefore still without definite knowledge as 'to the’, actual, value of new season’s butter on the London market. During the past fortnight various reports from London had been received, indicating values likely to be realised upon the actual marketing of this butter. It was encouraging that the latest reports predicted a selling value from 10s to 20s per cwt. higher than was anticipated a fortnight ago. When it was considered that Danish butter had advanced in price in the same time from 236 s to 262 s per cwt. it would be seen that the latest estimates regarding improved prospects -for our own butter *.vere quite reasonable.

PESSIMISM DEPRECATED. With reference to probable values for later and heavier shipments from the Dominion, Mr. Aickin said much depend, ed upon the judicious handling of consignments by London agents, and in this respect there should be little cause for concern. Dairy farmers received a severe shock when advance payments for October were fixed by leading factories at Is per lb butter-fat. This reduced advance was necessitated on account of London agents limiting their advances against consignments of butter to Is per lb. Producers should not be discouraged at this evidence of foresight on the part of their London agents, as it was a clear indication of financial adjustment in their knowledge that consignment in all probability would need td be held during the flush of our shipments for some considerable time before it became possible to %ell at a figure approximating the tyue market value of our butter. Nothing would more surely create a slump in values than forcing the sales of 500.000 boxes of butter estimated' to arrive in London from New Zealand and Australia, during the latter part of Pecember and the middle of January. The financial stability of the Dominion, continued Mr. Aickin, was largely dependent this season upon the realisation at satisfactory prices of our dajry produce. Every''remedy therefore should be sought to fight that contagious disease “pessimism" that was taking hold in some quarters. Australia was seriously affected by it, and was offering to sell butter at the equivalent of Is l>Vd f.ob. for present loadings, when their new season’s make now in London was sell-

ing at 4£d per lb higher. The fear of competition from butter stocks held by the Imperial Government was evidently the cause for the action of Australian dairy companies, but it seemed the height of folly to anticipate Government action and its effect at so serious a loss. Fortunately New Zealand factories in the main were consigning, and sound handling of their produce in London would cofirm the wisdom of their policy. UNEXPECTED EUROPEAN DEMAND. Referring to the large accumulation of last season’s butter in London, Mr. Aickin said there was little doubt thi>t in the absence of Imperial stocks, returns for butter this season would not be seriously below the price ruling last year. This was demonstrated by offers from London hist August to purchase outputs during October at 2s Id per lb f.0.b.. when it was the general opinion of the trade that the Government would have cleared its butter stocks by the middle of October. Sales were checked, however, through the Government increasing its price from 192 s to 262 s per cwt., and subsequent reductions had not assisted a clearance owing to free butter reaching London from Australia and selling below the Government price. s “Evidence is accumulating.” said Mr.

Aickin. “that of nearly 30,000 tons of outer held by the Imperial Government, no more than 20 ; 000 tons are o-f a quality that could be sold in competition with oar own and. Australian fresh make, the balance being suitable for manufacturing purposes only- Apart from this, it is evident the Government will endeavor to realise as high a price as possible, and the reduction in price that it was expected would bo brought into operation on November 11, hits been deferred for at least a fortnight. The reason for this was 1 a sudden demand from the Continent for butter supplies, and London reports since to hand, indicate that fair quantities o-f Government stocks are being disposed of tn this quarter. This unexpected demand from Europe for butter so early in their winter should dissipate much of the pessimism regarding the future. Information is anxiously awaited as to the strength of this demand, but if these purchases indicate a butter shortage on the Continent, it looks like an excellent, outlet for not only Government butter, btit much of this season’s colonial arrivals as well for the next three months at least. MARKET IN AMERICA. Referring to the American demand for New Zealand butter, the speaker said the absence of shipping facilities from New Zealand to America stood in the way of shipments in large quantities to that market direct from New Zealand, but as there was a good inquiry, just now; for our butter from America, London agents would be in a position to supply it from stocks arriving, provided the butter was manufactured here to comply with American conditions. Mr. Aickin emphasised that the representatives of the New Zealand butter producers should stand firm for the best return from the best' market. “Firmness on their part,” he added, “cannot prejudice their position, but will tend to strengthen outside markets and other* centres supplying them, whereas vacillation and any attempt to force sa.es ahead of their neighbors will ruin all prospects for obtaining satisfactory values for New Zealand butter. As stated before, the Dominion largely depends upon satisfactory returns from the sale of our dairy produce, and a grave responsibility devolves upon those handling this produce to exercise sound judgment in their methods of marketing.