NO HELP.

Auckland Star, Volume LXIV, Issue 29, 4 February 1933, Page 13

NO HELP.

FLAX PRICES DROP. I

EXCHANGE MANIPULATION.

BENEFIT TO LONDON. (By Telegraph.—Parliamentary Beporter.) WELLINGTON, this day. ' Within a few days of the exchange rate being increased by 15 per cent, the f>rice for New Zealand flax, in London was reduced by a similar amount, the result being that New Zealand exporters will not receive the benefit of the premium, but the purchasers will pay less, the difference being made up by the residents of the Dominion. The position is being investigated by the Minister o£ Agriculture, the Hon. C. E. Macmillan. Commenting on the subject last night, the Minister mentioned that his inquiries had not yet been completed, but he drew attention to the fact that the High Commissioner's quotations, received on Tuesday, stated that the market for New Zealand flax was easier on account of tho exchange, and that, similarly, tho market _ for Manila hemp, produced in an American possession, where the exchange was quite a different proposition, was also easier on account of the exchange. Collapse Anticipated. One of the largest exporters of flax said to-day that he received the following cablegram on January 25: "Market quiet; £12 10/ for fair. Anticipate collapse owing to exchange. Buyers apathetic." This represents a decrease of £1 a ton in the nominal quotations. It was also learne<T that cablegrams had been received by Auckland merchants reducing the price, owing to exchange, by 30/ to £2 a ton. v "It is a most ludicrous position," said a Wellington exporter to-day. "They are simply depressing the price in accordance with the increase in the exchange, so that the New Zealand grower gets just what h© was getting before, while the people of the Dominion have to pay the premium for the benefit of the London mcrcliant." Benefits Disappear. Flax prices were disastrous to-day, lie added, and any hopes that the industry had of receiving a benefit from the increase in the rate of exchange were removed by this action in London. Aithough he was an exporter of flax and wool, he did not think that the rise in the exchange rates would bring any benefit at all, for although prices for wool had. temporarily benefited, they would soon be forced back to the level ther would have been had there not been an increase in the rates. He predicted that the oversea buyers would merely take advantage of the exchange in the same manner as the flax merchants had done in England, and the citizens of New Zealand would be forced to pay the premiums, while, if the exchange had not been raised, wool prices would have risen of their own accord.