SHARP INCREASE.

Auckland Star, Volume LXX, Issue 217, 14 September 1939, Page 14

SHARP INCREASE.

IMPORTING COSTS.

EFFECTS OF WAR RISKS.

DIFFICULTIES OF TRADERS.

Largo increase* in (ho cost of importin# ffoofla into New Zealand from Britain, America and other countries liavo occurred since the outbreak of war. In so in o instances the advances began in the fortnight before the war. and during the past 10 days the effects have been extended to cover every class of goods.

Among the factors contributing to the increases are the following: —

(1) The rise in marine war risk insurance rates from an average of J/ti per cent, to .)()/ to 100/ per cent, according to the route followed by shipping. (2) Advances up In .">0 per cent in freight charges by shipping companies. (3) Increases of from ."> to per cent in tho prices quoted by Kngiish manufacturers, due to the effects of the war demand for raw material* and labour.

(>1) Tho sharp rise in the value of the dollar in relation to sterling.

Although a number of weeks will pass before any considerable quantity of imports shipped from Britain and America under wartime risks arrive in the Dominion, Auckland merchants state that, immediate difficulties have arisen in regard to payment. It is pointed out that, the amount of the permits granted by the Reserve Bank, based on the prices and other costs ruling when applications for funds were submitted about six wpoks ago, will be insufficient to cover the additional amounts involved, and that further accommodation will therefore bo necessary. In pure! ases from Canada and the United Stntes the effect of tho dollar exchange alone is to add about J. 15 to the cost of every £100 worth of goods, and the other increases represent a further substantial addition.

Representations have been made to the Minister of Finance, the Hon. W. Xash, with a view to obtnining supplementary funds for importers, nnd an early announeoment is expected hy the business community. There is also the question of financing future shipments, for which extra funds will he required if the quantities are to be maintained 011 the basis of the import licenses nnd Reserve Rank permits granted. The increased cost of goods and the added landing charges arising from higher freights and high war risk rates will involve increased remittances, and as orders, in most cases, have been placed goods manufactured against licenses for the current period, a greater amount of sterling will now he required. Cabled advices received this week indicate that, in accepting orders, overseas manufacturers will supply only at prices ruling at the date of dispatch. They now find thomselves in a position of being unable to make definite future commitments.

While it is the desire of the Government that prices should remain nround tho present level, importers consider that, in view of the increased costs, this is impracticable. Ft is generally agreed that prevention of profiteering is essential, but increased costs, of necessity, must be pawed on.