The Press SATURDAY, FEBRUARY 27, 1965. British Butter Imports

Press, Volume CIV, Issue 30686, 27 February 1965, Page 14

The Press SATURDAY, FEBRUARY 27, 1965. British Butter Imports

If the increased butter imports proposed by Britain reduce the price of New Zealand butter there by no more than 10s per cwt, New Zealand will not fare badly. In 1964 New Zealand butter fetched 335 s per cwt until September, when it rose to 3505, to average nearly 340 s for the year. Higher retail prices in the last few months have reduced consumption in Britain, and stocks have risen. Some increase in permitted imports had been widely expected, with the prospect of a weakening in wholesale and retail prices. Confirmation of the proposals will hasten this trend, although it should be emphasised that total supplies on the British market will be increased only if the expected rise in British production does come about, and if the supplementary quotas are filled.

The total consumption of butter in Britain last year was about 470,000 tons. The basic quotas for the coming year and the supplementary licences, with the expected British production, provide for a maximum of 510,000 tons this year. This weight of supplies could reduce the average price for New Zealand butter to about 330 s per cwt —only 2s above the cost, of delivering lewt of butter to London. That margin would be too fine for comfort; but any drop in British production or failure by any exporting country to fill its quota would be reflected in an improvement in price.

New Zealand's basic and supplementary quotas in the coming year could total more than 190,000 tons. Our exports of butter to all markets last year were 189,000 tons, little short of the record 193,000 tons shipped in 1959. Though butterfat production is running 5 per cent ahead of last year’s figures, New Zealand will scarcely be able to fill the British quota and provide the usual 12,000 to 14,000 tons of butter for other markets without diversion from other products, such as cheese, which is a profitable line. Because of the apparent determination of Britain’s new Labour Government to hold food costs, the New Zealand dairy industry faced the prospect that even bigger quantities of butter would flood the British market this year. New Zealand’s negotiators have done reasonably well in the circumstances.