EXPORTERS ADVISED NOT TO CUT PRICES

Press, Volume CVII, Issue 31539, 29 November 1967, Page 1

EXPORTERS ADVISED NOT TO CUT PRICES

tv Zealand Press Association) WELLINGTON, November 28. Where New Zealand was already selling her products successfully in overseas markets, and selling as much as it could produce, exporters and the country could suffer if prices were reduced, the Acting Minister of Overseas Trade (Mr Taiboys) said tonight.

Commenting on the effects of devaluation, Mr Taiboys said the main benefit to exporters would be increased income in terms of New Zealand currency.

“This will be important, not only to farmers, manufacturers and others who produce our exports, but also to the nation’s economy in general,” he said. A second important effect would be to make some products more competitive in overseas markets, and thus new exports would be encouraged. “It is important not to confuse these two effects,” Mr Taiboys said. It was unlikely that devaluation would result in the sale overseas of appreciably greater quantities of meat and dairy products. The same was probably true of wool at the prices which had prevailed in recent weeks, and it was equally true of byproducts of the meat industry, such as tallow, hides and skins. Thus, for over 90 per cent of New Zealand's exports there would be no advantage by reducing prices in overseas markets. Buyers’ Pressure Turning to manufactured goods, Mr Taiboys said there could be too great a tendency

for exporters to consider uncritically the possibility of lower prices for exports, though there would certainly be pressure to this end from overseas buyers. It was difficult to generalise on a subject such as this, but exporters should look carefully at the results of lowering prices, Mr Taiboys advised. Where lower prices would mean additional sales, then it was obviously in the exporters’ interest to work out the effects of such a policy and to decide accordingly. But if lower prices did not mean additional sales, pres-

sure to cut prices should bs restricted. Devaluation's main role in increasing exports would be in making a wider range of products competitive on overseas markets. “Many exporters, particularly the newer exporters, will wish to consider these matters of pricing policy,” Mr Taiboys said. He suggested that should they want advice or additional information, they should consult the Overseas Trade Division of the Department of Industries and Commerce, particularly through its export liaison officers.