N.Z. might quit its whole butter surplus as oil

Press, 24 April 1986, Page 16

N.Z. might quit its whole butter surplus as oil

NZPA staff correspondent London The Dairy Board’s chairman, Mr Jim Graham, hopes after a tour of European capitals that New Zealand has won co-operation to sell its 60,000-tonne butter stock cheaply as oil. The butter would be. concentrated into oil and then used for the same purposes as vegetable oil, including cooking, catering, and industrial uses such as making comestics. The proposal would cost New Zealand about $lOO million because the butter would be sold at considerably less than farmers were paid for the milk, a Dairy Board official told NZPA. But the board wants the sales to go through in conjunction with big sales from the European butter “mountain” so that new prices for new butter can improve in a depressed world market. Mr Graham said the board would entirely “cut out” its reserve account, which is boosted during good selling years and drawn from in bad years. A total of $4OO million would have been spent over the year maintaining farmers’ prices and the board might end up with a deficit in the fund of

about $2O million, he said. Mr Graham has talked to Agriculture Ministers and officials about E.E.C. stockpiles which total about a million tonnes. “We have been putting to the Europeans that we should look at a joint exercise for the disposal of that along with some tonnages of their own in the vegetable oil field,” Mr Graham said. “It is an exercise in cooperation with the Europeans in terms of disposing of stocks and lifting the world butter price.” The reaction had been “favourable ... they have recognised that unless that stock goes there is no way in which the price can be lifted on the world market.” Mr Graham said the

board’s approach was not a public relations exercise staged because New Zealand faces a hard battle this year to hold on to a diminishing butter quota in Europe. “We are trying to lift our own farmers’ returns irrespective of the quota ... it is completely outside the quota,” Mr Graham said. During his tour he met senior politicians and officials including the new French Agriculture Minister, Mr Francois Guillaume, and the E.E.C. Agriculture Commissioner, Mr Frans Andriessen. New Zealand faces a difficult task in achieving butter import quotas to Europe of 77,000 tonnes for 1987 and 75,000 tonnes in 1988 — figures sug-

gested in 1984 but not finalised by the E.E.C. The task is complicated by a hostile reaction in France over the jailing of two secret service agents after the Rainbow Warrior bombing. Mr Graham said, “I do not want to make any comment about the French — that is more of a political problem, so I do not want to touch on the French at all.” New Zealand’s case for butter access was accepted as “reasonable” in the countries he visited. "Everyone recognises that if we do not get that we will simply have to take what tonnages we lose in the United Kingdom market into markets that either the Danes, the Dutch, or the French are selling in.” _