A LUCID REVIEW.

Dominion, Volume 1, Issue 274, 12 August 1908, Page 3

A LUCID REVIEW.

THE CAUSES AND THE, OUTLOOK. SPLENDID RAINS. Referring to the advance to .Is. 9Jd. wholesale, the Sydney Daily Telegraph " of August 5 said: — . ■ \ ._ ..... ' . . , ' "The chief cause of" this tremendous vance lies, it is said, in tho_ fact that all Victorian supplies for a long time past have, owing to the severe drought there, been reduced to a veritable minimum, and that Stato has been-drawing on-our markets to fill its requirements. , In. fact, from certain of our South Coast' districts, the butter produced has gone direct to Melbourne, never coming on this market at all. This has naturklly drained our resources. It must also be remembered that our-South .Coast districts have recently passed through bad seasons, with a great dearth. of • rain and scarcity of food, and a correspondingly decreased output of milk. Australia,'asia whole, has not suf-fered-from drought to anything like the extent it did in 1902, yet the price, of butter is higher, whicli would point to a greater shortage. " , - . . '.' But there-is another factor which is doubtless having ,some ..effect upon tho position, and that is the increased demand anticipated both in Sydney and Melbourne, when tho American Fleot is here. That thero will be a rush of visitors to both centres during the festivities is assured, and naturally tho demand for all genoral commodities,' butter included, will increase; whilo there " will doubtless be additional .supplies required • for the fleet itself while in port, with a possibility of. its laying in some supplies before it leaves Australian waters. Famino Prices Would Not Last Long. '•'The trado here yesterday wero of the opinion that these famine prices would not last long. If anything should help to lower the market it is tho splendid rains which havo just been experienced all along our coastal districts. "Naturally there has been practically no exporting going on with such high, rates ruling internally. Last week only 53 boxes were shipped away from Sydney, and during all' July the total was only 760 boxes. At present prices it would pay to rc-sliip butter back from London, for there is a difference of 84s.'per cwt. in favour of our price, London cables last Friday advising the price of choicest- Australian butter' there at 116s. against our 200s. per cwt. "When seen early yesterday, before any intention had yet been expressed of raising the prico to its present level, a Sussex Street butter merchant outlined tho position in tho following-terms:'— •• No Corner. "Butter is dear, and it's going to bo dearer. Everything hinges on the Melbourne market at the present time, and when Melbourne makes a movo we all have to follow. If we did not the New South Wales factories which send, their butter to us on consignment would "ship' to 'Melbourne direct. As a matter of fact, many-of; the South' Coast factories aro already doing so, and a regular cargo service has been set up he-

'tween Eden and Melbourne. I have received private advice that the wholesale price in the southern capital 'to-day is Is. 10d. per lb., while there is every prospect of a further advance to 2s. That means that Sydney must riso in sympathy to within a penny, or twopence at tho most, of those prices.; "I do not think it is true that anyono is trying to 'corner' the market in anticipation of a rush of orders during, th.o visit of the American Fleet, though it is very probable that many grocers are cold-storing a few boxes on their own account. : The Rise that Precedes a Fall. "When -tho-prico of butter reaches a certain': point speculation becomes too risky to be indulged, in. ; It is like building a tower of dominoes. Up.' to a certain height it is steady onough ;■ but each addition after makes the structure less secure, till at last : th'e whole thing comes tumbling down, lhat is what everyone-knows must happen eventually in the butter market. When tbo price begins to fall, as the warmer weather brings supplies in more freely, it will fall like a shot, and values will case 10s; to £1 per cwt. with cach backward movement. .1 doubt, however, if it will bo as cheap as it has been this year and last year for a long time to come, owing to the depletion of dairy herds in Victoria during the drought. THE LATEST. SYDNEY PRICES FALL 40s. PER CWT. FURTHER DROP LIKELY. (bt telegraph—press association —COPYRIGHT.) (Reo. August 11, 10.25 p.m.), • . Sydney, August .11. The dairy merchants,'- following the example of Melbourne to-day, dropped the price'of" butter by4os.'per cwt. ■ ; -A further decrease is expected beforo the end of.the week. . . Heavy supplies are coming forward.' ."