TRADE REVIEW

Dominion, Volume 16, Issue 87, 9 January 1923, Page 5

TRADE REVIEW

OPTIMISTIC FEELING IN LONDON GOOD OUTLOOK FOR WOOL BUTTER AND CHEESE MARKET STRONG There is an optimistic feeling in London regarding the trade prospects for 1923. A satisfactory feature has been the stability of the level of commodity prices during the past year. The outlook for the wool market is good, there being a greatly increased demand for better-class fabrics. The butter and cheese market Is strong and higher prices are probable.

BY TELEGRAPH— I’BKM ARROCIATIOI. } —COPYRIGHT. (Rec. January 8, 5.5 p.m.) London, January 6.

Tho New Year opens with an optimistic feeling regarding the improve'ment of trade, for which there appears to be considerable justification. Ono of tho most satisfactory features has been the stability of the level of commodity prices, as recorded m the “Economist.” During tho whole of 1922 tho greatest percentage of change was only 9.4. and at tho end of the year the index figure was practically the same as at the commencement. As “Barclay’s Bank Review” points out, the importance of this freedom from violent fluctuation can hardly be exaggerated. It greatly simplified tho problem of liquidation, which remained from the inflated boom of the early post-armistice period and largely removed the natural hesitancy of buyers. Twelve months of relative price stability also enabled much progress to be made in the readjustment of the costs of production to the altered scale of international competition. Wages have been reduced in some cases more drastically than desirable, but profits alsd have been reduced drastically, and the comparison between these two factors in costs is no longer open to the criticism which was in some cases justified during the artificial prosperity of 1920. Stock Exchange Confident. Tho Stock Exchange opened the New Year with a decidedly. confident tone, and the reparations crisis had no appreciable effect till yesterday, when news of the breakdown of the conference caused some selling by in-and-out operators, who hastened to take profits when they had accrued. Bu fol the greater part of the week the ease of the monetary conditions and the largo amount of money Coming forward for investment outweighed political influences, and there has been considloirable activity. Indeed, some large blocks of shares, especially industrials, had been readily absorbed by the public, and thia is regarded as a clear indication of the prevailing optimism covering the general prospects for the current year. Increased Demand for Wool. Commenting on tho wool position, a London wool importing firm points out that there is increased consumption per head of tho population in all woolusing countries corresponding to the higher standard of living, and■ due partly to increased wages and shorter working hours. Another factor has been the emormou? increase in the employment of women m clerical and similar undertakings in recent years, resulting in a greatly ncreased demand for botter-class fabrics. ihis Is likely to be permanent, and justifies the conclusion that the world s wool requirements have for the present outstripped the total annual production. The present position of prices would therefore seem to bo justified, especially in view of the higher level of commodity prices generally.

Higher Prices for Butter and cheese Probable. The butter market is displaymg groat strength. Although over 2<O,(XX) boxes have arrived this week from Australia and New Zealand, and the quantities afloat bound to Britain from these countries are about 894,000 and 584,000 respectively, the market has been strengthened by cabled reports of the dry weather in New South M ales and Queensland. But the principal cause of firmness is tne splendid consumptive demand, which so far has not been affected by the increase in the retail pried to Is. 10d. per lb. This price gives th© retailers little oi no profit, and an advance to 2s. per lb. is probable next week. Possibly thia may seriously curtail the demand, but the quality is so good that many consumers will continue to purchase. Another feature of strength is thd Continental demand, which is absorbing the greater part of Denmark s output, as the United States appears to have stopped buying Danish and is taking New Zealand instead. It is reported here that the United States has purchased 150,000 boxes of New Zealand for direct shipment. The cheese market also is strong, owing to short supplies. It is estimated that the available stocks ot nt! cheese are only about one-quarter of what they were last January, and as the prospective supplies of imported cheese appear to be considerably below tho average consumption, high prices wul probably continue. The retail price at present is Is. 2d. per It>., and an advance of 2d. per lb. is pro-bable.—Aus.-N.Z. Cable Assn.