SHARP RISE IN BUTTER

Dominion, Volume 32, Issue 92, 12 January 1939, Page 12

SHARP RISE IN BUTTER

New Zealand Up To 122/- A Cwt.

POSITION OF STOCKS

By Telegraph. —Press Assn. —Copyright.

LONDON, January 30.

The butter market is firm. Reports that the weather is lessening production in Australia are leading to an accumulation of stocks. New Zealand, choicest salted, 1-2/- a cwt.; unsalted, 124/- to 325/-; Australian, salted, 321/-; uusnlted, 123/-; Danish, 343/-.

The latest quotation-of 322/- a cwt. for New Zealand butter represents a rise of 5/- since last Friday and 10/- since December 31. The lowest level _of last year was reached on November 25 when the quotation was 303/- to 104/- a cwt. The present price is 10/- a cwt higher than that of a year ago. The London equivalent of th« New Zealand guaranteed price is 124/3 a cwt. Stocks of New Zealand butter in Loudon have risen to more normal proportions following discharge of the Rangitiki's shipment, which was completed on December 31. At the close of the year they had fallen to .3829 tons, mainly because of an interruption of .shipments caused by the waterfront dispute at Auckland. At January G stocks had risen again to 4229 tons, against 3375 tons a year ago. In addition to the Rangitiki the Mataroa and Doric Star, two of the first ships to sail from Auckland after the delay, commenced discharge of butter on December 29, while the Mahia, whiejt sailed finally from Bluff, commenced the discharge of her butter on December 31 and finished on January 3. Sales since the holidays have shown a marked increase. Deliveries from store last week totalled 2185 tons, compared with 455 tons in the week following Christmas and 1028 tons in the week ended December 23. In the week ended January G, 3938, deliveries, ex store, were 3970 tons, while in Christmas week, 3937, the output was 944 tons. The Imperial Economic Committee’s estimate of stocks of all butters in store was 509,308 boxes (3.2,732 tons), agaiust 238,787 boxes (5972 tons) a year ago.

EXPORT PRICES

Decline During Last Year

One of the most unsatisfactory features of the past 18 months has been the way in which export prices have fallen from a peak of 143.3 in April, 3937, to 92.7 in November, says the latest circular of the Bank of New South Wales.

The index has fallen consistently since April, 3937, mainly because of lower prices for wool, wheat and metals, though small improvements have been recorded from time to time. lu view of the importance of these three commodities in Australia’s export trade this fall in their prices is serious. In December, 3937, a temporary strengthening of the wool market did no more than steady the index for one mouth.

A slight improvement in the butter and wheat prices early in 3938 caused the rate of fall to slacken slightly, but .the improvement could not be maintained and prices fell sharply once more. In July slightly better prices, mainly for wool and wheat, caused the r first inereave in export price of any importance since July, 1937, but since then, however, wheat, meat and butter prices have fallen considerably, while wool showed a small short-lived improvement in September which caused the index for that month to rise slightly. Though movements in export prices are of great importance, concentration upon this index alone its apt to convey a misleading impression of the true position, for the export price index, being designed to show movements in prices, makes no allowance for fluctuations in quantities exported. This is shown in the period since prices began to fall in May, 1937, when, though prices fell some 25 per cent, from June, 1937, to June, 1938, total export receipts for the year ended June, 3938, were only some 3 per cent, lower than in 1936-37. Consequently in order to give a more accurate idea of tlie position a graph of Australia’s export income is published. An examination of this graph, from which seasonal variations have been removed, shows that there have been considerable divergencies from the graph of export prices during the past few years, and for the most part these can be explained by variations in the quantities shipped. The significant feature is that though export prices have fallen rapidly export income has remained relatively stable. A fairly sharp decline was recorded toward the end of 1937 which was probably caused by over-optimism on the part of producers and also by the fall in prices from the high speculative level of earlier in the year. Early in 1938 it recovered considerably and recently has shown a tendency to decline, due largely to the fall in wheat prices and also to the lower returns for wool caused by the lower prices and reduced volume of sales. Both Australia and New Zealand rely very largely for their export income on a limited variety of primary products, but the relative importance of tlie various commodities is by no means the same. Tlius, much reduced values for wool and wheat, the two principal export commodities in the Australian index,’have primarily influenced tlie almost continuous dir cline during the last 18 months. New Zealand, on the other hand, depends more on dairy produce, particularly butter, prices for which have not declined nearly to the same extent, as wool and wheat prices. But wool exports play a fairly important part, in New Zealand's export trade, and lower wool values were largely responsible for the rapid decline in tlie export price index late in 3937 and early in 3938, though the decline of butter prices to previous lower levels, following the rapid but temporary advance in November, 3937. assisted the decline. In March and April the downward trend was checked by a steady improvement in butter prices and the index recovered some of its lost ground till June. The fall, however, was again resumed in July and August under tlie influence of a general weakening in dairy produce, nieyt and wool prices, bur some improvement, particularly in wool values, once more reversed tlie trend in .September. Prices for most meats, with the exception of mutton, remained fairly firm up to September, but prices for other less important commodities such as tallow, hides mid skins, which are substantially lower in value than a year ago. showed a general weakening tendency.

WESTMINSTER BANK DIVIDEND Decline In Net Profit By Telegraph.—Press Assn.—Copyright. LONDON, January 10. The Westminster Bank has declared a profit of £1,557,162. compared with £1,750,589 for last year. Dividends are declared on the £4 shares, £1 paid, at the rate of 18 per cent, per annum, and on the £1 shares at 12>) per cent, per annum. Last year (he Westminster Bank, which is one of the "Big Five" joint stock banks, paid 18 per cent., plus a bonus of 2 per cent. 'l'his bank has paid 18 per cent, regularly since 1931, the pre-depression rate being 20 per cent. Colombo Tea Market By Telegraph—Press Association DUNEDIN, January 11. Mr. L. M. Wright has received the following cabled report on the Colombo tea auction of January 10:—At yesterday's auction. 3,5(X).1XX)1b. was offered to buyers. Common grades met a very firm demand, and prices remained steady Medium and line teas were slightly irregular, following quality. A total of 3.375.0001 b. is catalogued for eale next week.