MARKET DEFENCE

Evening Post, Volume CV, Issue 23, 28 January 1928, Page 12

MARKET DEFENCE

BY LOW PEICES WILL AUSTRALIANS AGREE? "Evening Post," 28th January. In order to keep New Zealand butter out of the Australian market until the operation of the new Australian duties (which in the ordinary course will not operate till June) the Australian Butter Stabilisation Committee recommends (according to a Melbourne cablegram published yesterday) that local values be nsed on a basis that will not encourage importation from New Zealand. That proposal seems, to be quite legitimate^ but the committee adds that each factory should do all in its power to discountenance profctnble trading in New Zealand butter by distributors, wholesale or retail.' The quoted words may be capable of various meanings, but there seems to be some underlying suggestion of a boycott of distributors who deal in New Zealand butter, who might find themselves without supplies after the duties operate. However, whether the message bears that meaning or not, it is not by any means sure that there is enough unity of purDose even in Victoria, to present a united front against importations, even to the extent of keeping down prices A couple of weeks ago, according to' Press reports, there was something of a schism m the Melbourne butter trade through the decision of a co-operative selling firm m Melbourne to reduce the price of butter by W a pound (from Is 7d to Is 6%d) in spite of opposition from most other members of the trade. . . . The co-operative organisation which reduced the price of its butter by %d >a pound did so in order to avoid an accumulation of stored stocks which it was thought might prove unde-sirable-if favourable weather in the autumn stimulated production, and if large quantities of New Zealand and interstate butter were imported:" The above quotation shows that the Australian weather enters into the gamble. So does the New Zealand weather, though that fact may not be realised in Australia. On 10th January it was estimated that, if the weather did not alter, the output of butter in Victoria would decline fn about three weeks to a point allowing of little surplus for export. After that, the claims and tactics of Queensland and New South Wales dairy producers will enter into the picture. . . There are also the usual complications arising out of an export bounty with a variable incidence. The Australian Butter Stabilisation Committee fixed the export bounty on butter, for three weeks in December, at 4d a pound. The committee then decided to revert to a bounty of 3d a pound when it was reported that New Zealand would not agree to the immediate imposition of the new Australian duty of 6d a pound. "This action (comments the "Argus") was anticipated by the trade, and probably large quantities of butter carrying an export bounty of 4d a pound are now in store throughout Australia. When the bounty was increased it was the object of the stabilisation committee to obtain an advantage for the dairy farmer. It now seems that the butter merchants will gain more than the farmers through the bounty, as they will be able to sell butter churned this year in Australia and export stored stocks carrying an additional Id a pound in export bounty. ... If the danger in the presence of stored stocks is as great as is represented it would eeem advisable to encourage export by obtaining the consent of the stabilisation committee to the placing of the time limit on the payment of the bounty of 4d a pound. Such a course would clear any undue surplus and would give to the producer in the form of a sound market the benefit which he was to receive when the bounty was increased. General trade opinion, however, is that such a danger does not exist, and that there is no justification for a price reduction at this time."