COMMODITY PRICES

Evening Post, Volume CIX, Issue 75, 29 March 1930, Page 12

COMMODITY PRICES

SUPPLY EXCEEDS DEMAND

"GOOD-BYE TO ALL THAT" "Evening Tost," 29ih March. Mr. W. J. Poison, M.P., speaking at Vcw Plymouth yesterday, tried to divert li-B-aticiiHon'of farmers from prices of the gust to prices as they arc to-day and as they, may be to-morrow. Those who were thinking of a return of inflated prices Should Bay good-bye to all that!" Depreci-ated-values of most commodities were ruling, the world over. Mr. Poison's, view is corroborated by the National Bank of Kew York, which has gone thoroughly into the matter and has discovered that supply now exceeds demand with consequential lowered returns to producers. The bank regards the outlook for 1930 as encouraging for Europe owing to reparations settlement and the pronounced reduction in interest rates "in all countries." This was written at the end of February. '■'Oiv the other hand, in the countries of the world which are dependent upon the exportation of crude products, raw materials, and the staple foodstuffs, the prospects are most depressing. This class of commodities is in more than abundant supply, and low prices are seriously affecting, the buying power of producers. Sugar, coffee, tea, rice, cocoa, copra, rubber, wool, wheat, butter, cotton and cotton goods, silk, jute, silver, petroleum, tin, and coal are all at prices lower than have prevailed in- recent years, and in some cases are said to be below current production costs. The bank deals briefly with each one of these .commodities, showing the sharp declines'in prices of most of them and thenincreased 'production. Mentioning two of them in which New Zealand is particularly interested—wool and dairy products— the' National City Bank quotes the returns of the United States Department of Agriculture on .the production of wool, furnishing the following table:—. • (000,000 omitted) '■-...-.:■. 1923.' - 1929.. Country. ' Pounds. Pounds. United States 264* . 355 Australia 063 OoOf New Zealand ..." 209 2fiO Union of g; Africa 184 283 Argentina =' 295 ' 343f Uruguay ; '.' 100 150 rTotal -6 countries ... 1715 . - 2341 '■•.'" '"; "For 1922. ;fi'or' 1928. It is shown how "the low price of wool seriously reduces the buying power of the leading producers named above, with, perhaps; the exception of the.wool growers of this, country," i.e., the United States. Dealing with dairy produce the bank remarks that it has only recently been classed among "the distressed products, and.it is. a question whether they really should be classed there." Butter in the States is down in price 10 to 12 cents'(sd to 6d) per pound on last year's rates, a fall of 20 to 25 per cent. Cause of' the decline are increase of thirty, million pounds of butter in' stocks. *i"Dairying has been the most profitable branch of agriculture since the war and more farmers have been getting into it— north-west, west, south-west, and. through the south" of the.-United.States. Doubt; is cast on the wisdom, of the Fordney tariff which raised;the'American duty on butter from 2Yz cents to 8 cents per Ib, and several years later the duty was raised to 12 cents, and the pending Tariff Bill carries it to 15 cents. "But in the face of these efforts," the bank observes, "the price declines 10 cents from a level which already was unattractive to foreign butter." .. Concluding, the National City Bank states: "The declines are illustrative of the! changes w-iieh are continually occurring in industry, for whicli no remedy is evident,' except in a better adjustment of industrial development to consumptive requirements. "In numerous instances over-production fjasbeen stimulated by arbitrary efforts to control prices."