STEEP RISE IN BUTTER MARKET

Evening Post, Volume CXXIV, Issue 107, 2 November 1937, Page 8

STEEP RISE IN BUTTER MARKET

London provision trade opinion, according to the "Daily Herald," is that the price of New Zealand butter may reach 2s pet pound by Christmas time. The New Zealand Marketing Department's advice is that up to 152s per cwt. wholesale was the price ruling at the close of business in London on Saturday. The Government's guaranteed price for, butter to New Zealand producers is 112s sterling per cwt., so that at 152s the Government is at present 40s per cwt. to the good, subject, of course, to the grade of the butter sold. Formerly the exported dairy produce of the Dominion was disposed of by consignment, and by selling free on board at New Zealand ports. The producing interests consigning their goods took the market as it was; those who sold their butter and cheese had —as they have under the guarani tee scheme —a known price as soon as the produce was put aboard ship, and security against any vagaries of Vhe market. Sometimes llie free-on-board purchaser made a lot of 'money, sometimes he lost a lot by the transaction, but, in any case, the producer v.as covered by the price he had accepted. The buyer in this case was called a "speculator"— when he was successful. Under the guarantee scheme he has been replaced by the Government, which assumes all risks of l market fluctuations, protecting the producer against them, pledging the credit of the country in order to do so. If there is a loss on this business the Slate bears it, if there is a gain it will go to the industry so protected. Now butter has reached, and that swiftly, a price level that the trade regards with misgivings. It is one thing to predict 2s per pound for New Zealand butter and another thing to get it, except in exfraordinary circumstances, and then for but limited quantities, and that not for long. Margarine competition is always in waiting as a check on the price of butter, not that it is preferred, but because there is no alternative. The low price of butter over the past two years has opened the way for the New Zealand article^ into retail trades and localities where it had but a small entry before. It would be regrettable if the increasing consumption had a setback, as it must have at present rising prices, for of the imports of butler from Empire sources during the first nine months,.of this year New Zealand furnished 111,807 tons of a total of 183,569 tons, nnd it headed the list of imports from all countries, Denmark being next with 87.333 tons. New.Zealand, then, has made a very firm position for itself in the British butter market. It is fervently hoped that the present steep -rise in the price of New Zealand and other butter will not jeopardise1 that

position.