Commerce, Mining, Finance

Evening Star, Issue 23527, 16 March 1940, Page 17

Commerce, Mining, Finance

(Continued from page 8.)

FUTURE OF BUTTER STORAGE AND SUPPLY MARGARINE COMPETITION PROTECTION AGAINST EXPORT TRADE DECLINE Conditions in the dairy industry of the Dominion aro far different from what they were in 1914-18. For one thing the producer is receiving a Government guaranteed return whatever course the overseas market may take. The local market is also protectedl against sharp declines in the export trade, whereas the practice had been to base local prices on export values. The British Government is sole purchaser of New Zealand butter from the Dominion Government and it has fixed the retail price for this and all butters sold retail in the United Kingdom at Is 7d per lb, and supply of butter rationed. The Government has also fixed the prices of margarine at 8d and fid per lb according to quality, but this competitor with butter is not rationed. RESERVE SUPPLIES. From private information received from London it would appear that butter is not only rationed but is accumulating_ in store in larger quantities than it is believed the circumstances warrant, or, at any rate, than is good for prospects of New Zealand butter after the war. The same thing happened in the last war, with the result that when it was over very large stocks of butter were “ flung on. to the market,’’ so to speak, depressing the price, although steps were then taken, and they partially succeeded, to mitigate the depression, with the result that market prospects improved. At that time the New Zealand industry was largely in the hands of the producers, who studied the course of the markets day by day. Things are different now. Anything in the nature of a great slump in tho British butter market—as in the wool market—coming immediately after relinquishment of British Government control of produce might not directly affect the New Zealand producer; but it would affect him and every other taxpayer in the Dominion if tho Government, by its guarantee, was faced with a market severely depressed by liberation of substantial quantities of stored butter. Moreover, while wool by its very nature may hot deteriorate in store, butter does not improve by holding, and refrigerated storage charges arc necessarily higher than wool store charges. Long term use of margarine is not likely to improve the demand for butter when the price of it falls below Is 7d retail. As matters stand at present imports of butter by the United Kingdom from Finland, Sweden, and the Baltic generally are not likely to be available for the 1940 spring trade. For twelve months ended June 30,. 1939, they were as follows. Tons. Finland ... 9,774 Sweden 11,859 Esthonia 9,817 31,450 Reference has been made to the British Government’s butter buying contract which (unlike wool) is to be renewed annually. It has also been pointed out that “ thousands of people are buying margarine to-day when a year ago it would never have occurred to them to do so. They are buying it not only to supplement their butter ration, but because they have found that they like it and_ also because they regard it as something in the nature of a national duty. Margarine is undoubtedly a more palatable food than it was during the last war. Throughout the war there will be a big percentage of the British public who will acquire a 1 margarine habit,’ and who may be indifferent to buying butter again unless it is at a price that suits them. Competition will undoubtedly be much more severe, and it is likely that strenuous efforts will have to be made to regain tho pre-war market.” It is apparent then that the accumulation and holding of large stocks of butter in the United Kingdom and the increased consumption • of margarine constitute a post-war economic problem for this Dominion, for which even an increased price above Is 7d retail may not be the solution. STOCK COMPANY REGISTERED The Mercantile Gazette ’ records the registration of the following company : Acton Downs, Ltd. Registered as * private company, February 19. Office: Tay street. Invercargill. Capital: £4,000, in 4,000 shares of £1 each. Subscribers: Lrnnsden—G. A. Hamilton; Invercargill—A. P. Finlayson, D. M. Malloch; Waikouaiti—A. Bannatyne, I,OQO each. Objects: Farming, stock dealing, and breeding. PALMERSTON STOCK SALE SHARP DROP IN PRICES A large yarding of 12,000 sheep and lambs, mostly Romney-Corriedale cross, was penned for the fortnightly sale at Palmerston saleyards yesterday. The entry comprised a large number of lambs, but the bulk of the yarding was made up of annual drafts of Corriedale and Romney-Corriedale cross ewes. Only an odd pen of young ewes’ came forward, and the entry of wethers was confined to three or four pens. With the exception of one line of openwoolled Romney cross sound-mouthed ewes, which realised 18s Id, two pens of cross-bred ewe lambs and the few pens of two-tooth wethers, the rest of the yarding may be quoted at prices fully 2s fid to 3s fid per head easier than the rates ruling at the previous sale in this centre. From the start the auction was lifeless, and at no stage could competition be said to be keen. The dry weather in South Canterbury and North Otago forced intending purchasers to be particularly cautious, and it appeared that the average low-coun-try sheep farmer did not intend to overburden his property with stock until after the winter. A number of RomneyCorriedale cross lines of ewes and lambs were passed in at auction. Some were sold late, but in a number of cases vendors decided to hold over their sheep till later in the season, and some of the high country lines are to be turned out till nest year rather than, accept

COTTON GOODS NEW ZEALAND MARKET MANCHESTER DIFFICULTIES CRIPPLING GOVERNMENT REGULATIONS Reference to difficulties experienced by Manchester exporters in the New Zealand trade was made by Mr Percy C. Fish, managing director of J. F. and H. Roberts Ltd., in his address to shareholders at the sixty-fourth ordinary general meeting in Manchester. Goods were now permitted to enter New Zealand only under license, which limited the value of the imports of such goods to the same value as that imported during the corresponding period of 1938. Consequently, no matter how anxious they might be to develop their exports from Lancashire, this regulation made it impossible to do so for this market. Furthermore, as the restriction was on a valuation basis, the quantity of goods, in view of to-day’s higher prices, naturally curtailed tho yardage to a considerable, extent. This did not complete the picture, as in addition there was a further law in operation which did not allow money to circulate normally. It was prevented from leaving the Dominion even in payment for goods delivered. Those desirous of retaining the goodwill of their New Zealand customers were called upon to pass the shipping documents through a bank for collection. When the bank had received the cash in New Zealand it sent an intimation that the amount had been placed in a suspense account and would be remitted by monthly instalments in terms of the exchange control permits. “There is_ in New Zealand much annoyance voiced by traders generally, as they are a very conscientious body, and they feel that their reputation from a credit standpoint is- being impaired; but, needless to say, it certainly does not create that impression upon us, as we know full well that it is a matter beyond their control. It really means than the New Zealand Government is retaining moneys for several months which in many cases are badly needed by British exporters. " In fairness to New Zealand,” said Mr Fish, “ I must point out that they have banned imports from other than Great. Britain, in some cases to the extent of 100 per cent., so that for the present they are looking to their own productions and those from the United Kingdom to supply their immediate requirements. These unpalatable restrictions are brought about owing to tho necessity of correcting their financial position.”

EXPORT PROBLEMS. The Manchester goods export trade still remained a problem, and they were told that on account of increased prices they were losing their grip •on this valuable business, and it was suggested! that maximum prices should be fixed, the basis to be such as would enable Lancashire to compete with overseas competitors who were enjoying very different conditions -to those in operation here. But to sell goods at less than cost price would simply be repeating a system that had been tried for far too long a period, and the sum total amounts to —the more you sell the more you lose. For years past goods had been Shipped abroad at prices which did not include any margin for the producers, and yet the demand was unsatisfactory. The question of price was only a pawn in the game. There were many mors real reasons which accounted lor the precarious condition of the export trade, such as duties, exchanges, quotas, and economic factors. The plain truth was that if markets abroad really wanted cheap goods from Lancashire they would not erect insurmountable barriers against her.

Governments abroad had a firm idea behind their minds that it was good business to manufacture their own requirements, irrespective of the cost, and only buy from England lines they, were unable' to produce themselves.They went still further and used surplus profits made in their own countries to subsidise goods which were exported to Britain. So long as overseas politicians with this mentality were in office, manufacturers would have to continue fighting with both arms tied behind them, and one-way traffic would be the order of the day. It was Mr Fish’s opinion that ail Lancashire needed was to be given ejjual conditions to those of her competitors. KEMPTHORNE, PROSSER DIVIDEND At a meeting of the directors of Kempthorne, Prosser, and Co.’s New; Zealand Drug Company Ltd. yesterday afternoon a dividend of 4J per cent., making 8 per cent, for the year, waa recommended. PROPERTY SALES John Reid -and Sons Ltd. submitted to auction, under instructions from the Perpetual Trustees, Estate, and Agency Company of New Zealand Ltd., Miss Cutten’s property in Sandringham, street, St. Clair, being allotment 10, block 11. township of St. Clair, with modern residence thereon. There was ai good attendance, and, though bidding failed to reach the reserve, the auctioneers have since disposed of the property at a satisfactory price. Other sales by this firm completed within the last few days comprise property in the estate of Mr A. J. Shaw, being allotment 1, plan 289, High street, Dunedin, with brick residence thereon;' allotments 29 and 30, township of Allandale, St. Clair, and residence thereon ; sold on account of Mr Cox to Mrs Timmings; allotment 9, block XXXI., township of St. Kilda, and residence thereon, sold to Mr Richardson.

the low offers made for them at present.

Quotations: Sound-mouthed Romney - Corriedal* cross ewes, open-woolled, 14s 6d to 18i Id; ditto, fine-woolled, 5s 6d to 13s; cross-bred ewe lambs, 18s 6d to 235; half-bred ewe lambs, 11s 3d to 17s; half-bred two-tooth' wethers, forward condition, 16s to 17s; cross-bred rape wether lambs, to 17s 6d; fine-woolled rape wether lambs, 12s fid to 14s; cull cross-bred wether lambs, 7s to 10s: cull half-bred wether lambs, 3s 3d to Bs.