BUTTER SLUMP

Grey River Argus, 11 March 1933, Page 5

BUTTER SLUMP

BRITISH CHECK On Dominion Exports (Aus. & N.Z. Cable Assn.) LONDON, March 9. New Zealand choice buffer' fell yesterday to 70s to 725, Australian 69s to 71s, the lowest ever touched. This slump’ followed news earlier in the week that the New Zealand and Australian Governments had decided not to restrict the exports of butter to Britain as requested by the British Government.

The latest cabled news that the Australian Cabinet is reconsidering the restriction of butter exports is having immediate satisfactory effect on the market.

To-day’s news brought buyers to the market, and there were considerable purchases, largely speculative, in anticipation that quotas will be agreed to This raised New Zealand 74s to 755, Australian 72s to 735. Several of the largest importers arc of the opinion that if Australia and New Zealand agree to restrictions, prices will recover considerably, but there must also be restriction on foreign. The Australian Resident Minister, Mr Bruce, who now is going to Geneva owing to the gravity of the armament crisis, was reluctant to leave London in view of the butter situation, but considers it essential to maintain contact with the British Government over disarmament, consequently there will be no further butter negotiations until he returns.

RAISING OF PRICES. THE PROBLEM IN BRITAIN. (British Official Wireless). RUGBY,' March 9. A motion asking for a policy to raise wholesale prices was debated in the Commons. Mr Chamberlain again asserted there would be no precipitate return to the gold standard. Replying to criticism that the Government had missed a great opportunity at Ottawa to establish an’lmperial monetary system, he said the immediate difficulty was that the Dominions would have to grant power of fixing the rate of sterling, which they would have to accept without having any control. It was conceivable that what suited Britain at the particular moment would not necessarily suit the Dominions. Referring to the fall in wholesale prices, he said they had diminished since October, 1920, by one-third, and iu the case of raw material by fifty and sixty per cent. This practically destroyed the purchasing power of a number of countries. The fall in primary products was much greater than the fall in manufactured articles, and the fall in wholesale prices much greater than the fall in retail prices. The effect of this was that countries had been unable to purchase the 1 goods which Britain produced. Wholesale sterling prices remained remarkably steady, particularly when compared with those in countries on the gold standard. This showed that we were in the presence of world forces, and that by some means, largely by the monetary policy pursued here, we had countered the effect of these world forces, so far as sterling prices were concerned. He did not believe that it was possible to raise sterling prices by monetary action alone. As long as the world was in a disturbed condition, when no one knew what political changes were likely, or what financial difficulties other countries might find themselves involved in, they could not expect international trade to resume former volume. He did not believe that any artificial stimulus could restore the volume of international trade which must depend upon improving world conditions. N.Z.-AUSTRALIAN DISCUSSIONS. (Per Press Association). AUCKLAND, March 10. It is reported from Kohukohu that Mr W. Grounds announced that he and Mr W. Dynes Fulton had been deputed to go to Australia to discuss the butter situation. Mr Grounds expressed himself as strongly against export restriction.