A DISAPPOINTING YEAR.

Manawatu Standard, Volume XLI, Issue 9588, 4 September 1913, Page 7

A DISAPPOINTING YEAR.

BUTTER AND CHEESE MARKETS AT HOME. \

Reporting on- the imported dairy produce trado for the y<sir ending June 30th, 1913, Messrs W'eddol and Co., London, state that it lias been unsatisfactory to both oversea producers and to British retailers. The great drought in the summer of 1911, by which eupf)liee were reduced to an unprecedently ow level, and prices raised to the highest known to the present generation, left its trail of ill effoets behind, one of the. greatest of which was tfie disturbing effect it had on men's minds concerning the laws of supply and demand. The old land-marks were obliterated, and the teachings of former experiences almost forgotten. "When the past year began, supplies and prices had not resumed normal conditions, and tho views of a great proiwrtion of those engaged in the dairy produce trade in England as to the future were in an inchoate state. They became an easy prey to the temptations of ' short sellers" who, by playing upon tho losses suffered in the previous year through not buying ahead, induced traders to "protect" themselves by entering into forward contracts, at prices which were low compared with the previous year. The result was that probably never before in the history of the trade was to much butter and cheese "sold short" as in the year roeently ended. These contracts were made mostly by speculators, so, that while both the oversea producers and the- retail traders in this country lost, the gains were mostly gathered by "short sellers."' The reports which came fqom New Zealand last autumn as to butter and choese being •old out-and-out or consigned on "guarantee without reoouree" at abnormally) high prices were a subject of wonder among importers in this country, but when the "short selling" leaked out the mystery disappeared. Directors of factories, finding that buyers were offering higher prices than ever were made before, and being also offered record "guarantee* without recourse," naturally asked increasingly high terms, and something in the shape of a boom resulted, which, however, was only nhortlived. Presently the factories found out they had been misled by theee artificial market movements and were unable to make genuine sale®. All the disappointments that have since bnen experienced by the factories in New Zealand, because they did not sell outright when reasonable price* were offered. and by the wholesale importers as well as the retailers in this country, who made forward contracts nt high prices, were largely due to the high ideas of values fostered by these artificinl dealings at the opening of the season.