COMMODITY MARKETS AND PRICES.

Manawatu Standard, Volume LIX, Issue 69, 18 February 1939, Page 5

COMMODITY MARKETS AND PRICES.

* OUR OVERSEAS TRADE. (By “l’enloo.”) The overseas trade returns of tin; Dominion tor the calendar year""TU3B are decidedly disappointing. The exports were valued at £58,376,000, as compared with £66,713,000 in 1937, a decline of £8,337,000, or about 12-1 per cent; Compared with 1936, the figures are greater by £1,644,000. The imports totalled £55,422,000, against £56,161,000 in 1937, a decrease of £739,000, but compared with 1936, there is the very substantial increase of over £11,000,000. The imports, however, have been contracting since May last, and the drop lias been substantial, but not enough to prevent a decline in sterling exchange. So far bach as July last the trading banks have been holding importers and others wanting sterling exchange in check, and but for this the position would be worse than it is. The exports furnish the national income and are- the basis of our economics. TVhen our export trade is buoyant ' and prices are good there is plenty to spend. In fact, our standard *, of living depends upon our export .trade. It is, however, at all times necessary, to have a margin between exports and imports; that-is to say the exports should exceed the imports by about £12,000,000 in New Zealand currency, for the reason that we have so much to pay by way of interest on public and local body loans. Last year tho exports exceeded the imports by £2,954,000, so that wo were short of requirements by about £9,000,000, and this was made up by drawing upon ; reserves of ; sterling exchange. Of course there are other payments to be made overseas besides interest, and they have helped to reduce the amount of sterling exchange. It seems somewhat strange that a

decrease of 121 P er cent, in our exports should cause so great a disturbance to the economic structure, for we have had such declines in the past without causing so much trouble as is being experienced now. The restriction of imports and the control of exchange should, in tho ordinary '' course of affairs, restore sterling funds, but control of exchange will not ‘ restore economic equilibrium. There must be a balance between revenue and expenditure, between income and outgoings. Every individual knows that no man can spend beyond the amount of his income without meeting trouble. The State is no different from the individual; at all events there is not one economic law for the citizen and a totally different economic law for the State. It is a question whether exchange control and import restrictions will solve our economic difficulties. Those best qualificdfto express an opinion do not believe .that they will, and we must Wait and see. ' THE WOOL MARKETS.

The Wellington wool sale on "Wednesday was up to the level of sales at Dunedin and Invercargill. The w-00l offered was mainly from the Wairarapa and Mhhawatu and consisted ot top-making crossbreds, but the quality is 'said not to have been up to the average. Tho bidding ■ was keen and at times excitingly active, but the buyers were tied clown to regid limits and beyond those limits they dared not go. The wool season so far as the Dominion is concerned will close in less than two months, and it is hardly likely that values will improve before then. Growers apparently hold this view, for they are readily meeting the market, the withdrawals at the Wellington sale being very small. Though wool may not revive during the next three or lour months the prospects are better than the ■ present conditions would indicate. Those who have watched the trend of events will have noted the many trade agreements; that have been signed by different countries in Europe, and especially ,by Germany. Although most of these agreements are for barter trade they • are not ; likely to remain at that. .When the nations get busy manufacturing and producing goods for exchange a more hopeful and confident feeling is generated, and the standard of living is improved. In the standard of living clothes are an important item, and therefore presently we are likely to witness an increasing demand for woollen clothing, and therefore for wool. Notwithstanding synthetic fibres wool has a good future before-it, since - international trade shows signs of recovery. > • MUTTON AND LAMB.

Imports .of mutton and lamb into the United .Kingdom’ are being restricted. • The restriction m respect ol mutton may not perhaps matter very much, but it will in the case of lamb. For the four months to the end ot January the exports of lamb from New Zealand totalled 1.512,436 carcases, a decrease of 277,927 as compared with the corresponding four months of the previous season, hut mutton shows an increase. Chilled beef showed a small increase, hut frozen beef was less. The meat market has been slow. BUTTER.

New Zealand butter on the London market is commanding a good price at 1225, which is 11s pej cwt. higher than the price of a year ago. Butter like wool may be favourably affected by the extension of barter trade agreements. -If Germany makes a trade pact with Denmark, Finland, or Esthonia., butter is certain to be one of the products to figure in the barter, for Germany is in very great need of the commodity. If more Danish butter is held off '.the London market that would cause an increased demand for New Zealand; butter with an improvement in price. SHARE MARKET. Business on the Stock Exchange is contracting, and brokers are beginning to feel’i the loss of trade. Sales are now confined almost exclusively to New Zealand; shares.