COMMODITY MARKETS AND PRICES.

Manawatu Standard, Volume LX, Issue 264, 5 October 1940, Page 10

COMMODITY MARKETS AND PRICES.

BRITAIN’S WAR-TIME TRADE. (By “Penloo.”) Considering the difficult times and especially the shipping difficulty, Britain is maintaining her export trade rather well. It is not worth while making 1 reference to imports for in addition to war. material Britain lias contracted to buy foodstuff's and raw material from various countries, including cocoa from North African French colonies and cotton from Egypt. On the export side, which the British Government is fostering, British manufacturers are capturing the markets which Germany and Italy are unable to supply. The British motor trade is doing well, especially in Latin American countries, all of which are buying more British cars. British 6mall cars are said to be increasing in favour in the United States, and more cars arc being sent to Malaya and the Dutch East Indies. Tlio rayon manufacturers have formed themselves into groups and stand a good chance of capturing tho trade of the Ear Bust and the Aliddle East. Tho vital need of Great Britain at tho present time is to increase her exports, and therefore the restrictions placed on imports by New Zealand look like an unfriendly act. Many people have been seriously puzzled to know why New Zealand should be the only Dominion in the British Empire to impose such restrictions. Some say that they arc necessary because the demand for London exchange has been excessive. But no one has attempted to give an explanation for this extraordinary demand for exchange. Early last year it was said that the repatriation of British capital, and the heavy investments in Australian shares by Now Zealand investors were tho main cause. But exchange control and import restrictions have been in operation for two years, and tho restrictions are tightened. Some nonfood that the spending power of tho people is in excess of tho production income and is much above the export income, after deducting the amount required for tho debt service. Bow this is to be remedied is the problem, and until it is remedied import restrictions will last, and may even bo further tightened. Others who profess to study the psychological effects point out that import restriction and the compulsory loan provide the Berlin radio announcer with excellent subjects for exaggeration. When the wharf workers went on strike, the Berlin radio described it as a revolt and it would not be surprising if compulsion in rnsbect. of tho war loan is not turned to account. Dr. Goebbels could say, and no doubt would say, that the people of New Zealand do not favour the war, their hearts are not in it, and therefore compulsion is necessary to force them to pay for the war. But this is sheer rubbish and we will live through it all and emerge on the right side of the fence.

But Britain must expand her export trade to help meet the war expenditure, between £8,000,000 and £9,000,000 a day. The bulk of this money is going into munitions purchased in countries not in the sterling group. These purchases have to be financed, and Britain wants to increase her foreign credits by tho sale of manufactured goods; if this cannot be done then payment must bo made in gold. Fortunately, the bulk of the world’s supply of gold is produced within the Empire—South Africa and Canada—and the Bank of England controls this supply. There is no danger of Britain not being able to pay for imports, but tho position would be greatly eased if she could expand her export trade. Aloreover, there is tho post-war period to be kept in mind, and it is of interest to the Dominions to pee British trade expand. PRICE EIXING. The British Government is fixing the prices of Egyptian and American cotton and this is quite a fair thing. The Government has bought (lie cotton crop of Egypt, and is the sole importer of American, and thus has a monopoly of cotton supplies, and is in a position to fix the prioe it pleases. The British Government, however, is not looking for profits, and so most of the goods over which Britain holds a monopoly are being sold practically at cost price and manufacurers have no difficulty in filling their requirements from the Government stocks. Tho wholesale purchases by the British Government must be very helpful to producers, but it is not so in all cases. In the South Seas producers of copra are curtailing production, or closing down their factories altogether because the British Government is said to lie holding a year’s supply of copra. Producers would no doubt like to see British stocks reduced, but this cannot bo brought about just at present. The copra is wanted mainly for tho manufacture of margarine which at present is being made from whale oil. But the outlook for these supplies continuing is not very good and it will presently be necessary to turn to cocoanut oil to replace whale oil. Britain’s supply of whale oil cornea mainly from Norway, the Norwegians being the most expert whalers in the world. Now that the Germans occupy tho country this industry has come to a standstill. OTHER COMMODITIES. The price of tin stands at about £207 per ton, which is a low figure, for even in peace time it stood higher, selling for as much as £3OO. The production of tin has been regulated by an International Council which fixed the quota for each country. In this way production was kept equal to or just beiow the consumption demand, and this helped to keep up the priqe. When the war began the production quotas were increased and reserve stocks were released, which helped to keep the price down. It is possible also that the consumption has eased owing to many war economies. Tin is largely used by motorcar manufacturers, but now they are probably using duralumin, which is an allov of aluminium, and is very light and strong.

Britain is also fixing food prices, especially imported foods, for the double purpoes of checking inflation and economising in shipping space. Britain is not likely to run short of food supplies this winter fot the wheat harvest in Canada has been exceptionally good and this means also that live-stock will have plenty of feed. Britain will get all the pig products she needs notwithstanding that the Danish trade has been lost. From Australia and New Zealand supplies of dairy produce, frozen meat, and fruit will soon be going forward in quantities together with wool, and all these commodities will be wanted for Britain has to feed a very large population. The market that was badly hit by the war was the share market, and the Dominion Stock Exchanges in particular suffered not only from the war but also from the ban on dealing in Australian industrial shares. This ban w-as subsequently partially lifted, permitting dealings in such shares provided they did not involve exchange on Australia. Thus the business was confined to such Australian shares as were held by New Zealand investors. For some time the Stock Exchanges were very dull, but now they seem to have adapted themselves to the changed_ conditions, and the business passing is fairly good. The demand is strong for Government securities, and for bank and insurance shares. Some of the industrial shares appear to have reached their peak prices for the present, and there may havo to be a further adjustment of prices when the effects of the compulsory loan are better known. In London, also, the air raids business is Being carried on with a more cheerful mood, and with a strong demand for gilt-edged _ stocks. The fact appears to be that tho British are more confident that ever of winning the war.

Australian Wool. Crossbred and comeback wools are already being offered in appreciable quantities for appraisement in Sydney, says the Sydney Morning Herald. Their early appearance in the season’s catalogues is due to the preferential treatment-, being given them because of their special suitability in the: making of equipment ' for the troops. . u • , '