LONDON PRICES.

Northern Advocate, 16 June 1923, Page 6

LONDON PRICES.

FOR DAIRY PRODUCE. A.\ ANXIOUS SITUATION. The London representative of the National Dairy Association writes ah follows, his letter being dated April ID:— Again the butter market has had a severe setback. Two weeks ago the price of New Zealand butter was 184/18(5/. To-day it is 166/ to 164/. This decline is acute enough, but even at 160/ it Avoukl be impossible to sell even small quantities of butter. The moment the miarket reaches the top and commences to recede, not a buyer can be found for butter, and only those who are working on day to day stocks are compelled to buy sufficient to go on with. Danish, which lias been until yesterday quoted at ISV, IS."/, f.o.b. Copenhagen, has been -to-day reduced to .168/. The lower the price goes the less chance of getting the trade to come on again. It would now appear that all those who prophesied high prices in the spring of this year have been hopelessly wrong. The almost unanimous opinion a few months back was that we would see high prices during May and June. Quito the reverse looks like being the case. At the present moment large stocks of butter are held in cold store; in fact, current arrivals are bound to be so treated, as the butter cannot be sold until the demand again springs up It is doubtful if butter was offered at 150/ just as the moment whether buyers or speculators could be found to take any quantity. At the same time there is nothing to be gained by endeavouring to force sales.

No doubt more butter could have been disposed of 'at higher prices; that is, sales could have been made at 174/ when the market was at 180/, but agents naturally hold out as long as possible against the breaking of the market price .and as so often happens, those who broke away first and took the lower prices will appear to have made much better returns than those who tried to hold the miarket.

It is possible that a false position has been created, due to the belief that sales during recent weeks were going into consumption. It now looks as if much of the butter was bought and held against anticipated shortage.

In our opinion the retail price of butter has been at a figure beyond wliich Ihe general public were prepared to continue using it in sufficient quantities to absorb the nrriva-ls from all countries. New Zealand butter has again been forced out of the North of England. As soon as the price approximates that of Danish, the New Zealand article is neglected. There has been a tendency to force prices too much. This new element has. in owr opinion, been the prime factor in bringing about these heavy falls in values. It is a mistaken policy to force the price up 5/ or 10/ and thereby bring about a break of 20/ or SO/.

It is expected that the retail price will be reduced from 2/2. possibly to 1/8. or even 1/G per lb. Should this happen there will be a big increase in the consumption ond prices mnv again begin to rise.

Cheese has been on a high level for some time. Stocks have been as low <is they are ever likely to be- at this time of the year. The upward movement of the retail price has gradually cut off the retailers' profit and forced the public eating sufficient cheese to maintain recent values. The retail price of 1/4 to 1/8 has brought about a shrinkage in the demand. Moreover, the market has been kept in n state of uncertainty due to purchasers of c.i.f. cteese getting alarmed and forcing sales. Many holders of c.i.f. cheese are offering to sell forward for the remainder of the year jit continually reduced prices, and this naturally has a demoralising effect on <v nervous market. Ten days ago "N'evV Zealand cheese was 136/. There iare sellers today at 100/. The importers are having a bad and anxious time.