THE BUTTER POSITION.

New Zealand Herald, Volume LIX, Issue 17984, 9 January 1922, Page 4

THE BUTTER POSITION.

While the producers in Australia and New Zealand are discussing the disposal of the Imperial Government's stocks of butter, the position is apparently being relieved by the increase in the consumption of the new season's deliveries. Low prices ara stimulating the demand, large quantities are going into consumptionj and margarine is being displaced from the popular dietary. Is it not probable that within a comparatively short, period the position will be relieved to the extent that the whole problem of the accumulated stocks will disappear? The quantity of butter temporarily withheld by the Imperial Government, estimated at 22,000 tons, is certainly large in comparison'with the importations into Britain during recent years, but it represents only about one month's consumption under' normal conditions. The existence of these stocks is the immediate consequence of the shortage of supplies and the high prices during the war years, aa a result of which the erasumption of butter in 1919-20 via reduced to little more than halt the normal and the consumption of margarine was doubled. As the Herald has previously pointed out, the supplanting of butter by margavine is of grave concern to New Zealand dairy farmers, and the position was not improved by the last requisition, which forced buttsr to a prohibitive price when margarine was being manufactured- in enormous quantities at a fraeuoo of: the cost of butter, That h evide/tf. i from tin taw t/b>. vho tutorial j Goyeriimoit sfell tons i of the butter bought at the extreme

rates. The producers generally must now consider whether their interests will be best served by allowing these stocks to go into consumption at prices with which margarine cannot compete, or by attempting to control the market, at prices which would have the immediate effect of checking consumption again. The dominant factor in the situation is dearly the purchasing power of the British public, since the supplies from all sources are much smaller than before the war—Russia's 30,000 tons annually are not available, and deliveries from Denmark and Sweden are greatly curtailed. There is certainly a risk of the Imperial stocks passing into the hands of speculators, who might use them to manipulate the market, but this danger may be easily exaggerated. A greater danger is that precipitate aotion may delay the recovery of the market that has already been gravely prejudiced by war-time control. That should be avoided, whatever .action is taken in regard to the Imperial stocks. Similarly, the controlling interests might well consider the importance of the local market, where consumption has also been restricted by high prices. At a time when price movements are rapid, it is perhaps not possible to preserve the strict relation between local rates and export parity, but in these days of quick telegraphic communication it is anomalous that the retail price in Auckland should lag so far behind the market changes that it is consistently higher than those charged in the Southern centres, and is to-day apparently threepence higher than the retail rate in London.