YEAR'S BUTTER PRICES.

New Zealand Herald, Volume LX, Issue 18295, 11 January 1923, Page 8

YEAR'S BUTTER PRICES.

LONDON MARKET IN 1922. FLUCTUATIONS IN PRICES. GLOOM OF LAST NEW YEAR. The price of New Zealand butter on the London market to-day is no less than 66s per cwt. higher than it was at this time in January, 1922, and almost level with the mid-winter price which ruled in 1921 just prior to the phenomenal rise which took place in July and August. There is thus every reason for satisfaction and optimism because the price is good andthe market has an appearance of a stability that has not been known since the days of Imperial purchase. The last six months of 1921 saw the bottom drop out of the market. In August 266s was reached, a rise of 50s to 60s having taken place in the course of a fortnight, the rapid advance being attributable to severely restricted .sales of Government stocks, the reduced output in j England and the Continent, owing to drought, improving industrial conditions and a stimulated demand partly through a period of low prices. The level reached was not probably of any benefit to New Zealand, being rather the concern of London merchants. What then happened. however, was of the most serious moment to New Zealand, for at the beginning of the dairy season of 1921-22 prices crashed. The causes were partly reduced consumption, partly the break of the drought, but principally the action of the British Food Ministry in liquidating huge, stocks. With all this butter on the market the new season's supplies were- arriving and the position developed into a race for lower price levels. In November, New- j Zealand butter was selling at the July level, and then in the course of six weeks tragic weeks for many a, dairy--1 —there was a drop from 204s to :1265. Effect of Continental Buying. '' This was the position on New Year's I Day. 1922,— position which made the ; conventional greeting of the period some- ! what of a mockery. It had one good ! effect, however, one bright spot on the i inside of the cloud—an enormous conI sumptive demand sprang op which, 'together with Continental buying, ! quicklv absorbed the bulk of old : stored* stocks, as well as the heavy supplies arriving in England from the ! Southern Hemisphere. A boom, possibly \ of greater advantage to London merchants than to many Now Zealand factories, : followed, and in March the price jumped ! from 140s to 1925. Rapid fluctuations j ! then took place, but again of more m- ; terest to than to producers. In j ! April, the price dropped to 182s and 'rose again to 189s. Then in May it j tumbled to 1645, to make a meteoric rise ! to 230s the next month, partly through fear of another drought and partly! through speculation. This price did not! hold after July. Early in August, it was from 192 a to" 1965; the next month it varied from 206s to 2lßs, rising to 224s in October, and then gradually falling with one or two fluctuations until at the beginning of December last the quotation was 188s to 1925. Art Encouraging Outlook. The arrival of the new season's butter in quantity now made- itself felt, and on December 9 the price was 170s to 1765. There was immediately a fear that another slump, that had been predicted for the period of heavy importation into England from southern countries, was about to take place, but it did not eventuate. By the middle of December the price had crept up to 180s-184s, and during the last few weeks it has advanced almost, daily, until ISSs has been reached. Synchronising with this unexpected re- ] covery of the butter market is the improvement in the price of wool, and thus New Zealand faces the New Year with high hope and renewed confidence. The good prices of butter at the flush of the season—a season which is witnessing a remarkable output— a matter for national congratulation. Every soul will feel the benefit of the swelling stream of wealth that will, in consequence, flow into the country. It will not mean that many individuals will escape their folly of the boom days, but the community as a whole will find solid reason for the hope that the paths of plenty lie not far ahead.