MARKETING PROSPECTS.

New Zealand Herald, Volume LX, Issue 18531, 16 October 1923, Page 9

MARKETING PROSPECTS.

DOMINION'S DAIRY PRODUCE. HIGH BATES. '" LOWER PRICES INEVITABLE." BUTTER-FAT ADVANCES. REDUCED. [by- telegraph.-—own correspond ... ' ;XT HAMILTON, Monday. The ,Iv ew Zealand Co-operative Dairy Company has fixed its advance prices this month for butter and cheese at Id per lb. less than last month, i.e., Is 4fd for superfine direct delivery butter-fat for butter making, and Is 6d per, lb. for cheese, with the ' usual; id for superfine where milk grading ii undertaken at cheese factories. Casein suppliers receive 2d per lb. butter-fat over the butter price, and skim milk suppliers Id. Discussing the outlook to-day, Mr. A. J. Sinclair, acting-manager, stated that the company had been "led to ■ pursue ; a cautious policy by reports received - from their London manager, Mr. J. B. Wright. The shipping position was far from satisfactory, ; and in Mr.. Wright's opinion a considerable drop in tho prices of butter and cheese would inevitably take' place after Christmas. . During the past sis weeks, the market for butter had been exceptionally strong. Cables .from Mr. Wright showed that the price opened on September 1 equivalent to Is 6£d f.0.b., and remained at that figure for three weeks. The price advanced to Is 7£d on September 22,' and to Is 7jd a week later. Danish, butter was 2s below the Dairy Company's price on September 1, but had. finally showed up at 4s higher. The healthy condition of the butter market was due partly to a 'shortage of the choicest quality, and partly to ■a slight improvement in certain Continental exchanges, which resulted in small quantities of Danish butter being diverted from the English market. ' • Company's London Stocks.. _ Although none of the present ' season's New Zealand butter had yet arrived on the Home market, said Mr. Sinclair, the present strong tone had had an extremely favourable effect on the last season's butter held over by his company in London. Altogether tnere had been 120.000 boxes of the previous season's make unsold at the close of tho financial year, and a considerable quantity of this was still in store, although tho company's London manager had been making steady sales during the past six weeks. While it was evident, said. Mr. Sinclair, that a further payment- would bo made ,on last season's butter-fat over and above the price published in tho company's balancesheet, no indication could be given as to the amount until all tho stocks had been cleared. It would.be comparatively small, and would be paid on all butter-fat supplied during October, November, Decsmber, January, and April last. Temporary Inflation. Asked if he ■ had any forecast to make regarding tho forward position of the butter market, Mr. Sinclair replied that dairy farmers should not be misled by the temporary inflation of prices. There was no doubt, he said, that tho advance had been brought about earlier than was anticipated on account of the dock labourers' strike. - The opinion had prevailed'; in Toolev Street that a reaction would set in after the strike, but Mr. Wright reported that the trouble .with the dock labourers had continued over • such a lengthy period that by the time matters were settled, and deliveries were being made more freely, the trade was absolutely "on its beam ends" for butter, and it" absorbed supplies offering. In addition, the strike* had had the effect of clearing the cold stores in London, thus preparing the way for a steadier forward movement free from reaction. It would really be unfortunate, _ continued Mr. Sinclair, it the present, price of butter increased in the Homo market owing to the temporary shortage now prevailing. Huge quantities of butter would be arriving in London from the middle of, November onward, and owing to 'the dock strike the shipping position was such that large accumulations of butter would . be • unloaded in London without any regulation. In- any case, this would cause a decline in prices, but the difficulty would be accentuated if the present high price meantime led to a decrease in consumption. Large numbers of butter consumers would divert temporarily to margarine, and the reaction in butter prices, which would be necessary to get these _ consumers back again when large quantities of New Zealand butter went on to the market, would tend to bring about a lower level of prices than .would be normally justified. .' 7 Note of Warning Sounded. Mr. Sinclair said that reports from London all indicated that the producers here must be prepared for'reduced returns for both butter and cheese, ' and ; that it would be extremely inadvisable for dairy fanners to calculate that prices would stabilise near the present level. Asked it he considered that the prices of ' butter and cheese would be less than the average returns for the past season, . Mr. Sinclair replied that this was probable, ana dairy farmers should go cautiously during the next few months. As an offset, he said, there were certainly one or two factors to be considered, and " these had been stressed by Mr. - ' Wright. There was the British Empire Exhibition which would undoubtedly draw an enormous number of people to England, and thus increase. tho butter consumption. The recent Japanese disaster was bound to throw Japan back for a number or years, and this would affect the export and import trade of that country to the advantage of Great Britain, which would experience, a create;- general prosperity. Reports from Australia all tended to show that they had experienced an • extremely hard winter, and that unless there was a decided improvement in the present conditions, it was doubtful if some of the States would have any exportable surplus worth considering. Other Markets Attractive. The American market looked ... a good proposition owing to the general ■ prosperity of the people there. Butter consumption in the United States, said Mr. Sinclair, was 5 per cent, higher than on last season's figures, and the stored butter was comparatively small, so that high prices we're expected to rule there about December. . The strong position in America had fortunately diverted considerable quantities of Canadian butter which would otherwise, have reached the Home market. ' In addition, a very considerable market was being developed for New Zealand butter in the Orient. A representative from , his company had just returned from a tour extending as far .as China and Japan, and had been successful in arranging very valuable agencies. During the past six weeks this company had despatched 5164 boxes of butter to Honolulu, Manila, Hongkong and Singapore. Better shipping, facilities were required for this trade, and Mr. Sinclair expressed appreciation c\f the valuable efforts made by the Board of Trade through Mr. Collins to foster New Zealand exports to the Orient.

Heavy Supplies of Cheese. The marked for cheese, said Mr, Sinclair, had kept very steady during September, opening at lid f.0.b., .and closing at the same figure, with coloured slightly favoured. The price of Canadian cheese was waver'ng, and Mr. Wright's cable last week indicated that the Canadian market was partially demoralised. This was dun, said Mr. Sinclair, to a " bearish " movement on the part of a few American speculators and one or two London firms,who wished to depress the market by unloading their present stocks and then loading up larger quantities at the lower prices. However, after Christmas' a de- < Ijning market must bo looked for. Practically all factories in New Zealand with dual plants had switched on to cheese, and in Mr. Wright's opinion the quantities which would arrive in London from January onwards would be so great as to overweight the market.' In concluding, Mr. Sinclair expressed regret that the indications for the present season were not more favourable, but he felt certain that dairy- fanners would appreciate the ample warning given, and that they would go carefully during the flu&h months, so that, they would not. bo to' hard hit by any reaction that might take .place at the end of the season.