SHARP RISE IN BUTTER.

New Zealand Herald, Volume LXII, Issue 18942, 13 February 1925, Page 10

SHARP RISE IN BUTTER.

LONDON PRICE UP TO 1765. IRREGULARITY OF MARKET. STOCKS REPORTED SHORT. , _ DEMAND FROM CONTINENT. A continued advance in the price for New Zealand butter on the London market is announced, the latest figure being given at from 172s to 176s per cwt. This advance, which represents an increase of about 14s within a few days, is attributed to Continental buying, and increased consumption in Great Britain. Stocks are reported to be short, and the market somewhat irregular. New Zealand butter has been reaching the London market at the rate of over 3000 tons a week for the past few weeks, but despite these heavy arrivals, tho market has been steadily advancing. It is anticipated the consignment on the Cumberland, which should be tho next vessel to arrive, will realise the same satisfactory figure reported, ii" not higher, but among the local merchants the present advance is generally referred to as temporary. The fact that Danish butter has been selling at about 50s above the New Zealand article indicates a very strong Continental demand. With this wide margin existing it was naturally expected there would be either a heavy decline in Danish or a considerable advance in New Zealand butter. Tho fact that there has been this rapid advance in New Zealand prices indicates that the demand on the Continent continues. It was pointed out yesterday by a dealer that lower prices for butter in England had evidently increased the consumptive demand to a very great extent, and as long as the pripe kept within reasonable limits •—that was, not above 190s—the demand , was likely to continue, and very j quantities could bo absorbed, especially i with the Continent' relieving the British market of the bulk of Danish supplies. , The fact that the price has hardened is regarded locally as highly satisfactory, as it , has relieved the feeling of depression among producers caused by the low level readied in January. Trend of the Market. The peak of prises for the present season was reached about the third or fouith week of October, when an average of 226s per. cwt. was reached. The price then slowly declined until the second week of November, when it stood at 2175. There was a drop in the next week to 2035, but this was increased at the end of that month to 210s, while at Christmas time the price stood at 2065. , With tho opening of business in tho New Year the" market declined until m the second week of January the low point of 154s was touched. In the last week of last month it was shown the downward trend had been arrested, prices going up 4s with a further increase to 164s at tno end of the month; From that time to within the last few days the price has been in the region of 160s, and on vA ednesdav it was announced there had been a rise to 1625. Yesterday's advices gave the market prices at from If2s to l/6s, so that in the space of approximately one month there has been an advance ot £<& per cwt. The London price of 160s is equal to approximately Is 3d per lb , f 0.b., while 1765, which for the present may be taken as the level now operating, is equivalent to about Is 4|d. There have been somewhat heavy arrivals in London this month and the shipments arriving during March vail bj greater by about 100 per cent, than thosa handled in the same month for the past. • two years. In March, 1923, 6600 tons went on the London market and 6boo m March of last year. The arrivals of New Zealand butter in Great next month will aggregate over 13,00w> tons. Derails of March Arrivals. Sixteen vessels carrying approximately 522,000 boxes of butter are due at English ports during the month oE March. There are: —Port Hunter, 60,518; Kumara 19.845; Norfolk, 89,318; Baradine, 7948; Rimutaka, 40,000; Zealandic, 50,000; Waiwera, 19,000; 11000; I'akeha, 56.692; Corinthic, 30,000} Port Hacking. 20,000; Port Melbourne, 40,000; Maiatua, 10,000; Tekoa, 20,642} Rotorua, 40,000. This makes a total of about 13,055 tons of butter, so that an average of 3263 tons will reash the market weekly for that month. The total of the shipments from this end will again be haavy this month, after which the quantities of * butter leaving the Dominion will steadily diminish. The view is held locally that with the opening of the spring in the Northern Hemisphere the" shipments now going out will meet the competition from Danish and other butters. Should the northern season bo early the value of the February butter will be influenced by the competition, but with a late spring the market might quite easily be satisfactory with variations according to the quantities arriving from the Dominion. When the market slumped in January largo quantities of butter were arriving from New Zealand and ill very many instances selling limits were fixed at from 170s to 190s per cwt. This naturally tended to ease the position, and although in many quarters the storage of butter was not considered a wise move the fac- ■ tories have by their own regulation of supplies again reaped a very considerable benefit. IMPROVEMENT TEMPORARY HEAVY SUPPLIES DUE. MR. GOODFELL.OW'S ATTITUDE. [BY TELEGRAPH. —OWN CORRESPONDENT.] HAMILTON. Thursday. Reasons for the recent rise in the price of New Zealand butter on the London market were given in the Course of an interview to-day by Mr. W. Goodfellow, managing director of the New Zealand Co-operative Dairy Company, Limited. Mr. Goodfellow stated that the slight improvement recently reported was in all probability due to the fact that many' dairy companies were holding back supplies in anticipation of higher prices at a later date. Very large quantities of both New Zealand and Australian butter were due to arrive in London during the next two or three months, and no appreciable recovery in that market, under existing conditions, could, be reasonably anticipated. The most remarkable feature of the present situation was tho relatively high price of Danish butter, which was recently reported to be selling at 210s, or 5d per lb. higher than New Zealand, both wholesale and retail, and, further, at the rate of 1500 tons, week in and week out. Danish butter sales were well spread over the United Kingdom. They were kept at a more or less uniform quantity throughout the year, whereas the whole of the New Zealand butter production was marketed practically in and around London only. Daring the months of from November to May New Zealand overloaded her already well-supplied customers, and depended largely for any increase of the consumption _of_ butter reducing margarine sales within that limited area. Proceeding, Mr. Goodfellow said that the Now Zealand Co-operative Dairy Company, Limited, and the Marketing Aa- ' sociation, which .worked in conjunction with tho Cooperative Wholesale Society, had done a good deal of pioneering work in Manchester and other northern cities, but this individual effort was quite inadequate and counted for little during the flush of the season, when very large quantities of both Now Zealand and Australian butter had to be sold. Sir. Goodfellow said the disparity between Danish and New Zealand prices alVays occurred when bsavy shipments ar*

rived from New Zealand and could only be obviated by greatly increasing the permanent number of consumers of the best butter. It obviously did not pay to force down the price to the margarine buyer figure. To accomplish this very desirablo state of affairs by individual effort would take many years, and ho believed the Dairy Control Board could bring about a marked improvement in a year or two, if it would undertako to do it. Continuing, Mr. Goodfellow said he estimated it would cost at least £25,000 a year for, ss'y, from three to five years, for the publicity selling agents in all the large cities of Great Britain would require to carry stocks all the year round, and would require to be offered sufficient inducement to push sales of New Zealand butter in preference to Danish. That was a national work which would certainly give a magnificent return for the money invested, not only to the producer, but to the whole of the people of New Zealand. In his opinion, if the scheme were in operation to-day, Danish butter would be selling at about 180s and New Zealand at say, 185s, or at least 2d a lb. higher than the recent prices. Mr. Goodfellow said that two leading Wellington newspapers recently referred to the recommendations of the Dairy Control Board's delegation; as an extremists' proposal and indicated that the board intended to try out some theoretical idea As a matter of fact, the New Zealand Co-operative Dairy Company. _ Ltd., for tho last three years had applied almost identical methods in the marketing of one-third of New Zealand butter with conspicuous success. As one of the socalled extremists he had no hesitation in stating that bv adopting the board's proposals the dairy producers would be undertaking no risks, but would be adopting a common-sense plan which had already been proved commercially sound in practice. ' Referring to his company's reduced advance pav-out of 12* d per lb. for superfine butter to be made on February 20, Mr. Goodfellow said this action really required no explanation. The advance was governed by the prices ruling in England, and the prices it was expected the butter now being produced would realise when it arrived in London. MERCHANTS' CABLE ADVICES. EXCITEMENT OF THE MARKET. Further advice of the upward trend of the London butter market was received yesterday by Messrs. Leonard and Son from their London office. This was to the effect that New Zealand butter was selling at 176s per cwt., and that the market was excited. The following cablegram was received yesterday by Joseph Nathan and Company, Limited, from their London office: ''The butter market has advanced rapidly owing to Continental buying and increased consumption. Stocks are short. Prices. 172s to 1765. The market is irregular. Cheese, 955; the market is steady. Dalgety and Company, Limited, are in receipt of the following cablegram from their head office, London, under date February 11: —Butter: SinCe our last wire prices are higher by 8s {now 172).