DANISH BUTTER TRADE.

New Zealand Herald, Volume LXII, Issue 18946, 18 February 1925, Page 14

DANISH BUTTER TRADE.

REGULATION OF PRICES, CONTROLLING INFLUENCES* j , ;\a interesting description was given ■ recently by & provision trade correspondent of the Manchester Guardian Com- ; mercial of the maimer in which the export prices of .Danish butter are controlled. The circumstances which govern the distribution of Danish butter arc peculiar. Out of a weekly production of about 42,000 casks in Denmark, around 16,000 cases are contracted for with the dairies, subject, to the official quotation, by large distributing organisations in England. About 12,000 casks go to Germany, sold subject to quotation and partly at a fixed price in Danish crowns. TEo balance of 14.000 casks is sold at fixed prices on tho open market. Tho average of these fixed prices obtained by merchants in Denmark from importers in England determines tho official Quotation, which is settled by a committee of producers and merchants every Thursday in Copenhagen. So that the 16,000 casks mentioned may be secured by two individual concerns, there exists between the dairies and buyers an agreement by which the dairies receive so many kroner per 100 kilos, over and above the official quotation which rmlcs at the close of each week in the Copenhagen market, which is in its turn subject to a great amount of private speculation. The correspondent states that there are several exporters who between them control tho bnlk of the 14,000 casks available, and they are accused of "rigging the market" by various methods. It is arranged that a fair quantity of butter is sold during one week at a fixed price or subject to the quotation then ruling, for which part of the following week's supply is commandeered. By manipulation -the next week's market is weakened, and the various dairies are paid at the lower quotation for the butter which was called for in advance tho previous week at a higher rate. Another profitable method operated by speculators is the practice of holding butter over from one week to the next, Tho withdrawal of supplies gives credence to tho report of a shortage, which firms up prices. Before the rebound of tho market supplies are gradually relinquished at tho advanced rates." If German purchases are higher than expected, values aro again disturbed. After all this manipulation of supplies and prices, the organisations previously mentioned pay the premium they promised to guarantee themselves. It is obviously immaterial to them what the retail price of Danish butter is so long as they know they can dispose of it readily. It is also in the interests of Danish dairies that speculation be encouraged in the open market, for they are assured that the return for at least 16,000 casks shall be so many kroner per 100 kilos higher than the open market price. Referring to the fact that prices are higher for Danish than for other imported butters, the correspondent states that the difference does not reflect variations in quality, it being agreed by experts in tho trade that in actual butterfate New Zealand qualities (New Zealand sends tho bulk of colonial supplies) exceeds the Danish standard, while Canadian and Australian are equivalent, with soma dairies even better. _ Lower prices are paid because Danish dairies have captured the British market and nurtured it to such an extent that they are now in a position to command a premium for their produce. The public insist on Danish butter as the best butter, and in this respect the housewife pays for her ignorance, at the same time providing tho speculator with facilities for profiting at her expense.