LOWER BUTTER PRICES.

New Zealand Herald, Volume LXII, Issue 19195, 8 December 1925, Page 10

LOWER BUTTER PRICES.

SHARP DECLINE IN LONDON, THE PROSPECTS DISCUSSED. OF STORED STOCKS. UNDUE PESSIMISM DEPRECATED. Butter prices in London have registered another sharp decline according to a cablegram received yesterday by Joseph Nathan and Co., Ltd. Butter is quoted at 184s to lS£s per cwt,, against 194s last Thursday. The cablegram states the market is slightly steadier, but there is "nothing doing." The latest decline in the market has been fairly .rapid. A fortnight ago New Zealand butter'was quoted at 206s to 208s. Before that date the market had been weakening since the peak prices of 232s to 236s .were reached two months ago. That high level was reached under a threat of scarcity due to the seamen's strike. Within a week, on October 15, butter was back to 216s to 220s and subsequently, although there were several checks, had fallen to 206s by November 19. Commenting on the latest quotations, a prominent exporter stated yesterday that they couUl not be regarded as more than nominal. There was "nothing doing." no business was passing in London, and the market would not be really tested until the new season's make commenced to arrive toward the end of the month, tor instance, the Tainui was due at- London about December -17 or 18. The market was practically bare of New Zealand stocks »t present except stale butter which had been long in store. The Use of Preservative. Mail advices received bv the Aorangi yesterday stated that Tooley Street operators were showing an extraordinary prejudice against stored butter, especially that without preservative, which they declared had deteriorated in store. From condemning utterly the use of preservative, the trade had now made a complete volte face and recommended that it be used. It was difficult to forecast the market but a hopeful sign was that Danish butter was quoted at 205s f.0.b., which was the equivalent of 210s in London. From that it was justifiable to conclude thatnew season's New Zealand butter would make more than 184s. The position seemed to be that meanwhile London was holding off stored butter* toward which the buyers took a very critical attitude. They were watching the dates on grade notes carefully, and, even if butter stored in New Zealand, were regraded just before shipment, it would not be effective, as /the trade was also examining churning dates. It was therefore essential that New.Zealand should guard the high reputation of its product from a general charge of staleness. Reduction o! Advances. A truer basis of values should be obtained within a few weeks when new season's make came on the London market. A "bearish" factor was that several heavy shipments were expected to arrive shortly and buyers were holding off in the hope of buying cheaply. But the very iac£~that they were abstaining at present meant that larger supplies would be taken later t-o fill requirements. Until these "bearish" and "bullish" factors were reconciled and equilibrium reached. NewZealand producers would not be certain where they stood. At the same time there seemed no justification for undue pessimism. Meanwhile the Importers' Association in London had advised that advances to factories were /,to be reduced from Is 5d to Is 3d. This no doubt would affect he producers by pay-outs 'being reduced, starting probably for November butterfat. The exporter thought, however, that it was wise in the present uncertainty to pursue this cautious policy. If the iaarket turned out better, the producers would get the benefit later. Cheese is quoted in the cablegram to Joseph Nathan and Co.. Ltd., at 110s to 1125.. The exporter remarked that the position in this , section of the market seemed fairly sound. Cheese was never subject to the same market fluctuations as butter. Moreover, the supply position at present was good in that stocks of Canadian and American were running low just as the new season's make from New Zealand was coming on the market. LOCAL PRICES REDUCED. ALL BRANDS AFFECTED. A reduction of one penny a pound will be made in the prices of all brands of butter as from to-morrow. The retail rates will then be: Superfine Is 9d a tsound, first grade Is Bd, second grade Is 7d. FURTHER FALL PROBABLE. REVIEW BY MR. GOODFELLOW. [BY TELEGRAPH.- —OWN CORRESPONDENT.] HAMILTON, Monday. A review oi the marset conditions for the sale of New Zealand butter was made to-day by Mr. \V. Goodfellow, managing director of the company. He said the London market was comparatively good at the moment. This was only due to the Christmas demand, but as soon as buyers had secured their requirements to carry them over the holidays it was obvious that there would, be a substantial fall in the market. During January approximately 14.000 tons of New Zealand butter and 7500 tons of Australian would be available •for the British market. Butter would also be arriving from Denmark, Argentina and other countries. The forward position, however, was entirely satisfactory, due to the reduction by approximately 20 per cent, in the exportable surplus from New Zealand. I The American stocks were considerably lower than last, year, and there was a possibility of considerable quantities of both Danish and New Zealand being required to fill the American demand. ft was exceedingly difficult to forecast the extent of the January fall in values, coir.e authorities estimated that the marke would go down to from 160s to 170s. However, these very low prices would and could no doubt be obviated by New Zealand factories cabling their London agents fixing the minimum selling price. In this way it might be possible to temporarily prevent the market going below 180s, but without a central authority acting on behalf of the companies their action would he spasmodic, and to a large extent ineffective. Mr. Goodfellow concluded by saying that this was another glaring instance of the necessity for the establishment of absolute control. Until the board had absoluto power it was impossible to do anything worth while by simply tinkering with the market. Regarding the advance payment, Mr. Goodfellow said he desired to correct the report published recently to the effect that the company's Otorohanga factory had paid out Is on November 20. That was incorrect. The company's payment was Is 4|d per lb. butter-fat. Uniform payments were always made by the comP. an y _to all its suppliers irrespective of the factory supplied.