MARKET FOR BUTTER.

New Zealand Herald, Volume LXVII, Issue 20628, 29 July 1930, Page 11

MARKET FOR BUTTER.

IMPROVEMENT IN OUTLOOK. HIGHER PRICES MAINTAINED. UPWARD MOVEMENT EXPECTED. "Tho outlook is certainly brighter than it has 1 iron fur so mo limo and an improvement in butter prices may reasonably bo expected," said an Auckland dairy produce merchant yesterday. The latest Loudon cablegrams reported a steady demand at the higher prices which were being obtained last week. Tho general impression was that tho market was moro likely to improve with tho fall of tho season at Homo ilian to

decline again. Experience during the past Season had shown that prophecies wero liable, to bo upset and it was difficult, to provide, a definite forecast of price movements during tho next few months. It appeared likely that tho upward movement would lend to prices at about 150s during the early part of the season now opening. "I expect an advance of 10s on to day's prices before the new season's butter begins to arrive on the London market," ttie agent said. Between tho end of July and the beginning of November last year butter prices had risen from about 170s to about 182s. Assuming that the difference between the price levels of tho respective seasons would remain approximately stable, this supported the expectation that the return on butter would be about 150s during the next few months.

A movement in tho local market unfavourable to the producers wa» also commented on. Finest butter for home consumption was bringing only Is 2d per Hi, equal lo about Is OJd f.o.b. This meant that, in contrast with the position a month or two ago, tho farmers were really losing a little on sales for home consumption in comparison with export prices. However, this position was unlikely to last very long, particularly if an improvement occurred in tho London market. The opinion was expressed that heavy production in the Dominion and in Australia had been partly responsible for tho recent market difficulties. It had always been forecast that if both countries had a heavy output simultaneously the effect would be shown in tho returns. The past season was the first in which such a clash of production had really occurred, and there was no doubt that this had had a lot to do with the low level of values obtaining. The absence of forward buying was remarked on by another agent. A month ago a certain amount of butter had changed hands at Is 2d per lb f.o.b. It appeared that prices were expected to becomo stabilised somewhat lower than thoso which ruled in tho early part of last season. This was expected by tho New Zealand producers, ho believed. It should not bo regarded as a calamity. It was quite possible to mako butter-fat pay, even at Is Id a pound. A price of Jsor-; 011 tho London market meant

about Is 2id for the factory at normal rates of exchange. The present abnormal exehango position allowed an addition of nearly id a pound.

WORLD SURPLUS SUPPLY. GRADUAL ABSORPTION. QUIET, STEADY TRADING. [J3Y TELEGRAPH. —OWN COIIRESPONDENT.] HAMILTON. Monday. "Quiet, steady trailing has characterised the London butter market during the past five weeks," stated Mr. \Y. Goodfellow, managing director of Amalgamated Dairies, Ltd., in his monthly report to tho suppliers of the New Zealand Cooperative Dairy Company, Ltd. A healthy demand from the Continent had strengthened the position from tho sellers' point of view. There had been the usual seasoual decline in New Zealand sales, but it was satisfactory to note the heavier clearings compared with the same period of last year.

Creator consumption had taken place in America and on duly 1 slocks were reduced to 6600 tons more than on tho samo date last year. The indications wero Unit tho world's surplus production was beini* absorbed gradually, in spite of the adverse economic conditions. The average weekly delivery of butter in London bad been 833 lous during tho last month, ns against 705 tons for the same period last year. On July 1 there was 23.400 tuns of butter in store. The f.o.b. market had been very quiet, but isolated sales bad been rnado at up to Is per lb. for finest early shipment. The cheese market had quietly improved. There had been n shortage of coloured and a premium of up to 6s had resulted. Stocks of cheese were estimated at 14,572 tons on July 1, or 1500 tons more than in July, 1929. Interest in the f.o.b. business had not been pronounced, but. some business had been done at up to 73d net.