LOSS TO FARMERS.

New Zealand Herald, Volume LXVIII, Issue 20823, 16 March 1931, Page 10

LOSS TO FARMERS.

GREAT WHALING ACTIVITY.

NEW USES FOR THE OIL.

COMPETITION AGAINST TALLOW.

The news of tho arrival at Stewart Island of the whaling factory ship Sir James Clark Ross, with a world's record catch of over 100,000 barrels of oil, is not good news for New Zealand primary producers. The large increase in the production of whale oil in recent years is thought by men prominently connected with the tallow trado in Auckland to be largely responsible for tho very low prices now ruling for that product. This view is borne out by the fact that although stocks of tallow in London last December were almost negligible, amounting to only 500 tons, tallow was selling for only £24 a ton, compared with £3B a ton in December, 1926, when tho stocks in London totalled 9000 tons. Tho exports of tallow from New Zealand vary from 20,000 to 22,000 tons a year, so that the loss to New Zealand producers caused by this new competition is considerable. Huge Contract lor Oil. The production of whale oil during the present season has probably been very largely stimulated by n contract, let by ono of tho largest English soap manufacturers for 250,000 tons of oil. at £25. a ton, spread over this season v and last. Totail contracts probably amounted to 500,000 tons.

Whale oil and tallow aro direct competitors for use in the same industries, providing the base for the manufacture of many soaps, lubricating oils find margarines. Compared with tallow whale oil lacks body, but when it is to be used in the manufacture of soap it is hardened and given body by a special process.

The extra cost of that process means that, the relative price of tallow should bo about £3 or £4 a ton above that of whale oil, but owing to the large contracts secured by thp whaling companies most of their output has been disposed of for £24 or £25 a ton, while the price of tallow has recently been depressed to £lB or £l9 a ton.

Surplus Oil Sold Cheaply. The surplus catch of whale oil has been sold to small firms, usually buyers of tallow, at prices ranging down to nearly £l2 a ton, which has had the effect of further depressing the tallow market. Whale oil could not compete with tallow for the manufacture of margarine until quite recently, when a new refining process was evolved. In New Zealand, however, regulations prohibit the use of any products other than pure beef tallow and vegetable oils in the manufacture of margarine.

Another factor adversely affecting New Zealand's of tallow has been tho depreciation of the South American currency, which has enabled exporters in that continent to receive a bonus of approximately 28 per cent.

"Taking .into account tho large world decline in commodity prices and the effect of the South American currency depreciation, which lias enabled exporters there to sell at a profit on a falling market, there can bo no doubt that tho operations of tho Antarctic whaling fleet have caused a very considerable loss to New Zealand producers," said a prominent Auckland tallow merchant in commenting on tho position.