OUTLOOK FOR PRODUCE

New Zealand Herald, Volume LXIX, Issue 21245, 27 July 1932, Page 18

OUTLOOK FOR PRODUCE

PROSPECTS OF BETTER PRICES f —— EMPIRE'S GLEAM OF HOPE During the past week a gleam of hope haa appeared'among the dark clouds of depression that have for so long rested on the primary producers' horizon. Both the wool and butter markots in England have displayed a. rising tendency; indeed, a definite advance in prices was made. Butter has fluctuated considerably during the past six months, but it has risen from 95s to 106s to 108s in six weeks, making an advance of 6s to 7s during the past week. Wool, on the other hand, has been at a disastrous level for a long period with no indication of a rise. Merino wool suddenly rose from 10 per cent, to 15 per cent., and greasy crossbred 15 per cent to 20 per cent, above the June rates. This news is the best the wool grower could havo at the present juncture; it means that. the bulk of the New Zealand type of wool is between 20 per cent, and 30 per cent, better than it has been since the opening of the March sales in London. It is natural enough that the primary producers should receive the news of rising markets with some reserve. They have had too many bitter disappointments to be optimistic about the immediate future. He would indeed be an optimist who could see the present situation as a dofinite turn of tho tide, but it may safely be said that the markets haye at last given a gleam of hope. Fluctuations of Metals Base metals rose at the beginning of the month and rose again in the second week but, unfortunately, with tho exception of tin, have fallen again. The base metal market is regarded as an important indicator because rising values point to revival in industry, and revival in industry means rising values for dairy produce,* meat and wool. The better prices for butter and cheese may, to some extent, have resulted from the tariff on produce from Ireland. What influence the Irish situation had on the markot is difficult to say, but there can bo little doubt it played a part. Wool rose because of an entirely different set of circumstances, and the wool market really gives the more important indication of a change for the better. Increased competition from France and Germany was an important factor, but by no means tho only one. The market is heavily supplied, perhaps, but the statistical situation is not altogether unfavourable. A revival in industry generally would send wool prices steadily upward because there is not more wool in sight than would be readily absorbed. The situation in Europe was rapidly approaching a tremendous crisis. There was danger of a financial collapse on so colossal a scale that all the Governments were appalled at the prospect. The conference at Lausanno became the last hope. Statesmen realised that some measure of agreement at that conference was urgently necessary. That agreement was reached. British Conversion Loan Simultaneously Britain's £2,000,000,000 conversion loan was being offered. Within nine days tho holders of half tho stock hud converted, acceptances of conversion are still flowing in and only a very minor proportion of holders demanded payment. Interest thus falls from five per cent, to three and a-half per cent., and the significance of this gigantic financial operation is that it definitely opens an era of cheaper money which will stimulate all branches of trade and industry. The settlement of the reparations problem by the Lausanne agreement and the success of the conversion loan, are two important influences behind the rise in wool values. Industry quickly commenced to feel a returning confidence which meant activity in various branches of trade. If that confidence increases it will quickly be realised tho world's markets have been so depleted of stocks that there will be an unprecedented rush of buying orders. There is thus at least some hope the wool markets may firm and values rise still further, so that tho approaching new Zealand season's sales may see a very different atmosphere from those of the past season. A dragging influence is the uncertainty regarding tho attitude tho United States will adopt toward war debts now that the Lausanno agreement has cleared the way. If that country can see its path clear to follow the enlightened course indicated at Lausanne, the clouds will lift still more; if it docs not, the adverse influence must make itself felt for some further period. But tho world cannot stand still at the behest of United States politicians. If it cannot have the company of the United States on the road of progress, it will still go on—more slowly perhaps, at first, but on, nevertheless. Truly tho United States of America stands at the parting of the ways. Mr. Baldwin's Hopefulness "After Lausanne —Ottawa!'? In these words, Mr. Stanley Baldwin, leader of the British delegation that has departed for Canada, expressed the high hopo of the whole Empire, lie meant that, following on tho European agreement the Empire, by agreement at Ottawa, would be definitely on the high road to recovery. " We are leaving full of hope that we shall be able, as a further step toward the revival of the trade of the world, to crown the first year's work of the National Government by agreeing at Ottawa upon a policy of freer trade, which will lay tho foundation of a great expansion of Empire trade, to tho mutual advantage of us all," said Mr. Baldwin. With ihis sentiment, the primary producers of New Zealand will most cordially agree. This Dominion looks toward Ottawa with the very highest hopes, and the Lausanne agreement and the British conversion loan are but stepping stones toward the goal we aim at. It must lie apparent that we cannot expect to take all and give nothing. We want favoured right of entry to British markets, thereforo we must give Britain favoured right of £ntry to ours. There must be changes in the present situation. Change is inevitable. It is not possible to claim favoured treatment in Britain and at tho same time build tariff walls to shut out tho British manufacturer. The keynote of a trade agroGment is reciprocity, and it is necessary to concede an open door and a squaro deal to British manufacturers if we aro to expect Britain to accord our primary products a sheltered market. The situation is full of hope. Many endeavours have been made by economists and others to forecast tho exact period of the depression. They aro all likeiy to prove wrong. The history of all depressions is full of such prophecies falsified. It can bo said the trend of British markets now shows a gleam of hope, and it is conceivable the influences that havo operated to bring it about may be so supported and supplemented at Ottawa that the dark clouds will roll up and we shall at last see clear skies ahead.