TRADE AND FINANCE

Otago Daily Times, Issue 19845, 19 July 1926, Page 7

TRADE AND FINANCE

** FORTNIGHTLY REVIEW. STOCK EXCHANGE DEPRESSED. WOOL AND BUTTER PROSPECTS. (Press Association —Bj Telegraph—Copyright.} LONDON, July 17. (Received July 18, at 5.5 p.m.) Stock Exchange business received something of a check during the past week, chiefly due to the continued stream of new capital issues and the declining hopes of an early reduction of the bank rate, which was responsible for a slight setback in gilt-odgeds. But, while there ha.s been a slight pause in Stock Exchange activity, prices have been wonderfully well maintained. The Spectator points out that, while the general response to fresh issues continues to be satisfactory, there is a growing tendency for their success to depend largely upon the operations of mere premium hunters. Thus the recent South African and City of Coventry issues did not attract ‘‘stags,’’ with the result that the underwriters were left with considerable proportions. The half-vear’s trade returns showed declines of £75,000,000 in imports and £65,000.000 in exports, which, even after making allowances for the lower prices, reflects the intense trade depression. The only redeeming feature is that, owing to the heavy decline of imports, the actual visible adverse trade balance of £200.000,000 for the half-year is rather better than the first half of 1925. Tho conditions of the foreign exchange market have been feverish so far as the French and Belgian, and even the Italian, currencies are concerned. It is impossible to forecast the result of the French Government's attempt to obtain special financial powers, but it is undoubtedly disquieting that the Anglo-French debt settlement did not produce a more lasting effect upon the French exchange. WOOL PROSPECTS IMPROVE. The continuance of the coal dispute is forcing the mills to work short time owing to the shortage of coal, and has destroyed all chances of a revival of the Yorkshire trade, and Bradford has, consequently, suffered a general stagnation for some weeks. Nevertheless, the wool sales opened with a better tone than the Home trade under these circumstances expected. The Continental demand for merinos remains strong and persistent. The outlook for fine wools is decidedly healthy, and even the Yorkshire merino consumption ha s been well maintained, and prices held firm. Crossbreds recently had a bad time. The export trade is extremely difficult owing to the scarcity of the demand. Prices have been cut to a level which is unworkable for tops and yarns. These are at present cheaper than the raw material, and some drastic adjustment of values is necessary before prosperous trade is possible Messrs Dawon’s report on the wool outlook states: ‘There are indications ot improving conditions in the United States mills, and an undoubted betterment in Germany, both financially and in the demand for wool. France and Belgium are still showing interest, as many people prefer to invest their money in the raw material than in their declining currencies. The prospects of the coming year’s Australian clip are better than was anticipated. There are many signs of im provement. These are more evident at the cloth end than in tops wool, but this is good anyway for permanency. The demand at present favours fine cloths rather than crossbreds, but the latter’s relative cheapness will sooner or later attract attention. The past year’s financial losses will be felt for some time, but it is generally realised that the worst is over. Confidence is returning and a sounder position is being steadily established. DECLINE IN APPLE TRADE. We are approaching the end of the Australian and New Zealand fruit sesson. Bo far as the aggregate shipments are concerned it has been a record season, for Australia and New Zealand exported over 3,000,000 cases, which is about 1,000,000more than was ever sent before; but financially the season must rank as the most calamitous in the history of the trade. The fruit has shown less signs of disease than usual, but there has been an exceptionally high percentage of smallsized fruit. So far as condition is concerned, except for the disastrous turn-out of one hold of the Port Adelaide, the amount of shin damage to apples has not been great, but pears have not been bo fortunate. The market has never been good from the beginning. Without doubt the arsenic scare, duo to the condition of American apples prior to the first Australian arrivals, had definitely reduced the popularity of apple eating throughout the country, and in view of that it is very doubtful whether, apart from strike difti culties, the market could ever have ah sorbed the record quantities of fruit sent at anything like profitable prices. As an example of the distinct decline in the popularity of apples, one of London’s largest multiple tea-room firms has never stocked uncooked apples since the arsenic scare. No appreciable amount of arsenic has been found in any Australian apples It was not entirely absent, but it never appeared in sufficient quantity to lead to a prosecution. The season has been marked by an expensive advertising campaign financed by the growers, the Commonwealth Government, and the Fruit Traders’ Federation, but a® things turned out it appears that the retailers alone profited from the campaign. Their prices to consumers have been the same as in previous years, when tho wholesale prices were at least 33 per cent, higher. Since the strike the average wholesale price of apples has been about 2£d per pound, but the average retail price is seldom less than 7d. The general strike produced a tremendous congestion of fruit, but tho consumer did not derive any benefits, either in apples or Spanish oranges, which at one time sold wholesale at the remarkably low figures of Is to 3s a box. It would be a great advantage if the arrivals of apple boats could be better spaced, if this could be done. Ships coming by different routes and speeds often arrive at one port in a bunch. BUTTER MARKET STAGNANT. Butter, like fresh fruit, is suffering from tho excessive retail prices. Despite the recent low wholesale values, butter is still being retailed at Is lOd to 3s. but the most important factor in keeping down the prices is the excessive supply of both colonial and Continental. Never before has there been such a large pouring in of Continental butter, while the policy of storing colonial in an attempt to maintain prices has resulted in unprecedented accumulations. The official figures, which do not reveal the contents of the private cold stores, show that at present there are 1,000,000 boxes in cold store. In view of this, and the heavily reduced consumption in the industrial areas owing to tho strike, it is the considered opinion of many importers that low prees have come to stay, at any rate, for some months.— A. and N.Z. Cable.