EXCHANGE RATE

Otago Daily Times, Issue 22356, 1 September 1934, Page 8

EXCHANGE RATE

ADVANTAGE TO CONSUMERS I OPINION OF DAIRY BOARD I ~~ j (Special to Daily Tims.) WELLINGTON, August 31. Throughout the season the exchange rate has been maintained at a premuim of 25 per cent, over sterling, and this has been of inestimable advantage to producers (states the tenth annual report of the New Zealand Dairy Hoard). At 24 Added. At par. p,c. return. Butter at 75s 0.94 d S.6ld 1,67 d. Cheese at 45s 3.85 d 4.75 d 0.93 d As compared with exchange at par, the increased return to producers has been approximately 1.3 d per lb butter-fat for whole milk cheese and over 2d per Jb butter-fat for cream suppliers. As from August 1, 1934, the fixation of the exchange rate is in the hands or the Reserve Bank of New Zealand. The bank lias issued a statement that the present premium is unlikely to be altered for some considerable time. A slight adjustment was made in the rate as from. August 1, 1934,'and the exchange premium on sight drafts on London "is now 234 per cent. j BOARD’S EFFORTS WITH 1 SHIPPING. The efforts of the board in this direction have been somewhat similar to previous years. Far from being fully satisfied with past results, it has been found most difficult to effect any material improvement in the advancement made during the years the board has controlled this necessary adjunct to our industry. The policy of regulating shipments in order to provide a continuity of supply has been rigidly adhered to, both in butter and cheese, and undoubtedly this procedure has come to stay. Its benefits have been proved time and again. Whilst carrying out this policy, the board has, apart from working to scheduled monthly quantities for arrival, endeavoured again to spread the monthly quantities into weekly periods. Owing to the condition of loading overseas vessels in this Dominion, combined with the unsettled state of waterside labour over the past six months, it has been difficult indeed for the great majority of vessels loading dairy produce to adhere to the loading itinerary arranged at the date of allotment. Very few vessels have been able to depart and arrive on due date. Reference is made to the board’s regulation of shipments in “ The Planning of Agriculture ” (Astor and Murray) recently published in England. They state that the board’s handling of the problem is one case among many showing the success of combined action by agricultural producers. They go on to say: "In 1925, before New Zealand varied from 98 per cent, above the monthly average to 96 per cent, below, the actual variation in exports was 207,000 cwt in February to 4000 cwt in October. PRICES DEPRESSED. The result was that prices were very much depressed during the peak export season and were high when there were no shipments. By 1931 the board had succeeded in reducing the wide variations by almost one-half; they varied between 58 per cent, above and 46 per cent, below “e average monthly shipments; this resulted in a marked diminution in the Ence fluctuations, and when the unduly eavy burden of supplies at the beginning of the year was removed the level of butter prices during the first part of the year, when New Zealand supplies are heaviest, was raised considerably. In 1925 the price during the first five months of the year, when supplies are heaviest, averaged 8 per cent, below the monthly average price; in 1931 it was 1 per cent, above the average. In view of the heavy shipments of buttter from the Commonwealth of Australia, the New Zealand Board decided to approach the Australian Board to seek its co-operation in regulating the quantities going forward to the United Kingdom. The Australian Board agreed to co-operate, and as from December 18 last 20 per cent, of their export butter was withheld from shipment, and gradually released as production diminished. It is hopod that if the Australian annual exports are to continue in the vicinity of 100,000 tons the regulation of shipments will become the permanent policy of the Commonwealth Board. REGULATION OF SHIPMENTS.

New Vessels.—lt is pleasing to record the large number of ships at present under construction for the New Zealand trade, in order to replace some of the older type of vessel. The first of these ships, the motor vessel Port Chalmers, has already made her maiden voyage, and no fewer than 10 additional ships are on the stocks at the present time. We trust tbs confidence of the shipowner m the export trade of New Zealand will not be misplaced and that the growth of exports are not restricted by the application of quotas. West Coast Shipments.—The quantity of butter and cheese shipped to the west coast continues to increase, and in order to supply this market with a matured cheese as desired, the basis of shipment on grading date will this season be on a somewhat similar parity with London. Anf endeavour will also be made to keep London and west coast butter shipments to a corresponding grading period in order to ensure a continuous supply., It will be remembered that (luring the negotiations in London last July (1933) when our freight agreement was renewed for a further term at a 6 per cent, reduction in rates, the Blue Star Line was admitted as a party to our contract. During the season under review they provided nine vessels for the purpose of carrying their portion of our produce, and altogether they lifted 423,793 boxes of butter and 120,247 crates of cheese.