PRICES FOR BUTTER

Otago Daily Times, Issue 23369, 8 December 1937, Page 16

PRICES FOR BUTTER

LONDON MERCHANTS' VIEWS , COMMENT ON DECLINE (From Our Own Correspondent) '.V * (By Air Mail) ■: & £ LONDON, Nov. 18. i Tooley Street merchants do' not ; think th.at trie sharp drop in New.;- ; : Zealand butter prices' this Week' is" 1 * the beginning of the seasonal decline. Although prices for finest New Zealand salted have fallen from 154/152s to 138/136s during the week, general opinion is that this movement will shortly be ar-' rested—for a few weeks at least. The London; manager of a large firm handling New Zealand produce said • that the retail price of •butter in England v: had: risen too high. With butter at Is 6d per lb and Is 9d for special there had been, a big advance in margarine sales, which 8 were believed«to have doubled in J ; a"' week.,. ■r ■ . ■ s*, The result was'a marked check "ip*, butter consumption. Large Myers .> consequently felt that prices: reached:*,a dangerously high i •;le^el-l;-and were, keeping off the 'market the hope of forcing wholesale down. This had come about, but',at }& was just a question, of hbw buyers could continue with only" small purchases. A return to heaysfe buying in the hear future mightr' easily cause;.an upward ;Swing?;io£,£ at least arrest the downward trend."' • This was the more likely as the serious position through foot and > mouth disease in Germany, Hoi- '; land, and now the threat of a spread in England, together with the con*, tinued drought in South Africa,! made it unlikely that the market would be over-supplied for some. '. weeks. Prices were bound to fall, sooner or later, probably to below ! ; 110 s, but he did not think the ' break would occur much ■ before Christmas.

The position in South Africa might be the determining factor, as that country recovered very quickly- •■ with rain and might turn fromfatr;.. importing to an exporting country in a fortnight. --•■- ?■ The retail price of butter has tbr 'i day been reduced to Is 4d and Is sd/:,,' per lb, and this was described by the principal of another large firm"ss; as a possible impetus to a rise in wholesale prices. The reduction in retail prices had already induced more confidence in the market. .As.-. ■, it was definitely not over-supplied at present, an increased demand would probably cause a rise irr wholesale prices. Another merchant stated, how- • ever, that he thought plenty of butter from the Dominions could be ex- . ~„ pected in the next few' weeks to counteract the reduction in Continental supplies, and that a recovery : in wholesale prices was now unlikely. There was also the question of whether the retail price reduction to Is 4d and Is 5d would be sufficient to restore consumption,, to its former level. .--:;<;'