ENGLISH BUTTER MARKET

Otago Daily Times, Issue 23637, 22 October 1938, Page 19

ENGLISH BUTTER MARKET

THAT "AUTUMN RISE” STOPPED BY WAR FEARS TOOLEY STREET “STANDSTILL” (From Our Own Correspondent) (By Air Mail) LONDON, Sept. 22. Blame the Czechoslovakian crisis for the failure of the English butter market price to produce an autumn rise! In June and July Tooley street fully anticipated prices during September to reach the 130 s mark and more But the uncertainty of the European situation, the fear of war together with other factors, have all tended to keep the price down. To-day, Tooley street can give no forecast as to the future. So long as the European crisis persists, so long will the market remain uncertain, is the general opinion. During the past fortnight, in which there has been a steady easing in the price of New Zealand butter, it is reported that business in Tooley street has been practically at a standstill. The majority of firms have been “ working on stocks.” This has been caused largely because of the knowledge that, in the event of war the British Government would take full charge of all buying and selling operations within 24 hours. Finns have not wished to run the risk of finding themselves in the possession of large stocks and facing a probable financial loss. PUBLIC’S REACTION

In addition, there has been a quietening in the public’s demand. People, generally speaking, would appear to have been spending cannily, a conclusion which is supported by the fact that there has been a steady increase in the savings bank returns. The total banked in the last three months is equivalent to the sum saved during a year in the normal course of events. War insurance risks have also given the market considerable worry Business has been restricted by the almost prohibitive rates asked by Lloyd’s underwriters. The new rates are:—From the United Kingdom to Australia and New Zealand, via Suez, 30s per cent, outward and 60s per cent, inward; via the Cape. 20s per cent, outward and 40s per cent, homeward; via Panama, 15s per cent outwards and 40s per cent, homewards.

With the easing ot the political situation and the conclusion of some kind of satisfactory settlement (“ though goodness knows what we can call a ‘ satisfactory settlement,’ ” is a frequent Tooley street comment), it is hoped that confidence will be restored and that the butter market will return to more normal conditions. One opinion is that the present price (117 s for New Zealand finest) is “ dragging the bottom,” and that an upward tendency, following renewed buying, would result upon more settled European conditions. CONTINENTAL INFLUENCE

In addition to the war fear, a second important factor has influenced prices and added another reason for the nonmaturing “autumn rise.” In June and July, it became apparent that no butter could be expected in London from Russia, the Ukraine, and Siberia. In the ordinary course of events, this would have meant a reduction in supply of some 560,000 boxes. Consequently. opinion regarding an autumn “ shortage ” was hardened. An unlooked-for counter, however, was the abnormal increase in supplies from Latvia, Esthonia, Sweden, Finland Lithuania, and to a lesser extent Holland, despite the fact that duty of 15s per cwt had to be paid. This unusual expansion was accounted for by a reduction in demand by Germany and by an exceptionally good Continental season.

At the present time butter stocks are, contrary to the summer anticipation. even higher than usual for this time of the year, representing six weeks’ supply. It is reported, however, that they are beginning to decrease, and that there will be something in the nature of a rapid decline from now on.

The fact that, from August 1 to September 17, gradings of New Zealand new season’s butter are reported to be 114,000 boxes (or 3000 tons) down on last year has been carefully noted, together with the information that Australian production is considerably heavier than last year, but that shipments have at present, not increased. Reports regarding the colonial cheese market are that it is statistically sound Buyers are storing Canadian purchases in that Dominion until the war risk insurance position is clarified A warm English September has also meant a slightly increased cheese consumption.

It is reported by the Imperial Economic Committee in its “ Weekly Dairy Produce Notes ” that the output of margarine in the United Kingdom declined during August, but was about 13 per cent, larger than in August. 1937.