THE OTAGO DAILY TIMES SATURDAY, MARCH 26, 1949. THE WORLD’S WHEAT

Otago Daily Times, Issue 27040, 26 March 1949, Page 6

THE OTAGO DAILY TIMES SATURDAY, MARCH 26, 1949. THE WORLD’S WHEAT

The very real danger that worldwide surpluses would bring about a drastic recession in wheat prices has led the parties to the international wheat conference in Washington to persevere in their talks until a compromise has been reached. This is the third attempt that has been made in three years to obtain international agreement on wheat prices, and the present deal still must be ratified by the Governments of the countries concerned if it is to be effective. After the first conference, in 1947, the British Government considered that the proposed maximum price, SI.BO a bushel, was too high. Shortly afterwards wheat soared to $3 in Chicago, and Great Britain was an eager participant at the 1948 conference, at which a maximum of $2 was proposed. The United States Congress, however, failed to ratify this agreement. Boom prices continued and —except in New Zealand, where growers were held to low rewards —wheat averages increased substantially as farmers sought to participate in the golden harvest. The inevitable economic reaction is now in evidence. In the United States wheat prices are receding steadily, and the great exporting countries, the United States, Canada and Australia, are desperately eager to secure profitable markets for their surpluses. The Argentine and Russia, two large exporters which ignored both the previous conferences, are also concerned at the new trend in prices. Both sent representatives to Washington, though neither is prepared to sign the agreement. It was the hope of the exporting countries that guaranteed markets would be found for at least 505,000,000 bushels, of which total Russian exports would comprise 50,000,000 bushels. The Soviet delegates demanded an export quota of 75,000,000 bushels, and when the importing countries announced their inability to contract for more than 495,000,000 bushels from all sources an impasse was reached in which no solution appeared possible. The compromise which was announced in our cable news seems to have been based on the Canadian suggestion that the importing countries should revise their requirements on the basis of receiving guaranteed supplies from the United States, Canada and Australia. These three countries are now assured of a market for a minimum of 456,000,000 bushels for the next four years, the maximum and minimum prices for the first year being SI.BO and $1.50 respectively, diminishing 10 cents, a year until 1952-53. Outside the agreed range of prices for the quotas to be supplied by the three exporting countries transactions will be entirely free, and a liberal margin is left in which prices will be permitted to fluctuate to the advantage of either buyer or seller. The agreement will not become reality, of course, unless and until it is ratified by the Parliaments of the leading seller and buyer nations, but the need for co-operative action in the stabilisation of wheat prices has been made so evident in the past few years that the success of this third attempt to achieve accord can reasonably be expected.