The Butter Market

Stratford Evening Post, Issue 65, 14 October 1930, Page 5

The Butter Market

BANISH AM) NEW ZEALAND. WIDE MARGIN IN PRIGES. The margin of 30s to 34s in favour of Danish butter as compared with New Zealand butter, is by no means a record difference. For instance in March, 1925, the Danish price soared to 2355, while that for New Zealand butter rose to only 183 s, the margin thus being 525. These extreme variations are usually of brief duration. It is, therefore, worthy of note that since July this year, Danish butter has commanded a substantia] premium, it having been 20s or more during the greater part of the time. It is customary for the prices to come together at tbe beginning or the English summer. This year was no exception, as in May, Danish butter at 130s > was only Is above the New Zealand price. The margin remained small throughout June, but increased during July, and was 20s at the beginning of August, "when New Zealand butter rose to 138 s and Danish to 158 s. During that month Danish price s fell more than New Zealand, and the margin was reduced to 12s, but earlj in September, when the New Zealand prices began to sag ; the margin again rose. During September the margin fluctuated from 22s to 265. In the absence of any special information regarding factors influencing the market for Danish butter says the New Zealand Herald, Auckland merchants ascribe the present discrepancy in prices chiefly to the operation of the law of supply and demand. - Stackg of New Zealand butter in' London are unusually heavy, and there are large quantities oil the water. The Continental demand has an important bearing on the level of Danish prices. Germany ig at times a heavy purchaser of butter from Denmark, and it is possible that thi s is now keeping the price at a higher level than would be the case if the Danes were depending on the British market alone, although it is a little early in the season for the German demand to have assumed large proportions. "The present margin is no doubt partly due to supply iand demand, and partly to the fact that the Danes are better organised to sell on a weak market," one merchant said. "They set their price week by week through one central organisation, whereas abrut 27 houses are competing in the sale of New Zealand butter, and price-cutting is inevitable. In a strong market, when the buyers are keen to obtain supplies, this does not matter. As conditions are to-day. a lot of the heaviest buying is being done by a very few people, and, with a large number of sellers on the doorstep, it makes a buyers' market."