YEAR’S BUTTER PRICES.

Taranaki Daily News, 20 January 1923, Page 11

YEAR’S BUTTER PRICES.

LONDON MARKET IN 1922. FLUCTUATIONS IN PRICES. GLOOM OF LAST NEW YEAR. The price of New Zealand butter on the London market to-day is no less than GGs per cwt. higher than it was at this time in January, 1922, and almosr level with the mid-winter price which ruled in 1921 just prior to the phenomenal rise which took place in July and August. There is thus every reason for satisfaction and optimism because the price i«s good and the market has an appearance'of stability that has not been known since the days of Imperial purchase. The last six months of 1921 saw the bottom drop out of the market. In August 266 s was reached, a rise of sOs to 60s having taken plaee in the course of a fortnight, the rapid advance being attributable to severely restricted sales of Government stocks, the reduced output in England and the Continent, owing to drought, improvng industrial conditions and a stimulated demand partly through a period of Tow prices. The level reached was probably not of any benefit to New Zealand, being rather the concern of London merchants. What then happened, however, was of the most serious moment to New Zealand, for at the beginning of the dairy season of 1921-22 prices crashed. The causes were partly reduced consumption, partly the break of the drought, but principally the action of the British Food Ministry in liquidating huge stocks. With all this butter on the market the new season’s supplies were arriving and the position developed into a race for lower price levels. In November, New Zealand butter ■was selling at the July level, and then' in the course of six . weeks—tragic weeks for many a dairy-farmer —there was a drop from 204 s to 1265.

EFFECT OF CONTINENTAL BUYING

Thia was the position on New Year’s Day. 1922, —a position which made the conventional greeting of the period somewhat of a mockery. It had one good effect, however, one bright spot on the inside of the cloud —an enormous consumptive demand sprang up which’, together with Continental buying, quickly absorbed the bulk of old stored stocks, as well as the heavy supplies arriving in England from the Southern Hemisphere. A boom, possibly of greater advantage to London merchants than to many Now Zealand factories, followed, and in March the price jumped from 140 s to 1925. Rapid fluctuations then took place, but again of more interest to dealers than to purchasers. Tn April, the price dropnod to 182 s and rose again' to 189 s. Thon in May it tumbled to 1645, to make a meteoric rise to 230 s the next month, party through speculation. This price did not hold after Julv. Early in August it was from 192 s to 1965; the next month, it varied from 206 s to 218<s. rising to 224 s in October, and then gradualy falling with ono or two fluctuations until at the beginning of December last the quotation was 178 s to 1925. AN ENCOURAGING OUTLOOK. The arrival of the new season’s butter in quantity now made itself felt, and nn Dooember 9 the priep was 170 s to 1765. There was immediately a fear that another slump, that had been predicted for the period of heavy importaton into England from southern countries, about to fake place, but it did not eventuate. By the middle of December the price had crept up to 180s-184s. and during the last few weeks ii has advanced almost daily, until 198 s has been reached. Synchronising with thia unexpected recovery of the butter market is the improvement in the price of wool, and thus New Zealand faces the New Year with high hopes and renewed confidence. The good prices of butter nt? the flush of the season—a season which is witnessing a remarkable output—-it? a matter for national congratulation. Every soul will feel the benefit of the swelling stream of wealth that, will, in consequence, flow into the country. It will not mean that mnnv individuals will escape their folly of the boom days, but the community aa a whole will find solid reason for the hope that the paths of plenty lie not far ahead.