WORLD MARKET PRICES

Taranaki Daily News, 25 November 1930, Page 2

WORLD MARKET PRICES

IMPROVEMENT IN METALS I RAW MATERIALS MOVE UPWARDS. ; THE POSITION OF FOOD PRODUCTS. (Special Correspondent). j Wellington, Nov, 22. It seems that for the present at least mo c t of the industrial metals and some of the raw materials with world markets have reached, their lowest level, for from mid-Oetober to mid-November the general trend of pries movements has been upwards. Standard copper on spot (London quotation) has risen from £42 18s 1J to £49 6s 3d. This substantial advance is somewhat superficial and is due to an agreement having been reached by producers of 90 per cent, of the world output to restrict output by 2000 tons a month, this being estimated to be the present excess of supply over consumption. Spelter and tin also show improvements, but lead is unchanged. Thun of the four base metals three have advanced and the other holds its price. That seems to indicate that the downward trend has ceased for the time being. There is no doubt that the fall in commodity prices has been overdone. There have been similar occurrences in the past, none'so wide in extent or so serious in result. It was inevitable that the great gap between the selling prices of commodities and the cost of production should have been bridged, or efforts made in that direction in greater degree by lowered costs and, to a lesser degree, by some recovery of prices from their depressed levels. Producers generally must accustom themselves to a lower , level of values, but by economy and sacrifice fairly distributed by all concerned the present low prices can be made to yield a profit fo producers, and until this profit is realised there will be no real prosperity in the world. Prices have been and are still very low, so that production has had to be curtailed, and that has resulted in increasing the volume of unemployed. Prices cannot rise very much because as soon as a profitable level ib reached production will expand.. Among raw materials it is particularly interesting to find cotton and rubber

showing some slight improvement. The price gain in cotton over the month is exceedingly small, but nevertheless significant, for it is some indication that economic conditions in India and Asi.. generally are improving. It is these people that absorb most of the cotton textile manufactures, if their condi tions improve the conditions' in Lancashire must also improve, and. improvement in Britain would be quickly reflected in New Zealand and Australia. No effort has been made to restrict the output of cotton, world supplies of which are ample for all requirements. Raw cotton is selling at less than 6d per lb, while at one period of the post-war - years it sold at 13d. ; Rubber went as low as 3 7-8 d per lb and ii' now up to 6d. Before Eastern I plantations were developed Brazil wild . rubber sold in London at about 2d pel I lb. Production costs in the East have been greatly reduced in recent years, but probably no estate could make profits with the price at 3 7-Bd. An authority on the industry • emphasises the importance of the extent to winch Asiatic ownership of rubber estates has increased both in Malaya and the Dutch East' Indies since 1922-23, and this is mainly attributed to the restricted pol- > icy adopted by British planters in 192-. ' It is calculated that 5 per cent, of the 1 rubber industry is now in Asiatic hands, ’■ and owing to the virtual absence of overhead, charges, which the British com- ‘ panics have to meet, .tlie native grower ' can produce profitably with rubber at a 1 very low price. ’ While base metals and raw materials show an upward trend food products continue their downward . course. The quotation for wheat in Chicago has ialien. Th 1 wheat position is affected by the dumping tactics adopted by Russia. Re2 liable London marketing reports state r that up to about the beginning of Ocj tober this season’s shipment from Rus--1 sia to all countries amounted to about 16 600,000 bushels, with a possibility that an additional 32,000,000 bushels mav be sliipped before the next crop , becomes available. Students of o ' situation, however, regard it from the , possibility of Russia in the future bei- in" able to resume the position she held r in pre-war days. This is quite probable and discounts the possibility of dollar wheat in the near future. Butter, mutton and lamb are lower than a month ago. Butter is lower than 3 it was in July 1914. Wool, butter, cheese a and frozen meat are practically all be- - low the pre-war level, while costs of - production are on the post-war basis, and to justify this some people suggest doles to farmers, establishing cottage farms and placing more people on farm lands. The costs must come down before people will be tempted to go farming at present prices.