WHEAT BUYING IN AUSTRALIA.

Timaru Herald, Volume LXXXIII, Issue 12903, 14 February 1906, Page 3

WHEAT BUYING IN AUSTRALIA.

THE F.A.Q. STANDARD. Australian wheat is bought and sold subject to its being of fair average quality, or, as it is briefly termed in the trade, f.a.q. In the case of small lots sold locally, about •which the buyer can easily satisfy himself byi personal examination, there is no difficulty in determining the quality and quickly and satisfactorily concluding a bargain. But it is different where large " 'parcels' (a ship's cargo .of 100,000 : or 150,000 bushels,, or . three or four cargoes) aie sold in. a distant' market 'like London ~\ or,- -Hull oi: Liverpool,, .sometimes -while still on the: water, not infrequently, indeed, before they leave Melbourne. Yet millions of bushels oi wheat destined for oversea ports find buyers as readily at the market price at the local railway stations in the Goulburn Valley or the Wimmsra, or the Mallee as. that, retained for local consumption. : There are ja number of factors in the. great international system of commerce which account. ;for this remarkable laeiiity with, -which wheat can be bought and "sold in -every 'grain" district.. Not the. least -important ic-f ihese factors is the f.a.q.- wheat standard Sstruck every year by the giaia trade section :of the Melbourne Qhtunbcr of, ; Commerce.> I This.is one of the most interesting, and icertair.'.y 0:12 of -the incst important and ■responsible, duties undertaken by any cominiercial institution in the .State.

Eve-y year, towards, the end of January or the hegiiir.ing of February, the corn t ■j trade section of the chamber...(composed of! men er.g;:g;tl in the grain trade) undertake I : tne .fixing of what, is accepted by the grain! ■trade of Australia and Great- Britain as ;the f.a.q. standard pf Victorian; wheat for ;the season. : All and .cargoes of ithe season's wheat are bought "and sold in 'accordance-with this ;staiidard. - If disputes arise as to the quality of parcels jor cargoes, either here or abroad, in the jlast': 1 resort, iri: nearly all cases, expressed :-or understood, it is fair average quality for; ,; which the market price is quoted and paid. il'he exceptions are few, and are specially ; provided for." ■ It is. of the first, importance,., therefore, for every farmer who has. wheat to sell, and.ffer every "grain merchant and; shipper: engaged in the .ttade, .tha:-; the greatest care; and precision shall be, taken, in fixing the i.e.q. ~standard. if it were iixed higher'than,, the average quality of the grain to be sold, then buyers would reject heavily, and endless loss and trouble would be incurred- by the trade; if lower, then the market price would' be less, and .producers wov.ld su&r loss. It- is anticipated that- Victoria .will have about 14.000,000 bushels for export this year, and even one half-penny per bushel less than its fair value on this quantity would mean a less of £29,000 to the farmers. Yet very little interest -is'-taken by the agricultural societies in assisting the grain trade section of the Chamber, of Commerce in this work of fixing- a fair average sample of the grain crop of the whole state. Their assistance would be welcomed. Indeed, it has been specially sought for -this year by the Chamber of Commerce in a circular sent out to-all agricultural societies and shire secretaries in the grain • districts, to which, so far there has been a poor response. Detailing the steps to be taken in fixing a fair average sample for each district, the circular states that '* it is absolutely necessary that an actual average of the whole crop;-of such district, including its fair proportion of prime, good, and bad, shall be made. In making each district's average, the collector must be careful to see that a proper proportion of each quality is included, and all mixed together, rejecting nothing. Oaty, smutty, pinched, bleached, and shrivelled samples must be included, as well as fair, good, and prime, but, of course, only,a relative quantity of each." It is pointed out by way of illustration that -Jib to £lb weight for eveiy 1000, bags of each quality estimated in the dis-1 trict should be mixed together, and thus the bulk sample would be a true average of the crop of the whole district. The : bulk sample of these district averages would J then doubtless become the f.a.q. standard for the state.

In the absence of this district co-operation and assistance, the samples," of averaging- them,' estimating' the j proportion of the crop they stand for, and ] the relative position they should hold one to another in making up the f.a.q. sample, falls on the corn trade section of the Chamber of Commerce. Each member before a given date collects as many samples as possible (about a quarter of a pound in each) from his men in charge of shipping operations at the ports, his buyers at the inland railway stations, country millers, and persons in the grain trade. These samples are accompanied by particulars of the bulk from -which they are picked, and how the bulk compares with the average- crop of the district where it was grown, as revealed in consignments at the ship's side, city warehouses, local railway stations, country mills, and grain sheds.* On a- given day the members meet, and the samples and reports submitted are dealt with. The judgment, of the whole committee decides what samples shall be -thrown into the f.a.q. heap. A certain proportion of prime, good, fair, inferior, pinched, and' dh-ty samples go in, and are mixed together in this f.a.q. heap, until in the opinion of the committee this mixture represents a. fair sample- of the season's crop. When this work is done the heari may, perhaps, weigh half a ton. The wheat is then measured and weighed, its weight per bushel (last year the official weight was 61£Tb) fixed, and hundreds of packages made up from it and sealed. ■ Several of these packages contain a bushel imd a. half apiece, and they are sent to London, Liverpool, and Hull respectively. The majority of the packages, however, do not contain more than 51b each, which are distributed to local members of the grain trade. None of these packages are ever opened, unless some dispute occurs over ;-.. sale of wheat. Then arbitrators are appointed, the sealed f.a.q. sample i« oy?r;pd. the sample in dispute compared wir: h hthe arbitrators, and their award given accordingly. The corn trade section of the

London Chamber of Commerce accepts, without demur, the f.a.q. standard fixed by the Melbourne Chamber, and framed the rules : for the settlement of disputes, -which bare long been accepted by the grain trade.

Prior to 1887 it was the corn trade of the London Chamber of Commerce which fixed the f.a.q. standard for Victorian wheat. The seller on this side had no voice in the matter, until the Melbourne Chamber began the work in the year named.

In New .South Wales and South Australia the local Chambers of Commerce fix the standards for their respective states. The same singular apathy on the part, of agricultural societies appears to exist is New South Wales in respect- to the -work of fixing the wheat standard there as in Victoria. Mr J. P. Macarthur (president of the Sydney. Chamber of Commerce), La declaring the wheat exhibition, open at. the Eoyal Exchange,. Sydney, on last week, referred to the difficulty experienced in, fixing the standard. The New- SouthWales Chamber of Commerce had this year, I lie said, in reply to 224 requests to agricultural societies for samples of grain, received only 26 replies. j There is one regrettable drawback to | fixing only one standard for wheat. It [does not pioa:;-:e clean fanning. The farmer who. by extreme pains, grows a- clean sample of grain, gets. no -more per bushel for it at the local railway station than his. neighbour, who' has allowed his fields to become folded with wild cuts and drake. X.r dues the farmer who produces a plump sample through careful seed selection ic- • ceive any encouiagemer.t -in the market price to persevere in this good work. Clean fields and careful sesd seleciion, in general, <ivcjuld.in a few years lais&the f.a.q. standard, so that, it- would be worth relatively, a penny or twopence a bushel more than it is tv.-day. This is worth striving io;-, ,but. practical members of the grain trade ray. much as it is desirable to eaiouvage work of this character, it cannot v.-«U bo dcr.e by fixing two standards. Great- improvement has taken place, it is pointed out by sane members of the grain trade, in the cleanliness of wheit sent to market duiing the last three or four years. Fallowing and manuring give plump grain and tdean crops, and farmers have found that these methods of farming pay better ~aaa the old slipshod way . ' putting in ;he crop, and it- is believed that in a, very few years they will have becr-me a!aic:--t universal. —("Argus.") I WHEAT BUYING IN TIMAEU. On coming across the foregoing accountof what is done in Victoria to obtain, ai standard sample for the dontrol of bargains in grain, we made inquiries as to what practice; of. similar kind, if any, obtains in Timaru. ■ . The result of these inquiries .shows that there is no: organisation in existence to prepare standaras for the eoiony, and that even in local dealings, there is do generally recognised standard for South Canteibury. The system, practised by one who has dealt in great quantities of grain, is.to send Jkone ahead of his first ship- . ment. if possible, a sample representing the "f.a.q."—the fair average quality of that cargo. On this sample the wheat is bargained for, and the buyer has to take the consignment- unless it is proved to be : below the quality of the sample. This is exactly the course that would be followed with a jcolonial standard, except that individual sellers would be bound by a standard sample not supplied by themselves. Sub-

sequent sales are referred to the firstsample, unless an appreciable alteration has taken place in the quality, and then ai fresh be sent. Some firms work in a similar manner locally. One of them, on the earliest chance, procures • samples as nearly as possible representing the crop for the season, and this is sent to all their colonial clients. When they ship to South Africa or England, similar samples go oyer first for reference. As it is desirable to send a standard lot before the earliest shipments, it may be necessary to despatch it before the crop is in, relying on anticipations. In this case, a sample is made up of the last season's wheat, so as to represent as fairly as possible the crop in sight. This is taken as an actual sample, -and the first shipments are sold and bought by it. As soon as the crop does come in, a genuine I sample is s*nt off. This is not done by all shippers, but it is understood that most of them use some modification of the principle , South. Canterbury has for many years been -without a Chamber of Commerce. But in other centres, this body undertakes the making up and distribution of grain samples, sending them to all other centres and important firms in the colony, and they are ready for immediate reference, and stand unquestioned as indicating the exactgrade of the grain. Thus the Southland Chamber of Commerce gathers in samples of oats, ancft assesses-and-grades them as "A," "B," "C," ana h f.a:q." Lower than these qualities are usually sold on samples, or as " inferior to f.a.q." In order to ensure themselves from risk of rejected consignments, shippers generally recognised as necessary to ship grain over long distances appreciably better in quality than the standard which they are quoted to represent. In its position between North Otago and North Canterbury, South Canterbury has been standing alone in the island as a grain district without a Chamber of Commerce, and is alone without- a distinct grain standard. One of the duties of the newly formed Chamber of Commerce, as far as the grain business is concerned, will be to sample and grade each season's'yield, so that the exchange of standards may be complete, and Timaru may be placed on the : same footing as other centres. It means j , simply that the Chamber Avould do once for all the work which each firm must do for itself; and the samples it- would send ! out- would be treated with full respect. J One step in connection with the shipment■■ of srain sold as of " f.a,q." or any other quality, would be the same as now: that is that most firms have their shipping*- com- . pared with the standards by the Government grader, who certifies -to their quality at this end of their journey.