WHEAT AND FLOUR.

Timaru Herald, Volume CXXIII, 18 March 1926, Page 4

WHEAT AND FLOUR.

IMPORTATIONS FROM OVERSEAS. THE PRESENT POSITION. . The position in regard to tho disposal of wheat and flour is still unsatisfactory to everyone concerned, except the consumer who, despite .the difficulties of wheat-growers and millers, is in the happy position of continuing to get a cheap joaf. There has been no increase in the price of bread, and there is no present indication of an increase; as a matter of fact the indications point to a lower, rather than to a higher price—that is if millers reduce the price of Hour, as they are thinking of doing in order to meet the competition by flour imported, from Australia. On the other hand the millers say that they cannot possibly give 7s per bushel for ' wheat if they have to sell Hour at less than the present price of £lB per ton. Recognising the position, somo growers are now meeting the market, several tines having been disposed of last week at the'prices offered by millers, namely 6s Bd, 6s 10d, and 7s, f.0.b., sacks extra. Most growers, however, arc holding, in the. meantime, in the hope that something will turn up whereby the. position, so far as they are concerned, will improve. Proof of their confidence, in the market for next season, is.seen in the breaking up of lea land, preparatory for sowing wheat, which is going on. all over the district. It is a long time since such a puzzling state of affairs as now exists was previously in existence. Australian flour is being landed in the North Island at round about £l7 10s per ton, duty and all charges paid, and flour cannot be landed in the North Island, from Call; terbury, for less' than about £l.B 13s per'ton. Although it has been contended in the past that Australian flour makes hotter broad than can be. made from New Zealand flour, this contention is now seriously challenged, and the fact that New Zealand bakers will not use Australian Hour alone, if they can get New Zealand to mix with it, speaks for itself. It is stated that New Zealand wheat is now better grown than it used to be, and that in some respeets it is better than Australian. An allegation recently made is that the water content of Australian flour is much higher than tho .water content of Australian wheat a . fact, if true, which will not be looked upon with any degree of favour by New Zealand buyers of Australian flour, and one which ought to bo taken into consideration in making a comparison between the price of New Zealand (lour and that of flour manufactured in Australia. With Australia now sending flour into this country at the rate of 1000 tons per month, the question arises as to how long this can continue—whether Australia has an unlimited quantity for export. While this question cannot be definitely answered in the absence of up-to-dato statistics, the position which existed last year may he stated. Australia had a surplus of 100,000,000 bushels of wheat last year, and she got rid of it all by tho end of June. This year's surplus is estimated at only about half that of last year, and if this estimate is anything like correct, the indications, are that the end of the exportable surplus from that country ■' is already in sight; and latest reports arc to the effect that growers over there are not now willing, generally speaking, to accept the price's that arc being offered them. According to figures ju Hie Offic’al Year Rook of the Commonwealth of Australia, for 1924. 90,063,909 bushels of wheat and 235,764 tons of flour were shipped-from-Australian for the six months ended June 30, last year. Australia has an extensive overseas market for flour and wheat, as is indicated bv the fact what for the five vea is—l9lß-19 to 1922-23—the export of wheat from Australia to the United Kingdom a.moi%ted to 149,565,600 buslie's. or 45 per cent, of the total export for the period, while the export of flour to the United Kingdom aggregated 478,472 tons or 21 per cent, of tlio total export. The largest purchaser of Australian flour during the last quinquennial period was Egypt, followed by the United Kingdom. Netherlands, East' Indies, South Africa. ,and Malaya. (British). Of this season’s crop Australia has contracted lo supply Japan with a large quantity. In addition to the competition 'from Australia, Now Zealand has also to contend against competition from Canada, whose pollard and bran can now come in here at a price to compete against that manufactured in New Zealand, and this has made it impossible for millers here to raise the price of these products and reduce the price of flour in proportion, as they had proposed to do. Canadian oatmeal is also now coming into this country at about £lB 10s per ton, compared with the New Zealand price of £24 per ton. Canada has had good crops of both wheat and oats this year, ami Canadian pollard is now coming into the North Island. .While the present position of affairs is giving cause for much speculation among growers as to whether they should sell or ho’d. millers are still more perturbed as to how they should act, and are watching matters very closely. A lowering of the. price of -flour may bo forced upon them any day; meantime they are buying wheat sparingly at the prices fixed h.v them at their recent conference in Christchurch 'This is one side of tlio picture. Another may he presented as follows:Tlie wheat-grower desires to get for his wheat what, ho was led to believe lie would get in the early part of the season. namely, 7s, on trucks, countrystations. The miller, on the other hand,, wants to buy' his wheat oil a basis of safety, and 'consequently has fixed his price at a figure that may leave him a margin for a fall —about fid or 7d per bushel'below what growers desire. One day appearances point to tho miller being successful, while the next day the movement appears to be m favour of the grower. To-day the movement appears to favour the grower, as tho latest. report from London (from which centre movements are immediately- reflected in Australian wheat and flour), shows that wheat cargoes have advanced considerably. A more significant reading of the market is iliat from Liverpool which, up to the last toil days, showed July futures as being below those for March and May-, while at the present moment tlio July quotations aro above, those lor M.areh and May. It is difficult at this end to conjecture tho reason, and tho position lias to be accepted as it iliows, namely, that wheat in -England to-day is expected to rule higher in July, instead of lower, as was apparently anticipated up to ten days ago. This is tho position to-day; to-morrow it may he entirely changed, for better or tlio reverse. At the same time it seems reasonable to suppose that whereas Australian flour may have been available for sale at £l2 10s per ton yesterday, its price should have moved up in sympathy with London, unless the quality is siicli that it could not he exported to the United Kingdom. A good deal is said concerning the importation of Australian flour into Now Zealand. Taking the statistician’s figures as to the consumption of flour lnNcw Zealand, per annum, it is found to he in the neighbourhood of 145,000 tons. It will be seen, therefore, that 1001) tons per month coming into this country from Australia is a very small percentage of the actual requirements; and if Now Zealand prices were 30s per ton higher than those at which Australiairflour can he landed in New Zealand, it is confidently asserted that there would still be a certain amount of trade in New Zea'aml Hour—probably fifty to 75 per rent. Another point, mentioned is that whereas in November last. Australian flour could lie purchased at 011 per fun. no alteration was then made in the price of flour in New Zealand. Canterbury mills used

last vear over one-third of their requirements in Australian wheat ulnch post them about 7s 3d per bushel, . in. on wharf. R',_ tlioroior.-. mdle s could afford to pay is 3d last >t«w, the question is asked why they cannot do the same this year.