WHEAT AGREEMENT.

Star (Christchurch), Volume LXIV, Issue 851, 26 August 1933, Page 1

WHEAT AGREEMENT.

Short Meeting Ends in Pact. PRICE LEVEL FOR IMPORTS. British Official Wireless. (Received August 26, 12.30 p.m.) RUGBY, August 25. An agreement on the world price of wheat and on the limitation of supplies was reached to-day by the Wheat Conference in London, at which twenty-nine countries were represented. The Canadian Prime Minister, Mr Bennett, who is chairman of the con-

ference, announced that the exporting countries had accepted thirty-two gold francs per quintal and 63.08 gold cents per bushel as the price level at which importing nations may be asked to readjust their tariffs on wheat. Exporting countries had, Mr Ben- . nett explained, desired a higher price,

but in view of the representations made by other delegations, they were prepared to agree to this price. The conference started on Monday and is therefore one of the shortest international conferences on record. Acreage Reduction Agreed On. The exporting countries agree to limit their total exports of wheat in 1934 to 560,000,000 bushels, and, with the exception of Russia and the Danubian States, will reduce production bv 15 per cent. The agreement will be in force for two years. The importing countries, in a paragraph to be added to the agreement, declare that the measures affecting the area of wheat grown and the degree of production are primarily dependent on the domestic conditions of each country, and any changes in those measures must obtain the sanction of the Legislature. The intention of the agreement is nevertheless that importing countries will not take advantage of the reduction in exports by developing their domestic policies in such a wav as to prejudice the efforts of the exporting countries in the common interest to restore the price to a remunerative level. Parties Co-operate. The French delegate informed the Conference that his Government was prepa r ed to give proof of its desire for an agreement by accepting the price. The German delegate spoke in similar terms. On behalf of Russia, it was stated that the Soviet would sign, but with a reservation as to the limitation of exported wheat. The Danubian States intimated that they were in the same position as Russia. There was a proposal from America that the price level question be left over to be determined by the Wheat Advisory Committee, which is being set up in London, and Italian representatives also urged that the matter be dealt with later, but their proposals were defeated. Britain and other non-exporting and producing countries will sign the agreement. Ten Gold Cents Rise. In regard to the figure of 63.08 gold cents per bushel inserted in the final agreement, the index figure for the week ending August 5 was, on this cai culation, 55 gold cents, and is now between 53 and 54 gold cents. It will be seen, therefore, that the new price is a rise, of approximately ten gold cents per bushel, and will be maintained at that figure for a period of four months before it will be necesary for import ing counties to adjust their tariffs. Wheat prices advanced on the Liv- , erpool futures market when the news of the agreement became known. Prices were 2d to id down at the opening, but rose id to 2d higher than yesterday’s close. AGREEMENT SIGNED. (Received August 26. 2.30 p.m.) LONDON, August 25.% The wheat agreement was signed at 10.30 p.m. after a delay due to complications in the drafting. The delegates concluded the session after midnight. The signatories are: Importers—Germany, Austria. /Belgium, Bulgaria. France, Britain, Greece, Hungary, Ireland, Italy. Poland, Roumania, Spain, Sweden, Czecho Slovakia, Swithzerland, Jugo-Slavia. Exporters—Australia, United States, Canada and Argentina, while Latvia. Turkey, Norway, Denmark and Estonia will probably -sign later. The Big Four’s restrictions are based on their average sowings from 1930 to 1933, after deducting the normal domestic requirements. Considering the sharp divisions prevalent during the week, the wheat agreement now awaiting signature is an achievement of some importance, which may bear out expectations exercising a stabilising effect on the market and also influence the United States against the threatened subsidisation of exports to eastern markets, which might seriously affect Australia. It is understood that Mr S. M. Bruce, who adopted a careful attitude throughout, regards the agreement as the maximum which could reasonably be expected, but does not share the hopefulness with which some of the Continental quarters profess to regard it. The importers certainly have agreed to the figure of 63.6 gold cents a bushel, as the point from which current reductions will be considered after that price prevails for four months, btit among the serious snags is the absence of any provision as to the extent of the tariff cuts. Moreover, the paragraph added to the agreement to-day at the request of the importers,

emphasising certain conditions governed by the domestic situation of individual countries indicates the caution with which they are moving. The agreement may be withdrawn within a period which so far has not been specified. Wheat cargoes opened threepence to sixpence down in view of American advices. The wheat agreement *is regarded as a bullish factor and sellers temporarily withdrew their offers, pending further details. Parcels at the opening were poorly supported and prices were unchanged to threepence down, but in view of the conference result closed nominal. Business is at a standstill. Futures —London, September 21s sd, December 22s sd, February 22s lOid; Liverpool, October 5s 03d, December 5s 2Jd, March 5s 4id, May 5s 6d. 15 PER CENT CUT. (Received August 26, 11.30 a.m.) SYDNEY, August 26. Mr Stewart, Minister of Commerce, commenting on the wheat agreement, says that he hopes it will mean enhanced prices for the growers. Production this season probably will be down 30 per cent and a reduction based on the average of the period under agreement is likely to be more than 15 per cent.