THE BUTTER MARKET

Wanganui Chronicle, Volume 73, Issue 424, 15 November 1930, Page 22 (Supplement)

THE BUTTER MARKET

DANISH AND NEW ZEALAND LARGE MARGIN IN PRICES There is a margin of 27s between the top prices for Danish and New Zealand butters quoted in the latest Press Association cablegram from London. This is by no means a record difference in favour of the Danish product. For instance, in March, 192tj, the Danish price soared to 2355, while that for New Zealand butter rose to only 183 s, the margin thus being 52s (states the “New Zealand Herald”). These extreme variations are usually of brief duration. It is, therefore, worthy of note that since July this year Danish butter has commanded a I substantial premium, it having been 120 s or more during the greater part lof the time.

It is customary for the price to come together at the beginning of the English summer. This year was no exception. as in May, Danish butter at 130 s was only Is above the New Zealand price. The margin remained small throughout June, but increased during July and was 20s at the beginning of Align-1, when New Zealand butter rose to 138 s and Danish to 158 s. During that month. Danish prices fell more than New Zealand, and the margin was reduced to 12s, but early in Seplen.’bvT, uh -n the New Zealand prices began to sag. the margin again rose. During September, the margin fluctuated from 22s to 265.

In the absence of any special information regarding factors influencing the market for Danish butter. Auckland merchants ascril w the present discrepancy in prices chiefly to the operation of the law of supply and demana. Stocks of New Zealand butter in London arc unusually heavy, and there are large quantities on the water. The Continental demand has an important bearing on the level of Danish prices. Germany is at times a heavy purchaser of butter from Denmark and it is possible that this is now keeping the price at a higher level than would be the case if the Danes were dependent on the British market alone, although it is a little early in the season for the German demand to have assumed large proportions. “The present margin is no doubt partly due to supply and demand and partly to the fact that the Danes are better organised to sell on a weak market,” one merchant said. “They set their price week by week through one central organisation, whereas about 27 houses are competing in the sale of New Zealand butter, and price-cutting is inevitable. In a strong market, when the buyers are keen to obtain supplies, this does not matter. As conditions are to-day, a lot of the heaviest buying is being done by a very few people, and. with a large number of sellers on the doorstep., it makes a buyers’ market.”