FORWARD SELLING OF BUTTER

Wanganui Chronicle, Volume 76, Issue 97, 27 April 1933, Page 6

FORWARD SELLING OF BUTTER

r yHE complaint that the forward selling of butter is at the present time depressing the. market, may bo well founded, but precipitate action in regard thereto would be unwise. In the first place the Dairy Control Board cannot interfere with the present contracts, and in the second place, to cut New Zealand butter off from forward sellers would be by no means an unmixed blessing. The wool market at the present time is actually suffering from the absence of speculative buying. Statistically the wool situation is healthy, but banking influence in consumer countries is dictating a hand-to-mouth policy. It is reasonably certain that wool will witness a gradual rise in price for some time to come. If there is any movement in the market in the nature of forward buying then the upward trend in prices will be accentuated and once at. a higher level the range of prices are likely to remain there for some time. It is quite obvious that New Zealand could hardly take a course to encourage forward buying in wool and to discourage it in regard to butter. Forward buying sometimes benefits, and sometimes operates to the detriment of the producer. It is a safe policy, however, which encourages as many buyers as possible, and it would be unwise to discriminate between spot and forward buyers because just now forward buying does not confer a benefit. A policy which is fitted to the short view is no policy at all and would lead to the narrowing of the market, which is the last thing to be sought.