Agreement Announced On Formula For Supply Of Dairy Produce To U.K.

Wanganui Chronicle, 11 September 1950, Page 5

Agreement Announced On Formula For Supply Of Dairy Produce To U.K.

Maximum Export To Other Markets Of 14,000 Tons Fixed

WELLINGTON, Last Night (P.A.) —Mr. W. Marshall, chairman of the Dairy Products Marketing Commission, stated today I hat he had received a reply dated September 8, from Mr. Maurice Webb, Minister of Food (who has been absent from London on holiday) to the cable in which th? Commission proposed a formula for supply of butter and cheese. Mr. Webb said. ‘‘l am prepared to accept a shipment as you propose on a pro forma invoice at last year’s prices with the reservation of the right to raise the matter of price during this season at 92j per cent, in the butterfat equivalent of your exportable surplus, and with a maximum export of cheese to markets outside the United Kingdom and programmed countries of 14,000 tons.

“I regret, however, that the Commission decided to reject the' agreed new figure of 6 per cent.. in buttei'fat equivalent of your j •xportable surplus to markets I outside the United Kingdom and j programmed countries which was: accepted in our exchange of let-' ;ers of July and must Reserve the •ight to reopen this question during the 1950-51 season.” The following reply is being sent to Mr. Webb: “The Commission feels that it must say that the only reason for reducing the percentage of exportable surplus which we ship to you is the necessity to take advantage of the higher prices obtainable in other markets to help offset loss we expect to incur this season on shipments to the United Kingdom if we have to supply you at last season’s prices. We agree to a modification of the formula for the shipment contained in our cable of August 25 by reservation to you during the season of the right to re-open the question of the percentage of our exportable surplus that we must send to you, and are pleased that there is now an agreement on the formula for an uninterrupted supply of the maximum quantities of butter and cheese that New Zealand this season can ship tc the United Kingdom."

Mr. Marshall said that the reluct, ance of the Ministry to agree to a reduction of the percentage which New Zealand would send them indicated their desire to have the maximum quantities of butter and cheese which we could send at prices they were pre. pared to pay. He drew attention to the fact that, the removal of rationing in New Zealand would reduce its exportable surplus this season and that it was in New Zealand’s interest to do its utmost to hold its place in the United Kingdom market by sending them the maximum quantities and, if possible, to offset the effect of ration-

ing and the increased quantities to b« sold in other markets. VALUABLE MARKET. The United Kingdom market was a valuable one and there would be com. petition to supply it. Canadian farmers recognised this and, although they were supplying cheese at a loss of 3s cents a pound, they were insisting that their Government hold their place In the United Kingdom market. The Canadian Government was, therefore, requisitioning supplies to get the quantities required, leaving the domes, tic market rather short in consequence. "Our utmost endeavour to hold our place in the United Kingdom market would best serve New Zealand long-term interests he said.” Mr. Marshall pointed out that last season's butter price of 252 s 6d f.o.b. was more than double the price obtained in 1938-39 and was a highlevel price. The maximum increase the Commission asked for this year was 18s lid a cwt. A compromise would have been accepted ot it could have been obtained. “If this figure, which is the maximum asked for, is kept in mind in relation to the 252 s 6d, then the difference between the Ministry and Commission will be seen in true perspective and exaggeration avoided,” he said. Mr. Marshall concluded by saying that if conditions changed during the season to a degree warranting a further approach, the Commission would request the Ministry to reconsider the price. If not, the sale would be made at last year's prices. In any case, the Commission would do its best to offset any loss on sales to the United Kingdom by profits on sales to other'markets. He thought that the agreement on a formula for overcoming the deadlock was an Indication of the fundamentally good relationship between the parties to the contract. This, the Commission would do every everything possible to preserve.