17

H.—l7

While not showing such notable advance as that of the two preceding seasons, there has been a regularity which has met with considerable approval from the trade. Instances have been met, of course, where faults were noticeable, and in a few cases a tendency to fishiness has been apparent. These faults have been duly noted and brought under the notice of the Dairy Department in Wellington. I regret having had to report that the closeness of price between Danish and New Zealand butters remarked last year has this season not been maintained. With the exception of a week or two at the opening, when New Zealand butter was quoted as differing from Danish at a margin similar to that which it held at the close of the preceding season—namely, about 2s. per hundredweight—prices gradually widened, until, taking the average difference in value up to the end of March, there has been a margin of probably 10s. in favour of Danish. This is disappointing, and to ascertain the cause is naturally of considerable interest. While recently visiting the chief centres of distribution I had many conversations on the subject with leading merchants, and I was surprised to find the great differences of opinion expressed as to the reason. I have done my best to arrive at a satisfactory conclusion, but find it somewhat difficult to determine the point. During the past six months—that is, during the period New Zealand butter has been on the market —there has been a considerable increase in the quantity of butter imported into this country from all sources over that landed during the same period last year. It had been anticipated by those interested in New Zealand trade that owing to the drought in Australia supplies from there would be very small, and that consequently the demand for New Zealand butter would be improved. While there was an enormous shortage from Australia as expected—a deficiency amounting to 124,483 cwt. —there was, however, an increase in the total imports during the six months of 92,040 cwt. Furthermore, the total quantity of butter imported into the United Kingdom during 1902 amounted to 3,974,177cwt., as against 3,702,890cwt. during the previous twelve months—an increase greater than the whole annual export of New Zealand. As was well known and reported to the colony, a large quantity of this butter had been placed in cold-store. No one knew exactly how much was held, and the market was therefore unusually speculative. Large stocks of this butter were in the hands of those who in the ordinary course of business would have been purchasers of New Zealand butter, and these had to be worked off. Consequently the demand until they were absorbed was dull. Again, Danish butter has shown a considerably increased supply during the present New Zealand season, and has been, on the whole, sold at lower prices than usually made for it at that time of the year. This consequently attracted_ buyers to it. Another reason put forward in some quarters for the depreciation in the price of New Zealand butter this year is the " bearing " tactics of some large dealers, who, not holding stocks themselves, offered to clients throughout the country contracts for the supply of New Zealand butter during the season at lower prices than warranted by values paid to producers in the colony. How far this is true I have, of course, no means of ascertaining. That there is some truth, however, in these statements I am inclined to believe, judging from the prices at which I have been informed by merchants throughout the country they have had the butter offered to them. These speculative dealers naturally expected to be able, while probably losing money at the beginning of the season when shipments were light, to recoup themselves as the season advanced and stocks became heavier, by buying at low prices when the market had been forced down by their tactics. It is felt by many that butters coming Home this season on consignment may possibly feel the effect of these operations more than outputs which were sold in the colony and probably had been placed here at the beginning of the season under contract. I am inclined, however, to think that the regular and steady manner in which Denmark has sent its butter into the markets of this country has had as much to do with the gain in price this season over New Zealand as any other factor. The colony has been disposing of its butter partly on consignment and partly to new purchasers. Brands have consequently been diverted from old channels. Denmark sends regularly the same brands of butter to the same agents in the same centres for the supply of the same customers year after year, and so caters for the markets she has built up. This is not attempted in New Zealand, where the constant changes from consignment to sale, sale to consignment, from one buyer or agent to another, and from one market to the other, are not at all conducive to obtaining the best results. Last year I drew attention to the increasing competition which was to be expected from Siberia, and I am pleased to observe that this subject has received full attention from the colony's producers, who recognise its importance. This year I have been greatly struck, when visiting the distributing centres throughout the country, with the steady manner in which butter from Argentina is gaining ground. The quantity as yet received from that country is not of very great magnitude, but that the export is rapidly increasing each year will be clearly seen from the following extract from the Board of Trade returns: — 1899 ... ... ••• ••• 226 tons. 1900 .'.'. '.'.'. 1.170 „ 1901 1.512 „ 1902 ... ... ... ••• ••• ■■• ■■• 4,125 „ The quality of the butter is really good ; it is very similar to that of New Zealand. This is shown by the price being usually within 2s. per hundredweight of that of butter from the colony. One notable feature of Argentine butter, and one which secures for it a readier introduction to the markets of the Midlands and the North of England, is that its colour is much paler than that of our butter. The question of colour is, as I have frequently reported, one of very considerable importance in those markets. The rich, deep colour of New Zealand butter is constantly put forward as one of the chief reasons why it does not obtain the footing desired in the districts mentioned. Much of the Danish butter that goes into the large mining and manufacturing dis3—H. 17.