H.—44.

Under the provisions of the New Zealand - Canadian Trade Treaty shelled eggs are admitted into Canada free of duty during December, January, and February in any one year, but, so far the United Kingdom market has been the more attractive for the export quantity available. Through the Irade Commissioner in Toronto, however, the Department is continuing to watch the position closely on behalf of the industry, and it is hoped that the coming season will see at least some small shipments going forward to Canada to take advantage of the concession granted us under the Trade Treaty. PHORMIUM TENAX. Owing to the severe depression that has continued in all sections of the fibre trade, many men are engaged in studying ways and means by which our national asset of Phormiun tenax may be utilized other than in the production of fibre suitable for use in the manufacture of cordage and twine. Engineers' Waste. —Several experimenters have succeeded in producing a commodity from tow and stripper slips that is to a small extent taking the place of cotton waste for cleaning machinery. The product as yet leaves much to be desired, but has been found suitable for use m some kinds of heavy machinery, and may in time take the place of the lower qualities of imported cotton waste. One experimenter has developed a process for producing engineers' waste direct from the green leaf, but it also requires considerable advancement in quality before it would be suitable for use on fine machinery. Kapok Substitute and Flock Substitute,—Other experimenters have been working along the lines of producing a substitute for kapok and flock from tow, and quite good results have been obtained. A considerable quantity of the kapok substitute has been produced and sold to mattress-makers. It is stated that the mixture of this commodity 50-50 with kapok provides a mattress filling of very good quality. inevita ] 3 i e t h at a n t h ese promising activities should be badly handicapped by want of capital and business experience. None of these new industrial outlets are yet on their feet, mainly for want of the necessary capital for development. New Zealand Woolpack and Textiles, Ltd. —The above company opened its factory for the production of woolpacks from Phormium tenax at Foxton on 9th March, 1934. This is said to represent an expenditure of £40,000, and that employment will be given to about eighty hands at the start of operations. The company claims that the new woolpack will prove stronger, lighter, cleaner, and cheaper than the jute pack, and that it will be free from loose fibres —the latter being one of the drawbacks of the jute pack. . It is hoped that this new industry will be entirely successful, and be followed by similar factories in different parts of the Dominion. . The Flaxqrowers' Pulp and Cellulose Products of New Zealand, Ltd.—This concern reorganized its capital during the year, and changed its name to New Zealand Pulping Mills, Ltd. No information is to hand in regard to any progress that may have been made towards producing cellulose pulp to comply with the requirements of the trade in the United Kingdom. Nelson Cellulose Company. —This concern was promoted towards the end of the year, and is said to have obtained an adequate flax property on the West Coast. Sufficient time has not elapsed to allow of any practical progress being made, and at the end of the year the erection of factory buildings, &c., had not been put in. hand. New Zealand Hemp and Jute Mills, Mataura.—At the end of the year a proposal was mooted m Dunedin to establish a mill at Mataura for the manufacture of woolpacks both from Phormiun tenax and jute, but further details have not as yet been ascertainable. TOBACCO INDUSTRY. Steady progress is being made in the growing of tobacco leaf in the Dominion, which is all utilized in local manufacture. The following figures show the progress made Number of Yield. Year. Acres. lb. 1930-31 .. •• •• •• •• 932 722,329 1931-32 •• •• •• •• •• 1j726 1,318,624 1932-33 .. .. •• •• ..2,126 1,784,676 The bulk of the leaf is produced in the Nelson District, but Auckland-grown leaf is steadily improving in quality, and is being used to a greater extent by the two tobacco manufacturing concerns located in Auckland. The two old-established tobacco manufacturing companies in the Dominion are understood to still draw the whole of their requirements of New Zealand leaf from the Nelson District, where high average quality leaf is available in large quantities. The plantation companies in the Auckland District are as yet unable to obtain an export market for their leaf, so that production must of necessity be limited to the quantity that can be absorbed by local manufacturers. Both the tobacco manufacturing concerns in Auckland have experienced improved trading conditions during the year. The larger concern has been able to settle some of its internal difficulties by reorganization, and its outlook for the future seems much brighter. These companies are purchasing large quantities of Dominion-grown leaf, and are also using an increasing percentage of leaf grown in the Auckland Province. The smaller concern has made rapid progress the year, and has experienced a good demand for its various brands of tobacco. The financial position of this company has been so stabilized that the directors have recommended the payment of a dividend of 15 per cent, for the year ending 31st March, 1934.

3 —H. 44.

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