TRADE WITH EAST

Manawatu Standard, Volume XLIX, Issue 252, 23 September 1929, Page 10

TRADE WITH EAST

INTERESTING REPORT. DOMINION’S DISABILITY. lion. John G. Cobbe, Minister of Industries and Commerce, recently received from the department a report regarding Now Zealand’s trade with tho East. In view of the interest taken in the extension of Now Zealand’s trade in overseas markets, and particularly in catering lor the trade with Java, Malaya, China, Japan and the Philippine Islands, the Minister has authorised the issue of the report in the form of a bulletin. In view of tho valuable and established trade of the Commonwealth of Australia with the countries referred to, attention has been given in tho report to tho trading position of that country, and emphasis has also been placed on the main disability from which New Zealand suffers in catering for theso markets, that is the absence of regular shipping facilities. Tho report reads as follows: “As has been pointed out on several occasions by this department continued expansion of production.in New Zealand must go hand in hand with the extension of tho markets for tho commodities which this country has for exchange, and tho department has, therefore, persisted in its efforts to interest exporters and manufacturers in the possibilities of trade with the East, a market which has as yet been comparatively untouched, and which offers great opportunities for enterprising traders. Various causes have contributed to the apathy which has been displayed in regard to this matter. The absence of satisfactory financial arrangements and organisations, and the lack of regular shipping and cold storage facilities are some of the factors that have been a bar to the exploitation of Eastern markets Some of theso difficulties, however, are gradually being removed, for the necessary business organisations, with officers possessing a knowledge of conditions and tastes in the East, arc already established. Gold storage fac ilitics in the East are being provided but are still inadequate for business of any great dimensions in refrigerated commodities. From the figures available it would appear that exporters of butter have made more cr icss satisfactory arrangements with the cool storage companies, but meat exporters, with, loss regular shipments, are still apparently under a disadvanage as compared with Australian competitors. •INADEQUATE SHIPPING I AGILITIES, “The lack of adequate shipping facilities appears to present tho greatest bar to tho development of trade with the East, and makes successful competition with Ausrra lia in those markets difficult in all lines and impossible in many. The rates of freight from New Zealand ports arc high, considerably higher than from Australia to the East, due to several causes, amongst which are tho small volume of exports from New Zealand, combination between tho shipping .companies operating between Australia and Java, and the successful elimination of American competition by the Japanese lines trading to Australia. Other shipping difficulties experienced arc the lack of refrigerated space for the transport of butter and frozen meat, etc.; delay at the port of transhipment for the same reason; the detrimental effect of transhipment on such commodities both on account of additional handling and'on account of delay; and, finally, relatively high transhipment charges. Almost all these shipping problems would be solved if a regular direct shipping service could be established. At least, £2 per ton extra is cliargeablo on New Zealand’s exports because of tho disabilities in regard to lack of direct shipping from main Dominion ports. ‘•'Our exports to the East have expanded' from £322,245 in 1926 to £523,152 in 1927, and £1,140,363 in 1928. Our total exports in those years were £45,275,575, £43,496,354 and £56,188,481, so that our exports to the East represented respectively .71 per cent., LOB per cent, and 2.03 per cent. “Our imports from tho East in the same three years were £3,487,190 in 1926, £3,440,535 in 1927 and £3,607,913 in 1928. Our total ' imports were £49,889,563 in 1926, £44,782,946 in 1927, and £44,886,266 in 1928, so that our imports from the East represented 6.99 per cent.,. 7.68 per cent, and 8.04 per cent, respectively.- It will be seen, : therefore, that there is a balance of trado each year in favour of the East, an adverse balance as far as Now Zealand is concerned which has to bo adjusted by cash payments. If New Zealand is to roach the happy position of a trado equilibrium with the East, then -the difficulties —mainly shipping—Which are at present a bar to the development of our export trade, must be removed. NECESSITY FOR DEVELOPMENT. Some idea of tho necessity for tho development of that trddo and of tho extent to which it might be developed, may be obtained from a comparison of tho trade of Australia to the East. It is appreciated that- Australia exports thither considerable quantities of wheat, flour and other products with which New Zealand cannot hopo to compete, but there arc other products, the exports of which are common- both to Australia and New Zealand. Australia’s exports to the East in 1925-26 totalled £21,336,298; in 1926-27, £19,939,870; and in 1927-28, £21,150,096. Her total exports to all countries in those years wore £148,771,934, £145,140,367 and £143,213,070 respectively. The exports to the East, therefore, represented 14.34 per cent, of total exports in 1925-26, 13.74 per cent, in . 1926-27, and 14.77 per cent, in 1927-28. The imports of Australia from tho East, in the same three years were £21,993,142, £24,229,099 and £20,916,363 respectively. Her imports from all countries were £151,638,178, £164,716,594. and £147,944,970 respectively,, so that imports from the East represented 14.50 per cent, in 1925-26, 14.71 per cont.i in 1926-27, and 14.14 per cent, in 1927-28. Obviously Australia is in a position vastly superior to New Zealand as far as the Eastern trade is concerned. “Tho principal countries concerned in this trade both as regards New Zealand and Australia aro Ceylon, Hong Kong, India, British Malaya, China, Japan, Netherlands, East Indies, and the Philippine Islands. MAIN COMMODITIES. “Tho main commodities that New Zealand exports to the East are wool, butter, tallow, casein, milk and cream (preserved, condensed, dried, etc.), sheepskins, gold and silver. Australia also exports considerable quantities of all these commodities, and in addition such commodities as wheat and flour, biscuits, confectionery, jams and jellies, meats, leather, timber, coal, etc. Tho principal .commodities that are common to both countries are, therefore, the products of tho pastoral industries —those which were first enumerated above, as wool, butter, tallow, skins, milk and cream, etc.—and it is theso products that provide opportunities for the development of existing markets in tho East and tho opennig up of new ones. ’ “There is no doubt that Australian ex'porters are well established in tho East, and well organised efforts would havo to bo made by New Zealand exporters to capture a fair share of the trade. It -is certain that a new shipping service would not bo a payable proposition tor a considerable time until the New Zealand products became established, but onco they were it is confidently felt that a subsidy would no longer be necessary.

WOOL FOR JAPAN. “Our exports to tho East, represented in 1928 2.08 per cent, of our total exports as compared with .71 per cent, in 1926 and 1.08 per cent, in 1927. The increase last year is accounted for by greater exports of wool to Japan. This item increased from £150,305 in 1927 to £588,226 in 1928, and as a result our exports last year to Japan represented 1.17 per cent, of our total trade. More than half of our 'trade with’the East last year was, therefore, directly concerned with Japan. “It is gratifying indeed to note that year by year increasing quantities of' wool are being purchased by that country, but when one lookß at tho figures of tho exports of wool from Australia to Japan the position disclosed does not give grounds for quite so much gratification. In the year 1927-28 Australia exportod to Japan wool to tho value of £10,316,846, nearly eighteen times the value of New Zealand’s exports to that country in 1928. It is obvious, therefore, that there are good prospects of further development of our exports of this commodity to Japan. “With the commercial treaty which was concluded last year between New Zealand and Japan, there is no bar except the absence of a direct shipping lino’ to prevent the development of the trade between the two countries. New Zealand butter

has boon reaching Japan now for some years past, and as a result ol the arrangement made last year it is no longer handicapped so far as duty is concerned in competition with Canadian and other butters imported into Japan. The opening up of a direct shipping service would be of advantage to both countries, and would greatly encourago commercial intercourse between them. AVENUES FOR EXPANSION.

“In general it may bo stated that there aro opportunities for increased trade with tho majority of the countries of the East in almost all tho products of the pastoral industries. A groat demand for those products arising from a widening or. an extension of the markets for them, or front the opening up of new markets would give to our producers better prices, and since tbo prosperity of New Zealand depends mainly on tho prices received for her primary products, would ultimately benefit the whole community. “It is a fact that the Union Steam Ship Company provided the nucleus of a servico some five years ago. This service was available to load cargo from the four main ports of Now Zealand for tho principal Javan ports, viz., Sourabaya, Samarang and Batavia, and •’for Singapore in January, May and September, at the same rates of freight as obtained from the principal Australian ports. No subsidy was asked for. Tho terminal of this service was Calcutta. SHIPPING DISAPPOINTING. “The support from exporters was disappointing. This non-success was unodubtcdly duo to the fact that tho markets were not exploited either prior to tho service being put on or during its currency, to the long intervals between sailings, and to the ''further fact that tho immediate and main market for our products exists in Japan. If it can., be presumed that the Prime Minister has in view the extension of the service to Hong 'Kong, Shanghai, Yokohama or Kobe, in addition to the Javan and Malay ports, then there aro undoubtedly great possibilities for trado expansion. “In tho department’s opinion tho efforts of our business men to cultivate and foster trade should be supplemented by assistance from the State, and as a preliminary step an official investigation should be made with a. view to obtaining definite information as regards (1) the present facilities offered at the ports indicated for cold storage; (2) the typo of packing required for each market, and the weights thereof (especially of tinned butter, prepared cheese, tinned foods, honey, etc.).; (3) tho market prices received and ruling for products which this Dominion can supply; (4) the prospects of the trado in the near future for wool, hides and skins, butter and meat, in China and Japan; (5) the prospects of marketing at. all. ports other .New Zealand produofs and manufactures not at present exploited. AGENTS NEEDED. “In addition recommendations for appointments of accredited agents to act on behalf of New Zealand exporters would require to be made, and finally, satisfactory arrangements made for a regular direct shipping service w:ith steamers calling at main Now Zealand ports and following the extended itinerary outlined above. In tho initial stages a two-monthly service with accommodation for passengers would require to be established, or perhaps better still, a monthly service in the productive season —November to April—and a two-monthly servico during the remainder of the year. - ’