Products Of The South Seas

Prospects of the Copra Market

THERE is no improvement in the copra market; and none need be looked for until the world begins to recover from its present period of intense economic sickness and can resume consumption in something like a normal manner.

The improvement in the general situation will not be long delayed—simply because, if it is, there will be a general economic collapse throughout the world, with results which almost baffle the imagination. The world’s financiers have suddenly awakened to the situ ation and now they are trying frantically to do what ought to have been done a year ago —namely, restore to the world the gold now tied up in a useless mass in America and Prance, and without which the world’s system of international trade and exchange cannot function. It is becoming every day more plain that among numerous contributing fac tors, the main causes of the world’s depres sion are the accumulation of gold in U.S.A. and the demonetisation of silver, which is the basis of Asiatic trade. To-day, with world trade visibly shrinking under their eyes—the result of the inability of the world’s people to exchange and consume—and with sterling (the foundation of the world’s financial sys tem) actually toppling around their ears, the world’s financiers are displaying a frightened, but most commendable, haste; and we may expect to see important steps taken before this year is gone.

In the meantime, three other factors con tribute to the confusion of a situation which is reflected in desperately low prices for copra and numerous other primary products. There can be no movement towards recovery in

Europe until the British general election is past and the issue of tariff or no-tariff is decided. That issue directly affects the pur chasing power of Europe. The second point is contained in a report issued by Paure Blattmann and Co., London, on August 12, to the effect that vegetable oil stocks in America are at a record high figure, showing an increase of 12,000 tons of oil compared with 1930, while the incoming cotton crop is giving an additional 60,000 tons of cotton oil.

This is likely to weaken the demand from America for copra for some time to come. The third factor is, of course, the continued excess of whale oil in the market. Certainly, Ant arctic production has fallen away enor mously, but the whaling fleets and floating factories are still in being, standing idle, simply awaiting consumption of accumulated stocks before resuming their activities. The largest floating whale-oil factory ever built left the Belfast shipyards on July 7 for her initial trials. She can accommodate 300 men and carry 25,000 tons of whale oil. She is going to Norway, to be laid up until July, 1932.

Copra producers need not look for much improvement in the market for some months yet. The only consoling feature about the present situation is that it cannot remain as it is—it must either improve, or smash. We think that a general improvement will become manifest in 1932. The world will want coco nut oil—and a great deal of it —presently. In the meantime, the wise producer will restrict production as far as is reasonable, and try to keep his plantation in good order. It is a period of tightening the belt and hanging on.

The whole world is in the soup together.