Copra.

Prospects Discussed.

SINCE the last issue of The Pacific Is lands Monthly, the price of copra has further declined, but in more recent weeks has shown indications of re covery.

The causes of this disastrous fall in the main product of many South Seas communities have been widely discussed but there is little unanimity of opinion.

It is generally conceded, however, that the chief general factor affecting the situation is the continued enormous pro duction of other vegetable oils and of whale oil.

A special factor in the situation, how ever, is the great overproduction of but ter, which has had much attention in newspapers lately. It is clear that as butter becomes plentiful and cheap the demand for margarine recedes and there is a corresponding fall in the use of co conut oil which is one of the main con stituents of margarine. This is a pass ing phase because, there is little doubt that the glut of butter in Europe will soon reduce world production and bring butter prices back to normal.

The slight recovery in copra prices is a reflection, possibly, of the American financial crash. Many hope that out of this evil will come the first good begin nings of financial reconstruction and economic recovery—which must, of course, be expressed in higher com modity prices. It is a simple axiom that high gold prices mean low commodity prices. There seemed no alternative to high gold prices while America main tained the tremendous financial structure she had erected on the world’s post-war settlements. But the crash, although its immediate effect will be far-reaching and terrible, may quite possibly mean the dawn of a new financial era in which either gold will be released quickly from its frozen and immobile condition — which will permit the international credit system to function again—or something will take the place of gold.

Many shrewd observers expect to see a general recovery in commodity prices before 1933 is out. In that fact lies the copra producer’s main hope. The noise of the crash and the terrific attendant confusion are too recent to permit clear judgments to be formed yet; but it is quite possible that the general economic outlook to-day—despite a whole series of world crises—is much more encourag ing than it was a month ago.