Copra Under Another Cloud

WE make no excuse for returning to a discussion of the future of the copra industry. The position is most difficult and obscure, even in a world of complex economic problems.

Writing in March, we named four factors as responsible for the desperately low price of copra—namely, general depression; the use of other vegetable oil seeds, made possible by scientific dis coveries and processes; over-production; and the operations of the Unilever com bine. The outlook then was gloomy; but, as one shrewd and experienced Sydney merchant expressed it, “every bit of copra that is being offered is being purchased and consumed, even although the price is low’’—and in that fact lay good reason for belief that the commodity would join other primary products in the slow, steady recovery in price. That conclusion was supported by the special despatch received from London by Sir Hubert Murray, of Papua, at the end of February, when he pointedly asked

High Authority whether coconut-planting might be regarded as a “dying industry.’’

Then, in an apparently clearing sky, there appeared another black cloud. The United States, than which no nation pur chases more copra, has made a drastic plan to discourage the use of coconut oil, so that its domestic production of veget able and animal oils may be assisted.

The development is described in an article elsewhere in this issue. At the moment of this writing, it looks as if a great proportion of the Philippine Islands copra will be thrown upon the European mar ket. World production of copra varies from 1,000,000 to 1,230,000 tons per annum. The Philippines’ share, varying from 25 to 40 per cent., hitherto has gone to U.S.A.

News of the American development had reached other copra-producing coun tries, and was causing corresponding alarm, at the end of February. But the tidings did not come to light-hearted Australia until about the end of April;

and, even to-day, no one seems to be upset about it. “Only another brain wave of the American brain-trust—it will pass,” is the official attitude in Australia.

Our information is that, while the original plan of a 5 cents per lb. excise tax on coconut oil has been abandoned, the 3 cents rate will be passed by the American Senate. And that will give the Ameri can copra trade its coup-de-grace.

Recent proceedings of the Fiji Legis lative Council are significant. An official committee was set up last October to devise means of giving relief to Fiji copra producers; and a carefully planned series of recommendations was submitted to the Governor in March. But before the Governor and his Council could settle down to serious consideration of the Com mittee’s report, the Governor received details of the American development.

His Excellency asked, in view of this, what was the use of straining the finances of the Colony in giving temporary relief to planters, when it now appeared likely that the copra industry would be most seriously and perhaps permanently dis rupted. In the circumstances, said the Governor, there was only one thing to

do—namely, place the whole position before the British Government, and ap peal for protection for the industry. His Council, which includes members of the special committee referred to, accepted his arguments and conclusions. If the position was going to develop as indicated, little could be gained by the relief mea sures they had planned.

Since then, we understand, representa tions of the most urgent character have been made to the Colonial Office by Sir Murchison Fletcher. It is a grave prob lem, so far as he is concerned. As High Commissioner for the Western Pacific, he has in his charge not only Fiji, but also the copra-producing territories of Solo mons, Tonga and the Gilbert and Ellice group.

We may expect an early move by Britain—possibly in collaboration with Holland. The world’s copra comes chiefly from Philippines (American), East Indies (Dutch), various French territories, and a whole host of small countries under the immediate control of the British Colonial Office, such as Cey lon, Malaya, West Indies, Pacific Islands and East Africa. America proposes to abandon the Philippines copra producers —possibly because that territory is on the verge of enjoying complete independ ence. France has adopted a new law, under which only French-produced copra is to be admitted tax-free to the important markets in France. Germany, hitherto a mighty consumer of copra, has imposed almost prohibitory tariffs against coconut oil, in an effort to encourage domestic industries. The problem before Britain and Holland needs no elaboration.

Britain imports enormous quantities of foreign-grown oil-seeds—soya beans from Manchuria, for instance, ground-nuts from various parts of Asia, cotton seed from India, and castor seed and linseed from many places. Here are the imports, in tons, of some oil-seeds by the various nations in 1933:

One recommendation that is being urged upon Britain is that she should again place a heavy tariff on soya beans.

which are produced mostly in Manchuria, and thus encourage the use of Empire grown copra. Statistics show that, since the end of the war, the importation of copra by Britain has increased very slightly, while the consumption of soya beans has grown substantially.

A glance at the copra column in the tabulated figures above indicates that Britain does not hold the key to the copra market—far too large a proportion of the world’s copra is disposed of on the Continent of Europe. For that, perhaps, we must thank Unilever; the post-war operations of that international combine did much towards limiting the copra milling industry in Britain, transferring operations to other countries and thus reducing Britain’s ability to consume copra. That did not matter so much, before the outbreak of this lunacy which we now call “economic nationalism.”

But it matters a great deal to-day, when each nation is using its command over certain industries and raw materials to bargain with other countries, and the fate of the British Empire’s copra industry is in the balance.

Frankly, after examining the statistics available (up to the end of 1933), we are inclined to wonder what Britain can do to help her dominions and colonies in this copra crisis. The British coconut planters produce about 236,000 tons of copra per annum (Straits Settlements 152,000, Ceylon 64,000, South Seas 40,000), and Great Britain herself con sumes only about 100,000 tons, from all sources. She might assist a little by taxing soya beans, as suggested; but she cannot interfere with the ground-nut and cotton seed industries, which are based largely on Indian production. Of course, she might follow the example of France, and place a sharp duty on all copra produced in non-British countries. That, inci dentally, would not be of much use to the copra produced in Papua and New Guinea. The products of Australian territories are not likely to receive specially favoured treatment in Britain, so long as Australia maintains her present tariff against British goods.

It is likely that Fiji will ask all other copra-producing countries to join with her in a consideration of the copra crisis; and that will bring in Australia, as the authority responsible for Papua and New Guinea. So far, the Commonwealth Government, although it has a huge sum at stake in coconut plantations in its ter ritories, has displayed indifference towards

the world aspect of the copra problem. It was strongly urged by the New Guinea Planters’ Association to consider certain aspects of the industry; but, so far as we know, it has taken no action.

Ground Soya Cotton Copra Nuts Beans Seed Britain .. .. 103,424 128,049 157,489 457,875

U.S.A 295,031

France .. .. 196,451 782,978 15,142 Holland .. .. 42,771 108,873 39,244 Germany.. .. 119,273 310,681 1,152,460 Italy .. .. 39,042 81,433 6,312 Belgium .. .. 6,500 33,573 Denmark .. 72,204 33,279 234,683 3,791 Sweden .. .. 18,618 1,259 57,883 Japan ... 12.909 421,665 42,117