Copra Outlook

Will Prices Stay on Higher Plane?

THE following interesting summary of the copra market in 1934 and pros pects in 1935 was issued by Messrs.

Faure Blattman and Co., London, on January 14: The imports into and exports from the United Kingdom of oils, fats and oil seeds, the latter converted into their oil equivalent, for 1934, as compared with the previous two years, show that the net impor: s, arrived at by deducting the ex ports from the imports, including butter, lard, and margarine, amounted to 1,263,888 tons during 1934, against 1,202,821 tons during 1933, and 1,139,439 tons dur ing 1932. The total net imports for De cember, 1934, amounted to 96,098 tons, against 93,316 tons for December, 1933.

In all our recent monthly reviews, we have had to report a steady advance in markets, and a prospect of a further lift ing of values. In our last review, we foresaw a temporary halt in the Ameri can buying, and although for a few days American buyers did hold off, the de mand was soon renewed with increased vigour, with the result that we have seen a sharp advance all along the line, apply ing to practically all oils and oilseeds.

Even copra, which up to quite recently continued to be sadly neglected, suddenly seems to have come to life and has seen a rise of over £2 per ton since our last report.

There is no doubt that consumers in Europe are gradually waking up to the fact that this American buying is more than just a temporary wave, but that there is a real shortage to be made up, and tljat the American consumers will continue to be in the market until they have satisfied their requirements.

The latest reports on hog production in the U.S.A. are generally construed as extremely bullish, and the same applies to the prospects of tallow production, pros pective supplies of both of which must be wery seriously affected by last year’s drought.

If it had not been for the exchange diffi culties in Central Europe, which have caused Germany and other Central Euro peans countries to remain practically out of the market for months, there is no doubt that we would have seen a much sharper advance, and the rise might even have been in the nature of a panic.

One of the reasons why the Germans have been able to refrain from buying is no doubt to be found in their large pur chases of whale oil which would be equivalent to a cover for the imports of fat for two or three months, their only other purchases being effected by corti pensation business, that is to say, bar tered against German goods. It is gene rally recognised that Germany is getting to the point where she is again in need of oils and fats, and one hears already of large purchases of butter, etc., whioh have been made in the Argentine. We may therefore assume that before long the imports of oils and fats will again be given precedence in the allotment of foreign exchange, and that Germany will once again enter the market, although the tendency will be only to buy what is absolutely needed.

The latest figures on the whale oil catch show a production at the end of December of 666,490 barrels, against 1,207,450 barrels in 1933/34, and 1,132,750 barrels in 1932/33. This, however, does not mean any falling-off in the supply of

whales, but is due entirely to the agree ment to commence fishing operations only on the Ist December.

The American cotton oil consumption for December was 250,347 barrels. This figure in itself cannot really be construed as either bullish or bearish, as it is just what the trade expected. It is, kowever, well up to the average of last year, and in view of the heavy consumption during the first months of the present season, leaves the deficiency foreseen in our last month’s report unchanged.

There is no doubt that the feeling is gradually gaining ground that the low level of prices of oils and fats to which we have grown accustomed in recent years must be looked upon as a thing of the past, and that prices for some time to come will stay on a higher plane.

Mr. A. H. Marlow, of Fiji, has been elected a member of the Suva Municipal Council to replace Mr. W. G. Halstead, who recently retired.