Baffling Copra

Market

Why Does Price Not Rise?

THE copra market was depressed in mid-June; and, in comment, we said that there seemed to be no good reason for the fall in rates, and that prices should rise soon.

It is now July 19; and prices not only have not recovered —they have fallen fur ther. The position is extraordinary, and baffling.

We have interviewed, to-day, the prin cipal copra merchants in Sydney, and they declare that they are completely at a loss. They do not know of one substan tial reason why prices should have fallen by 40/- within a few weeks. They are inclined to blame the all-powerful Uni lever. Combine for the decline, basing their argument on the important fact that, although copra has fallen so sharply, the coconut oil quotation has been maintained.

Qur information from London is to the same effect—the leading British traders in vegetable oil seeds have not retreated, in any particular, from the view they expressed early in 1935—namely, that the

Index of Volume V. of the Pacific Islands Monthly (August 1934-July 1935, inclusive) is published on page 80 of this issue.

world statistical position (indicating a reduction of world supplies) justified the opinion that the copra price would im prove during the year, and would hold, at least, into 1936.

Even in June, 1935, at the moment when the copra price took its first heavy tumble, Mr. H. M. F. Faure, head of Messrs. Faure, Blattman and Co., was addressing an important conference in Brussels, and reiterating his opinion that prices should maintain their level, and increase, if anything. And Mr. Faure is one of the most conservative market com mentators in London.

It is possible that the market has been affected by the American position. America, last year, put heavy imposts on Philippine Islands copra, and thus diverted Philip pine supplies to the European market.

Then the new law was relaxed, the Philip pines product resumed its flow to America, and the European market recovered. For many months now, the law courts of U.S.A. have been fighting about the legality of the “processing tax,” which apparently affects the copra price: and it was announced in the news cablegrams on July 18 that the U.S.A. Court of Ap peals had declared the tax unconstitu tional. “The question now goes to the Supreme Court, and a decision is expected before Christmas.” Meanwhile, the pro cessing tax continues.

It is difficult to offer any advice to copra growers and dealers. The price is down, and without apparent reason.

There are several good reasons why it should be up, and rising. The situation generally is complicated by the operations of the Unilever Combine, and by economic nationalism.

On all the known factors, the price should rise soon, and smartly.