Copra

Why Market Lacks Confidence

THERE has not been much variation in the copra market during the past two months; but the movement, such as it is, has been downward.

Copra, like almost every other commo dity in general use, has reacted to the really extraordinary disturbance of all markets caused in April last by the un official announcement that the price of gold was to be reduced. The announce ment was contradicted almost at once, and gold is still being bought by U.S.A. and Britain at the old price (35 dollars an ounce); but the markets remain uncertain and nervous.

The real cause of the trouble is Russia.

The whole world knows that the Com munist State now Is producing about half the world's gold, and pouring it into Britain and America. The Anglo-Saxon nations were prepared to continue the present system of buying and storing the world's gold production, and borrowing against their gold stores, so that the world-wide recovery in trade might be protected, and go on; but they never foresaw this Russian development.

The effect of the system now, appar ently, is that it is enriching Russia at the expense of the non-gold nations. It may be necessary, therefore, to reduce the price of gold. U.S.A. and the Western European nations are under no obliga tion to enrich Russia. Yet if gold Is re duced, the present world-wide economic recovery will be halted. It is an ugly problem. Many believe that gold will be reduced, and markets consequently lack confidence.

Nevertheless, the world is trading ac tively and eagerly: and one effect—as reported elsewhere—is seen in a sharp increase in freights on copra cargoes.