The Copra Market

Puzzle

4-1, .. , , TOURING the month, the copra market has been quiet. Prices rose slightly at London sales immediately prior to Christmas, but returned to early Decern ber levels in the New Year.

A year ago copra was up around £2O per ton sterling, due, it was stated, to “the world-wide economic recovery and an increasing demand for war material.”

Observers were a little premature with “world-wide recovery”—the price of the staple South Seas commodity gradually subsided at the rate of £1 per ton per month until it finally settled down around £l2 per ton.

Pacific Islands planters must be puzzl ed by recent quotations, following a year in which there has been little or no economic set-back, and a feverish gal loping in the armaments stakes, cul minating in a colossal waste of war material in China and Spain. But they are not the only ones puzzled.

Reference to the December report of

Messrs. H, M. F. Faure and Co., of Lon don, whose market bulletins generally are regarded as a pointer to what is hap pening, pins the cause of low commodity prices on to accute pessimism. It adds that “though there has been a good deal of activity in the various markets, consumers are following a hand-to-mouth policy. If this is persisted in, it should follow that any further declines will meet with strong resistance.” Which is all so very encouraging!

The Faure report continues: “In the political field there have been no startling developments to upset cal culations, but, on the other hand, there have been a few factors which may have steadying effects on markets, such as the reduction in the Rubber quota from 90 to 70 per cent., in the Tin quota from 110 to 70 per cent., and the speech by President Roosevelt announcing plans for an enormous building campaign in the U.S.A. Although the building plans in themselves have failed to raise any great enthusiasm, it has become clear that the U.S.A. Government have fully realised the extent and the danger of the recent business recession. On December 10 the House of Representatives passed a bill for compulsory crop control for cotton, wheat, com, and a few other crops. It was stated that this measure is likely to pass the Senate at an early date. It is probable that the glut of oils and oilseeds will also be only tem porary and that in the distant future supplies may again be more in con formity with requirements. A feature of the past month has been the continued decline in freight rates, especially from India and the Far East, and these re ductions have largely contributed to the drop in prices.”

We have seen nothing of these lower freight rates in the Pacific.