Plan For Great Copra Pool

What is Being Done in East Indies

ri\HE following, kindly supplied by ± Messrs. Burns, Philp and Co., is a translation of an article in “De Locomotief”, Netherlands East Indies, of September 9. The Netherlands Indies Government is to establish a copra pool, and important stocks are to be held in the Netherlands Indies for the use of Holland after the war. Details are as follow: — The Government has submitted to the People’s Council an important supple mentary budget from the Department of Economic Affairs, wherein an item is in cluded for the institution of a Copra fonds. The loss on this fonds for 1940 is estimated at one million guilders, whicn sum has been asked for. The cost ot establishing the Coprafonds is estimated at ten million guilders.

The intention is to regulate the buy ing and storage of copra by a body to be called “Coprafonds”, which, under a Government guarantee, will be supplied with the necessary finance. The fact that only a very small portion of copra can be exported will have to be taken into consideration, so that the local stocks will mount rapidly. It is supposed that, at the end of the war, Europe will immediately need fats, and for the supply of which ready stocks will be important. This is of special importance for the Netherlands; with such stocks Netherlands Indies will be able to come to the aid of the Mother Country, for stock feed as well as for fats.

The uncertainty regarding the period of the present conditions, and of the world situation is such that it is impos sible to know what is a payable price, or what the financial consequences might be. More cannot be paid than is suffi cient to keep copra production going m its most simple form.

Recognition must be taken of the fact that the return, in different districts, is influenced by the different freight rates from the different districts; also the fact that there is a variation in the produc tion costs in different districts,

Shortage Of Store Space

In view of the uncertainty, if and when it will be possible to export the copra, the intention is not to transport the copra from the production centres, ex cept to a number of central storage depots. Thereby the buying apparatus will be as close as possible to the pro ducers. It is, however, necessary to keep the number of storage depots as low as possible.

At the moment an estimate of storage space available is not more than 100,000 tons. Therefore in the first year, stores to take about 300,000 tons will have to be erected. The cost of the building of satisfactory wooden stores is estimated at

about f. 5 per ton space.

The above shows that only a very rough idea of the costs in connection with the buying of this copra, can be estimated at present.

The export of copra from the Outer Possessions to Java can, under present conditions, be estimated as roughly 30,000 tons per year. This does not in clude the copra shipped from the Outer Possessions to Java, and which is pressed for coconut oil, for export abroad.

It is intended to prohibit the shipment of copra from the Outer Possessions to Java—and, if such should appear neces sary, also the import of copra from abroad—and permission to do* so only given to Coprafonds. Thereby shall the fonds be placed in a position to bring the

present abnormally low Java price to the normal level of, say, f. 6. per 100 kilo grams.

That will mean, for the numerous copra producers in Java, an important advantage, while the consumers of coco nut oil will only have to pay slightly more for this article.

The Coprafonds shall, in order to make the export of coconut oil possible, sell necessary quantities of copra to oil mills at sufficiently lower prices to make their product competitive.

Finance

The profit from the copra sold by Coprafonds for consumption in Java, may be calculated as follows:

Cost of purchasing 30,000 tons copra in the Outer Pos sessions =31,500 x f. 30 per ton C.I.F. Java harbours in cluding bags . . F. 945,000 Sale of 30,000 tons at f. 60 .. 1,800,000 Profit for Coprafonds 855,000 In view of the fact that there is no possibility of making any estimate of the likelihood of selling the copra purchased by Coprafonds, in the remaining free markets of the world, the amount can only be placed in abeyance. However, in any case, it can be taken for granted that the result will produce more than F. 295,000. The total expenses of Copra fonds during the first year are estimated at F. 11,150,000, less profits (855,000-f -f.295,000).295,000) F. 10,000,000.

The period, during which copra may be stored, can be taken as around 2 h years.

So long as there is no prospect of sell ing the stored popra, as is the case at

present, it is considered advisable from a budgetary point of view, to transfer the storage charges to the Government esti mated budget during the period con cerned —40 per cent, for the first anti second years, and 20 per cent, for the third year.

Copra In The World Market

In considering of the possibilities of placing in other markets that portion of Netherlands Indies copra that in normal times was exported to countries now un reachable, two unfavourable factors must be considered—namely, that only a small portion of world fats (about 8 per cent.! comes from copra; and that the other countries that produce oils and fats for export, will now be in sharp competition with Netherlands Indies in those markets that are still open. It might be added that the most important available market, the United States of America, cover their full requirements of coconut oil from the Philippines, which country enjoys a pre ferential tariff.

As is known, the position of copra in the world market was weak for some time prior to the outbreak of war, occasioned by overproduction during a number of years of oils and fats, caused by a steady increase in the offerings of different sorts of vegetable and other oils and fats, which by the advance in technical know ledge were made satisfactory for the same uses, while on the other hand the consumption slowed down as a result of economic conditions in many consump tion centres.

Through the loss of the principal buying markets for Netherlands Indies copra, the situation is now so unfavour able, that for most of the copra available for export from the Netherlands Indies, no payable market is to be found.

For an example, the average price per

100 kilograms of Menado F.M.S. exclu sive bag, has been as follows: 1927 f 24.30 1935 „ 5.90 1928 „ 23.90 1936 „ 8.00 1929 „ 20.25 1937 „ 7.65 1930 „ 14.60 1988 „ 5.00 1931 „ 8.90 1939 4.55 1982 „ 7.70 (Aug. 27) 1933 4.50 1940 1.60 1934 „ 3.25 Without assistance, the price will with out doubt decline further.

Such a condition cannot be permitted, because the population in large districts, such as North Celebes, the Moluccas and some parts of West Borneo, and the West Coast of Sumatra, depend to a large ex tent on the return from copra. The situ ation, however, is not catastrophic, be cause the population of these districts has, since the outbreak of war, gone over to growing foodstuffs; and this, accord ing to the result of an inspection, will provide sufficient food for practically the whole of the year. However, the indis pensible income to allow of purchase of clothing and other necessities, can only come from the sale of copra, and this has now reached a stage of stagnation.

Recent Exports

EXPORTS of copra from Dutch East Indies in recent years were:—

These are tons of 1000 kilograms.

In addition to these figures, the outer posses sions exported to Java the following quantity of copra:— 1938 27,832 tons 1939' 61,349 tons The principal markets for Netherlands Indies copra were Scandinavia, Central Europe and countries bordering on the Mediterranean Sea.

These countries took:— 1937 .. 353.186 tons, or 70.8% of the total export 1938 .. 422,058 tons or 76.1% of the total export 1939 .. 380,754 tons or 71.5% of the total export The other export destinations in those years were:—

Mr. Ivan Champion, having fought a 2-months’ losing battle with A.I.F. wallahs (who insisted that his eye-sight would not pass the test—said eye-sight having taken him across unexplored New Guinea two or three times) has returned to Papua, and has gone to Daru to re lieve the R.M. (Mr. Austen) for a few months.

From: 1938. 1939.

Sumatra lOff.goS 110,213 Pontianak 41,063 35.798 West Coast of Borneo 31.220 31,128 Bandjermasin 4 Macassar 228,385 212.756 South West Celebes 7.784 9,471 Minahasa (inch Kwandang) . 43.283 40,378 Toll-Toli & North Celebes .. 510 588 Sanglr Islands 25,108 -24,164 Tominlbocht 8,013 17.844 South East Celebes 12 —

Ternate & Ambon and their surroundings 3,808 6.868 Sunda Islands 21,292 10,831 Riouw 33,629 28,185 Java 3,243 200 Other sources 1,224 3,523 Export from the whole Netherlands Indies 554,481 531,947

1937. 1938. 1939'.

Great Britain 85 1,312 Arabia — 1,142 Penang 11,837 9,890 9,884 Singapore 111,233 110,631 113,607 China 351 1,934 7,524 Japan United States of America: 7,309 4,925 1.403 Atlantic Coast 58 95 Pacific Coast 5.378 .— 4,155 Mexico 8,804 5,043 4,155 Total 145,055 132,423 151,193