World Prices Of Copra

US—Philippines Agreement Stabilises the Market For Year or Two

SLOWLY and steadily, the world’s copra market has taken some shape and stability. For months, so great has been the confusion in world economy, it was difficult to get any idea of nec,s re o a f the U indnlt^ Pra ’ PTOS ‘ pects of the indust y.

Now as the result of the agreement made between Britain and Ceylon a few months ago (under which Ceylon this year receives about £37 Australian per ton) and the more recent agreement between the United States and the Philippine Government, it is possible to make an intelligent guess at the future.

The price of first-grade copra should not fall much below £3O (Aus.) per ton. f.0.b., for a year or two. This is an immens'e improvement on the disastrous rates of 1930-39.

But the high price will not last, once Netherlands Indies and Philippines are back into full production. Unilever—undamaged by World War 11, and apparently as well and pugnacious as ever— will see to that.

Philippines Copra Agreement

UNDER the terms of the American- Philippines Copra Purchase Agreement signed on August 8 in Manila. the Philippines Government has agreed to sell the entire exportable surplus of of copra and coconut oil to the Commodity Credit Corporation (or its designee) for one year, beginning July 1. 1946. The price is 103.50 dollars per long ton. f.o.b.

ocean carrier. Price of coconut oil will be 7 1/8 cents per pound f.o.b. Philippine ports. This will allow importation of copra and coconut oil within the exist ing price ceilings set by OPA.

In . * ddltion T Govern ' ment has agreed not to place any re sanctions upon the production or export Q f copra to the US. All purchases for foreign claimants will be handled by the United States and the Philippines Gov eminent will issue export licenses only to the US or its designee. Purchases for foreign claimants with International Emergency Food Council allocations will be made by the Fats and Oils Branch of the United States Production and Mar keting Administration, normal commercial channels. All copra imported f°V use . in the w . lll 136 purchased by private importers, with control through import licenses.

Shipments of Philippines copra and coconut oil have risen steadily since January, reaching a high of about 60,000 tons in July almost equalling pre-war tonnages.

The remar k a ble recovery of the Phil ippine copra industry has been due to the close co-operation between the two nations for the purpose of increasing the world’s short supply of fats and oils.

The United States furnished inter-island boats to carry copra to market, incentive goods such as textiles to encourage copra collections, and equipment to aid in harvesting and drying copra. Much

of the groundwork resulting in increased shipments was due to the efforts of the Copra Export Management Corporation.

Before the expiration of the agree ment on July 1, 1947, shipments are ex pected to be near the pre-war levels of 1935-39.

More Copra For Europe

WE have received the following mes sage from a special correspondent in London, dated August 21: “We gather, from information received from Philippine merchants, that the United States crushers are getting as much copra as they can. use, and are coming to the point where they are unable themselves completely to absorb the present production, owing to the re strictions on the sale of their coconut oil, while their storage capacity for copra and coconut oil is limited. . . .

From this, it would appear that more Philippine copra will be coming to Europe.”

Normally, more than two-thirds of the world’s copra production came from the Philippine Islands and the Netherlands Indies. All production outside the Phil ippines and the Indies (which were in Jap occupation) therefore was greatly stimulated by the demands of the Allies during 1942-45 —except in New Guinea and the Solomons.

Now, Philippines production is nearly back to normal. New Guinea is stagger ing along under Australian Socialist in terference, and making a sorry job of copra production. Netherlands Indies still are torn by revolutionary influences, and little copra is being produced there.

Europe is still in a sad state; but Europe should be able to consume all the copra that can be made available from the Philippines and other sources, for at

least a year or two. But as soon as the Dutch restore order in the Indies, and Indies copra is again available for Europe, the world price may begin to sag. That should not be before 1948.

Disparity In Prices

At present, there is much disparity in prices. Here is a comparison of what appears to be the f.o.b. price in various places, reduced to Australian currency.

We do not guarantee accuracy to within fl or £2, but it gives an idea of what is ruling: Per Ton Aust.

Ceylon (paid by Britain, for one year, from June, 1946) £37 New Guinea (paid by Australian Government through Produc tion Control Board) ;• • 221 Philippines (paid by US, through Commodity Credit Corporation for year) 33 Fiji (paid by British Government, through Fiji Government) 26 There is much variation in quality of copra—Ceylon being about the world’s best. But that does not explain the wide variation in prices. Both New Guinea and Fiji seem to be getting a raw deal.

The Australian authorities say they are trying to build up a reserve pool for the benefit of the New Guinea pro ducers. If the New Guinea producers are wise, and have learned anything from political history, they will insist onget ting the full value of their product now.

The worst feature of the whole set up is seen in New Guinea. Instead of New Guinea copra production increasing steadily, to get the benefit of the world market —which will never be better —and to assist in the rehabilitation of the war shattered Territory, the production of copra has declined sharply in the last six or nine months. This is the result of Socialist interference with the Terri tory’s economy—seen in the absence of essential transport, and the disappear ance of the native labour force.

Nei Copra For America

It was announced in Washington on August 18, that the Netherlands Indies Government had agreed to sell and ex port the surplus copra of the East Indies to the United States Commercial Credit Corporation.

This agreement evidently complements that made with the Philippines Govern ment on August 8.