Survey by United Kingdom Expert

World's Oil Market Still Short-Supplied

TN this article, which is republished from the “Bulletin of the Imperial A Uto September issue, 1946, Frank E. Fehr, CBE, probably the flit.™ *IV/ rea J 6St -i auth <? nt y on edible oils, discusses the present and Kingdom S * ° n ° f ° llS and 011 seeds ’ with s P ecial reference to the United

DURING the war period, supplies of oils and fats including butter, lard and margarine, imported by the United Kingdom, must be considered as satifactory.

Pre-war imported supplies of oilseeds (expressed in oil content), oils and fats —including butter, lard and margarine— (after deducting exports which were in 1937 138,559 tons and in 1938 127,328 tons) were: In 1937—1,332,085 tons; 1938 1,462,454 tons.

During the war, similar imported sup plies were: In 1940—1,397,280 tons; 1942 —1,269,186 tons; 1944—1,314,626 tons; and in 1945—927,891 tons.

From these figures it will be seen that the percentage reduction in imports dur ing the war was comparatively small, showing an approximate reduction of 8 to 10 per cent., but from an average during the war of about 1,300,000 tons and a pre-war average of about 1,400,000 tons we dropped, in 1945, to about 927,000 tons. That explains the present shortage of oils and fats in the United Kingdom.

Throughout the war period, there was a considerable diminution in the import of butter; whereas, say, in 1938 we had an import of butter of 475,895 tons, the war imports of butter were: In 1940 264,350 tons; 1942—134,314 tons and in 1945—190,134 tons.

These figures show that the war im ports varied from 134,000 tons to 164,000 tons, that is, less than half the pre-war import. This diminution was mainly due to lack of imports from the continent.

On the other hand, lard—of which in 1938 we had an import of 72,046 tons showed a considerable increase in im ports, the year 1940 being an exception when the imports were only 34,731 tons.

By 1944 they had risen to 189,209 tons but slumped again in 1945 to 90,000 tons.

The big imports of lard during the war were the effect of Lease-Lend. When in 1945 they dropped off because Lease-Lend came to an end, we had to look else where for additional supplies of fats.

In 1945, the total supply of edible oils shows a very considerable reduction,

viz. as above indicated, 927,891 tons.

Butter in that year kept up to the war level; on the other hand lard showed a considerable decrease in net imports, and oils and fats dropped right down to 674,774 tons. This was, no doubt, largely due to .the fact that it became necessary to divert a considerable quantity of oils and fats and lard to supply those countries which had been deprived of supplies during the war.

IfTE have to consider what are the pros f ▼ pects of future supplies. No doubt in due course we shall get better supplies of whale oil. For the 1945-46 sea son the quantity expected is 130,000 tons.

The next catch, viz. 1946-47, I should think might easily amount to 250,000 tons. We shall gradually get back to the 400-500 thousand tons we had pre-war.

No doubt we shall now get increased supplies of copra and coconut oil. The annual import of copra pre-war averaged 105,000 to 110,000 tons. During the war the import fell off considerably. In 1944 it dropped to 32,398 tons; in 1945 it was rather better at 55,392 tons.

It is stated that the Philippines are shipping at present 25,000 tons a month, and during the last six months of 1946 it is expected they will ship 200 000 tons.

There will not be much oil from the Philippines for some time because their factories were badly damaged. No doubt the Netherlands East Indies will also start shipping and there will be larger supplies from the South Sea Islands.

Undoubtedly a portion of this copra will come to the United Kingdom. The ten dency is for most of the copra to go to the USA, but there will probably be a surplus which will come here.

Whereas as against this it is to be noted that our imports of palm kernels pre-war averaged, say, 150,000 tons a year. During the war we received a very much larger quantity. In 1942, for in stance, we received 414,415 tons and in 1944 493,635 tons.

A great effort throughout the war was made to get supplies of oils and fats and oilseeds from the West Coast of Africa as the short journey presented a consid erable economy in shipping.

When we come to 1945 a good portion of the palm kernels were sent to other destinations and the supplies to the United Kingdom dropped down to 293,083 tons. We must expect a further dimi nution in the suplies of palm kernels to be shipped to a considerable extent as pre-war to other destinations. Pre-war, Germany was the main recipient. Now they are going to Belgium, Holland and Scandinavia and that cuts down supplies to this country.

In decorticated groundnuts pre-war, we had an average supply of, say, 280,000 tons. Again, here during the war, the supplies received in this country in creased considerably, the peak year being 1941, when we had 606,909 tons. In 1945, the quantity had again dropped to 406,479 tons. Here, again, we must expect some diminution in supplies as groundnuts will be diverted to other centres.

Soya Beans were never a very impor tant article for this country. Pre-war, our supplies were about 95,000 tons.

During the war supplies dropped to a few thousand tons a year, except for 1943 when we received a fair quantity

from .USA, namely 28,189 tons. Man churia produced 45 million tons pre-war.

All that supply was cut off during the war, but it was presumed that in due course Manchuria will again become an exporter of soya beans.

As far as linseed is concerned, pre-war, our average imports were about 290,000 tons. During the war supplies increased considerably and varied from 232,100 tons to the peak year of 1943 when they were 506.998 tons. In 1945 the imports dropped right down to 142,307 tons. It is to be hoped that with normal crops in India again we shall get better supplies of lin seed from there, and that also there will be a tendency for the Argentine to have larger quantities available for export.

Pre-war, our imports of cottonseed were about 600,000 tons. During the war imports dropped very considerably, and in 1943 we had come down to 14,411 tons, and in 1944 to 10,027 tons. In 1945 we had again some increase, and the imports amounted to 41,848 tons.

It is to be presumed that cottonseed imports will again be greatly increased.

Ebypt will no doubt get back to a more normal production although, undoubtedly, she will require a larger quantity for her own consumption than formerly. During the war, little cottonseed was imported as it is only 18 per cent, oil content.

In South America, where there has been a very largely increased production of groundnuts and sunflour seed, there has also been a very large increase in crushing capacity. The Argentine is now able to crush 1,350,000 tons of sunflower seed, which is a very marked advance on* what she was able to crush pre-war.

No doubt we shall see an extension of crushing at points of production such as South America, India, Malaya, Australia and China, although crushing at the consuming centre has the advantage of giving the crusher a much wider market from which to draw his raw material.

Wc must expect an increased consump tion of oils and fats the world over as the demand for soap will increase, also the demand for margarine, as vitamin ised margarine tends more and more to replace butter, but it should be possible to extend the production of oilseeds to meet this demand. We have seen the enormous advance made in the produc tion of palm oil in Sumatra —a compara tively new production; in 1930 the quan tity produced totalled 56,000 tons; by 1938 it had reached over 200,000 tons.

The USA in 1936 produced 793,286 tons of soya beans: in 1944 the production totalled 5,165,973 tons. Undoubtedly in South America, Africa, Australia and also in Asia, there is room for an enormous increase in supplies.

During the war, fresh sources of sup ply were created; these will tend to con tinue to produce, and we shall have pre war production steadily restored.

We can expect the whale oil production in due course again to reach 4-500,000 tons, and we shall again get normal but ter imports. Butter producing at home, which pre-war totalled about 40-50,000 tons, was considerably reduced during the war, but will now slowly tend to in crease.

As traders, our one fear is that res trictions and pool purchasing will tend to restrain that free movement of com modities which is essential to obtain maximum supplies.

Too much emphasis cannot be placed on the necessity of inducing a free flow of merchandise (manufactured consumer goods) to producing countries in order to encourage the maximum collection and production of supplies of oilseeds and oils.

If the producer can get actual goods in exchange for his produce, the effect on supplies is most marked.

In Borneo and New Guinea the whole labour basis has been upset. The Austra

lian Government has introduced certain restrictions as regards labour. The Prime Minister of Australia has had the whole matter placed before him recently, and it is hoped that something may be done.

It will need a very great effort in all these Dominions to set the wheels of production in motion again. In twelve months we should have enough oils and fats in this country to get through; at the moment the position is most acute.

IN connection with the foregoing, the following statement is relevant. It was made by Mr. George Hall, the Secretary of State for the Colonies, in his speech on Colonial Affairs in the House of Commons on July 9, 1946: “Many new industries have also been

started in the Colonies during the war, and industries which existed on a very small scale have been substantially ex panded. Some of these industries will be the foundations on which we shall build for the permanent enrichment of the Colonies, “Some are suffering from the world food shortage, particularly the Far East Colonies and Ceylon. His Majesty’s Gov ernment are doing their utmost to mini mise suffering due to l these shortages. In spite of them, there is everywhere in the Colonies a determination to send more food to Britain, and with the co-opera tion of my colleague, the Minister for Food, I am doing everything possible to help them fulfil this task.

“A bumper crop of groundnuts has just been harvested in Nigeria. Supplies of

this valuable source* of fat are, however, so short, and are likely to be for some years to come, that the Government has decided to make a special investigation of a project for large-scale new produc tion of groundnuts in East Africa. A team of expert investigators is now in Tan ganyika carrying out that investigation.

We have also just decided to send a mis sion to West Africa to see what assis tance can be given to increase production, and to speed up the transport of ground nuts and palm kernels. My Department is continuing discussions with the Min istry of Food to ascertain whether a field exists elsewhere in the Colonies for similar encouragement of fats produc tion.”

When passing through Brisbane by the flying-boat “Coriolanus” recently, Mon sieur J. Tallec. former Governor of New Caledonia, said there were unlimited tourist possibilities in the French Colony, and that New Caledonia hoped to at tract tourist troffic. He was on his way to Canberra to attend the South Seas Conference as a member of the French delegation. Accompanied by his wife and daughter, he will then go to France for a holiday. Before his New Caledonian appointment, M. Tallec was financial ad visor to the Lebanon Government for 15 years.

Captain Alison Alexander Markwell died suddenly on February 23, while on his ship MV “Cora” off the west coast of Cape York Peninsula. He was well known in the South-west Pacific island territories where he had sailed for 30 years. During the war he was in charge of transport between New Guinea and Australia. He was born in Brisbane 58 years ago and is survived by his brother Donald of Maryborough, Queensland and his sister Miss Dorothy Markwell of Red cliffe, Queensland.