Free Copra Market Over £7O

A Ton

New Guinea Producers Get Raw Deal

THE publication of the annual report of the London Copra Association in London in March, summarising the world’s copra mar kets as at the end of 1946, has produced some surprises. It is shown that, where copra is permitted to run free (as in the Philippines) the market value is about twice that per mitted where the price is under sharp control, as in the Australian Terri tories. The survey shows that the following are the current prices, mostly on an f.o.b. basis: —

The only market which is free to respond to the law of supply and demand is Philippines, where the price has gone to over £7O. The market in Ceylon, Malaya and Fiji is controlled by Britain, where the only buyer is the British Ministry of Food; and, as can be seen, and as is made clear in the Copra Association’s re port, that Ministry will shift its price around to meet local conditions —and especially the competition of local crushers.

The outstanding fact, from all this, is that the planters in the Australian Territories of Papua and New Guinea are getting an exceedingly raw deal from the Socialist Government en throned at Canberra.

THE annual compilation just made available in London shows that in a normal year (1938 is taken) the fats and edible oils available in the world were between 3,000,000 and 4,000,000 tons per annum. Of this total, vegetable oils con tributed some two-thirds. The main tropical oil products were copra, palm oil and palm kernels, totalling some 2,000,000 tons. Copra represented 60 per cent., palm oil 25, and palm kernels 15. Of the 2,000,000 tons, the Netherlands Indies contributed 30 per cent., the Philippines 19 per cent., Nigeria 13 per cent., Malaya 8 per cent., Ceylon 6 per cent., Belgian Congo 5 per cent., and the South Pacific between 3 and 4 per cent.

As a result of the war, both the quan tities of tropical oil-seeds available, and the types produced, have been much altered. Details are given in the following article.

Generally, it can be said that there has been a marked reduction in copra from Ceylon, Malaya, Netherlands Indies and the Southwest Pacific. The quantity coming forward is enormously short of the world’s demand —and this shortage is likely to continue for some years.

We are indebted to Mr. Roy Fischel, of the well-known old London firm of L.

M. Fischel & Co., Ltd., for the following extract from the annual report of the London Copra Association:

South Pacific

COPRA Pools have been formed at all the producing centres of South Sea Copra.

These Copra Pools are worked under the direction of the Governments. All copra produced throughout the Islands, whether native production or from the plantations, has to be tendered to these Pools, and then the copra is sold by the Governments to the Governments, the bulk of it now coming forward to this country, bought by the Ministry of Food, and a portion is allocated to Canada.

Merchant Companies are therefore no longer allowed to participate in the copra trade in the South Sea Islands as it is carried on at present, and they are not even allowed to handle the copra from their own plantations. It looks as if it will be a very long time before the trade in South Seas copra can come back to normal trade channels.

Dutch East Indies

THE latest reports received by us con firm that Holland will receive about 10,000 tons of copra per month, during 1947. Should further quantities become available during the year, allo cations have been agreed upon for vari ous European countries. Such allocations, however, are of moderate dimensions. As yet there is no sign that exports will improve. The stocks which are- at the principal loading ports, such as Macassar and Menado, are small.

Many of the small coastal vessels which, prior to the war, carried the copra from producing Islands to the main Dutch East Indies shipping ports, were destroyed by enemy action; and until an improvement in the shipping position takes place, larger supplies are not likely to be forthcoming.

Early this month six coasting vessels were sent out from Holland to the Dutch East Indies to assist in shipping copra from the Moluccas Archipeligo, so it is

Country Price per ton (In Australian Currency) Ceylon £40 Malaya £50 Philippines £71 New Guinea £28 Fiji £33

reasonable to assume that, as time goes on, supplies will increase.

Straits Settlements

THE position has undergone little change during this year. Export, except to this country, is still prohibited; and the price the Ministry of Food is pre pared to pay offers no effective competi tion to the local oil mills, which appear ready to absorb all supplies offering.

The very high price they are making for the residual Cake places them in a strong position and, though the British Ministry have recently advanced their buying prices to £4O f.o.b. for Sundried, and £39 f.o.b. for FM, it is very doubtful if they will be able to secure material supplies till the available quantity offering increases considerably.

Ceylon

IN last year’s report it was mentioned that negotiations were taking place between the Ceylon Government and the British Ministry of Food for a further contract for copra, and in the meantime a temporary price of Rs. 100 per candy was fixed.

Ultimately, an agreement was reached between the two parties, and a contract concluded for the supply of copra for a period of five years at Rs. 100 per candy. (A rupee is worth 1/6 sterling, and a candy is about equal to a quarter of a ton. The price, therefore, is equal to about £A37 per ton.) Exports of copra from Ceylon during 1946 were considerably less than in the preceding year, the comparative figures being 113,7u7 tons in 1945, as against 38,810 in 1946. Of this latter quantity the Commodity Commissioner shipped 9,303 tons, or approximately 24 per cent.

The difference can to some extent be accounted for by an increase in milling on the island, due to an acute shortage of copra cake owing to the prohibition of imports of gingelly cake from India. Con sequently, a larger percentage of copra has been shipped as oil—namely, 43,074 tons in 1946, as against 38,676 tons in 1945.

This still leaves a wide margin, how ever, between the available supplies in 1945, as compared with 1946, and this Is largely due to a severe drought which was experienced in the earlier part of the year.

The copra crop in Ceylon is nevertheles < on the decline and this is due to the lack of new plantings in the pre-war period owing to low prices, and neglect of drain age and manuring. Consequently, there is a noticeable falling-off, in the yield per acre. This is a very serious aspect at a time when oil seeds are so urgently re quired in this country, and it would seem vitally necessary that a long-term re habilitation policy should be introduced by the Ceylon Government.

The view expressed in our last report, that Shippers’ London Houses might again be re-established in trade to ad vantage, has not been possible due to the Government policy of bulk purchase,

and as we write it does not seem as if conditions are likely to change.

Philippines

ON July 4, 1946, the US Government gave the Philippines people their independence, and on that date the Islands became the Philippine Republic.

At the same time, the US Government entered into a Treaty with the Philippine Government to buy the whole of the copra production of the Islands for the 12 months ending June 30, 1947, at a fixed price of US 103.50 dollars per ton of 2,240 lbs., F.A.S., Philippine Port.

An important part of the Treaty was that the US guaranteed to supply the necessary tonnage whenever copra was ready for shipment, in order to relieve the congestion at storage points, as great damage had been done during the war to all warehouses. Shipments, however soon became very heavy, reaching 60,000 tons monthly. American crushers found this quantity too large for them to deal with, and considerable quantities of Philippine copra were allocated to the British and European Governments.

The Philippine Government, however, soon considered that the price contracted at was too low, and an open market would be more advantageous to the Philippine producers.

About the beginning of November, 1946, the US Government acceded to the Philippine Government’s request and ab rogated the Agreement, with the result that the price at once rose to 150 dollars per ton f.a.s., and continued to rise until on December 31, 1946, considerable sales

were made to both US and European markets at the equivalent of US 205 dollars f.a.s., Philippine Port.

The price continued to advance being quoted at the end of February the equiva lent of US 225 dollars f,a.s.

Copra production was not affected by the war and the occupation of the Islands by the Japanese, and to-day it can be estimated at about 650,000 tons per year.

As all the larger oil refineries in the Philippines have been destroyed, or badly damaged, practically the total produc tion has now to be exported as copra, while before the war 30-40 per cent, was exported in the form of oil and dessicated coconut.