Mysterious Drop in Cocoa Prices

Shocks Western Samoa

From Our Owr Correspondent

Apia, Feb. 10.

CONTRARY to predictions, based on world shortage of cocoa-beans and increased world demand for cocoa and chocolate, the price of Samoan cocoa-beans has declined rapidly in the last two months.

The price of beans, fob Apia, just prior to the appreciation of the New Zealand £ in September, was £2BO. After the alteration of the exchange it was £220 Stg. per ton. This price was maintained until November, 1948, but by February, this year, the price had dropped to £lOO Stg., fob Apia, and some buyers who had bought from producers at higher rates were facing considerable losses.

A few buyers who are still working on old overseas contracts have succeeded in disposing of small lots from £l9O down to £ 150 per ton. Another gleam of hope, in an otherwise depressing situation, is that there have been many inquiries from countries which have previously not had allocations from the International Food Control Board, in Washington, to whom the bulk of Samoan cocoa goes. Sale of Western Samoa cocoa to the United States has been a great dollar-spinner but now local buyers are making efforts to get the Board to agree to sales to those countries ready to pay a higher price.

Fortunately Western Samoa has recently made a 10 years’ contract agree

ment with the United Kingdom for the supply of copra, thereby stabilising that industry. But, nonetheless, it is inevitable that the sudden slump in local cocoa prices must affect the economy of the Territory and doubts have already been expressed as to whether we will be able to carry out the elaborate schemes of road-building, education, hydro-electricity, e tc.

It has always been realised that the prices obtained for Western Samoan cocoa in recent years were abnormal; but no one believed that the drop would come so suddenly or so sharply, at this stage, when production has by no means caught up with demand. The real reason for the slump—which is contrary to all natural laws of supply and demand —is a mystery to local cocoa interests. There is a belief in some quarters that American buyers are forcing down the price of Samoa cocoa in order to resell it at a substantial profit in Europe. (Editorial Note: There has been a world-wide drop in cocoa prices—Western Samoa is by no means the only sufferer.

As we reported in the February issue of

“PIM”, there has been, in recent months, a drop in the price of cocoa-beans, in Sydney, of from £4O and £BO per ton.

Local merchants are at a loss to explain

this, as there is still a heavy demand for chocolate and cocoa, and 100 per cent, of the world cocoa supply has been sold each year. Only recently a spokesman for the British Colonial Office stated that the international shortage of cocoa beans was likely to continue, and would probably intensify).