American Consumption
p. 34 · Read in the full issue
Of Copra
Battle Between Margarine and Butter
Washington, June 1.
BATTLE in Congress, over a change in laws to favour the manufacture and sale of oleomargarine, is watched by oil and fats experts here from the stand point of potential international com mercial effects.
For historical reasons, the fight between domestic oleomargarine versus butter pro ducers is of special concern to producers of copra and coconut oil. African palm oil can be, but is not now used here in margarine manufacture.
Edible whale oil is an important in gredient of margarine manufacture in Europe and Japan, but is not a factor in United States production. Chemically and industrially, whale oil could be pro cessed in this country, but established custom and a high tariff will prevent its use within the known future.
However, the expanding margarine in dustry here is absorbing ever-greater quantities of domestically-produced fats and oil, hence the volume of vegetable oils available for export might be cur tailed, to the indirect advantage for whale-oil sellers there.
The House of Representatives has already approved the Bill removing the excise taxes on oleomargarine. Dairy state senators in the Senate will make a long and bitter effort to frustrate action by the House, or to moderate its terms if possible.
From the industrial standpoint, the fight for margarine grew out of the expanding national production of cottonseed oil, soy bean oil and peanut oil, raw materials, and
improved processes of manufacture.
The use of cottonseed oil in margarine manufacture increased from 108,106,000 pounds in 1936 to 452,691,000 pounds in 1948; and the use of soybean oil increased from 14,261,000 pounds in 1936 to 252,728,000 pounds in 1948.
The interest of many cottonseed and soybean producing States gave the mar garine group, for the first time, sufficient Congressional support to challenge the long-existing preferential status enjoyed in butter-producing States in the excise tax structure.
Meanwhile, the use of coconut oil in United States margarine plants declined from 150,465,000 pounds in 1936 to zero in war years 1943 to 1945. Since the war, such use has been; 14,507,000 pounds in 1946, 21,214,000 in 1947 and 5,471,000 pounds in 1948.
Because the Philippine Republic has a preferential status in United States im ports of coconut oil, under the Philippine- United States Trade Act, the changing situation tends especially to affect that country. At present, imports of Philio pines coconut oil are used chiefly for soap manufacture.
The United States also imports copra (raw material for coconut oil) in large quantities from the Philippines. Copra is duty free from all countries, but the United States maintains an excise tax on the first domestic processing of coconut oil. Before the war this tax was three cents per pound against the Philippine product, and five cents against other foreign countries.
The rate was made uniform at three cents per pound during war years when there were no imports from the Philip pines. The Philippine Republic, according to trade sources, is now trying to renew its former preferential status. This could be accomplished legally by presidential proclamation to restore the five cent rate against other foreign countries.
Generally, the United States, after war time shortages, again has abundant sup plies of vegetable oils and animal fats.
Effects of changed margarine laws on in ternational trade may therefore not be appreciable in early years. Total United States stocks of oils and fats increased from about 1,200,000,000 pounds at start of 1948 to 1,600,000,000 at the year’s end.— United Press.