Uneasiness In Relation To
pp. 17-18 · Read in the full issue
Copra Market
Assault on Sterling Seen As Threat to British Guarantee
A MINOR panic, caused in New Heb rides, New Caledonia and French Oceania by the temporary failure of GNAPO (the French official copra buying authority) to continue the pur chase of copra at the rates ruling in the early part of 1949, has subsided.
It has been officially announced that GNAPO will continue to buy French Territories copra until the end of 1949; but there is no guarantee of price and no undertaking that GNAPO will con tinue buying after 1949.
An article on page 33 of this issue de scribes conditions in the New Hebrides, after the disappearance of the (Sopra market.
The announcement that GNAPO will continue buying copra followed a strong appeal to the Minister for Overseas France by M. Roger Gervolino, who is a representative of New Caledonian in terests in Paris. He said that he had directed the attention of the Minister to the serious situation which must de velop in the French Pacific Islands should GNAPO fail to meet what are regarded as its obligations.
M. Gervolino added that the 150,000 people in French Pacific islands depended on receiving regular payment for their copra, and if there were any disturbance in this arrangement they would lose a major source of income and be very hard hit GNAPO had compelled producers to deal through it, and there would be an unfavourable reaction, against France, if the organisation did not fulfil its under takings.
The Minister apparently reviewed the whole situation because GNAPO renewed its operations early in August.
AUSTRALIAN copra interests watched the GNAPO development very closely, because there is a feeling abroad that British copra prices may be threatened with a decline.
Copra producers in British Territories —especially Fiji, Solomons, Gilberts, Papua and New Guinea —have been in clined to congratulate themselves on hav ing, as from the beginning of 1949, entered into the British Ministry of Food contract, guaranteeing copra prices over a period of nine years. It was felt that this gave much-needed stabilisation to the industry.
Now, however, there is a persistent rumour that all is not well with the British Ministry of Food contract —that the guarantee is not necessarily “iron bound”.
The “PIM” has tried to track down the source of this report—but can find noth ing whatever on which it may be based.
But it is a fact that there is uneasi ness among the biggest men connected with the copra industry in Australia.
THE Australian Minister for External Territories (Mr. Chambers) in Can berra on March 3, officially an nounced that Australia had entered into a contract with the British Ministry of Food, under which Britain for nine years would guarantee a price for copra from the Australian Pacific Territories; and that the price for 1949 would be £4B Stg. per ton, FOB, Territories ports.
That statement was quite definitely made, with a promise in the following week that details of the system would be worked out and made public: but there has been no further Ministerial statement, and no details.
The announcement made in 1948 in Suva, with regard to the copra price in the British Pacific Territories, was equally definite.
The uneasiness to which we refer may be due to the fact that the British financial structure is being bitterly as
sailed at the present time; and that, in turn, may be causing commercial and
financial houses to wonder whether Britain can honour that copra guaran tee. She was quite sincere in making the contract, of course; but economic troubles are falling thick upon her, and she may not be physically capable of carrying it out.
There still is a great shortage of com modities in the world, including vege table oils, and there seems to be no reason why copra should fail to find a ready market, for at least a year or two.
There is an enormous margin between £4B Stg. per ton (1949 price) and the 1939 price of around £10.
But fear in the hearts of all copra growers is induced by the knowledge that, in this mad, post-war world, there can be very little profit in copra under £3O per ton. War and post-war troubles, plus a world-wide orgy of Socialism (in which millions of men are trying to do as little work as possible for as much as they can get) have increased costs beyond all reasonable calculation, and put 1939 standards completely out of gear.
The Pacific copra market is bound up with the fate of the British £. If it falls, the price of copra must fall, too, because the guaranteed price of copra is based on the £ Sterling, and not on the Dollar. £4B Stg. (the guaranteed price of copra in New Guinea) is equal to £6O Australian. If Sterling is depreci ated, it is not to be expected that the Australian £, instead of being valued at 15/- Stg., should be at par with Sterling. If the £ Stg. breaks, £4B Stg. may be worth only £4B Australian, or less.