The Outlook For Copra

Factors Which Influence Future of Pacifies Staple Product

In this article, specially written for Pacific Islands Monthly, JB (an ex perienced coconut planter), shrewdly and convincingly discusses the prospects of the copra-producing industry. His references to the possible extended use of margarine are of particular interest at the present time.

THE Pacific planter who wishes to fore cast the trend of the copra market in the years to come finds difficulty in obtaining accurate information on which to base his estimates.

In the British sections of the copra world, Government control —which is per haps the most important feature of post war production—appears to be more concerned with tying up production than with any long-range plans for develop ment of the industry.

One result of this policy is that owners of coconut plantations and prospective investors in tne Islands have been forced to the conclusion that, whilst existing plantations can be worked at a profit, there is not sufficient inducement to warrant the heavy expense and time involved in laying-out new plantations.

After World War I, in the Mandated Territory of New Guinea, a fairly heavy planting programme was undertaken.

Even under the Expropriation Board (which was mainly concerned with the maintenance of plantations until the properties were sold) many new areas of palms were laid down; and, when the plantations were disposed of by tender, 10 difficulty was experienced in obtain ing bids for virgin land suitable for the establishment of coconut plantations.

From the time the Expropriation Board :ook over, early in 1920, a steady fall took ilace in the world price of copra. Where is, in 1920, the price was in excess of £3O ier ton, and remained above that figure for three or four years, by 1925 the price had fallen below £3O and. month by month, we saw a steady falling away in vorld prices, until the disastrous collanse )f copra prices—along with the collapse of nirnary products prices generally—oc ;urred during the depression years.

During the years of depression, and the var years, practically no new plantations vere established in any copra-producing irea of the world; and indications are hat very little new planting has taken )lace since the war finished. In addition, n some areas, plantations were destroyed >r damaged as a result of war activities.

Uso, a proportion of very old plantings vent out of production.

Most producing countries have not got jack to pre-war production figures. It s very doubtful whether pre-war figures ;an be obtained for many years to come.

SUBSTITUTES for coconut oil have not J made the headway that their spon sors expected. The failure of the Ministry of Pood’s groundnuts scheme in Africa is a case in point. Before the war, ilso, whale fishing provided an important übstitute for coconut oil, and the cheap ness of whale oil was used as a lever to lepress the price of copra. Whale fishing s no longer cheap, nor is the volume of ►reduction from this source to be corn ered with that of pre-war days.

The question of demand requires at ention, in order to make a long-term orecast. In many countries of the world margarine is not a substitute for butter

but the primary staple for people who have never been able to afford butter.

Australia, New Zealand and Great Britain now enjoy the cheapest butter in the world. In Australia the price of butter is heavily subsidised in order that it may retail at 2/2 per lb. A large in crease in the present subsidy is long over due. The price of butter in Great Britain is kept low because of the existence of long-term agreements between the Min istry of Food and the Governments of Australia and New Zealand. In western

European countries the average price is around 6/- per lb., and in USA 8/- per lb.

With the present drift from the dairy

ing industry in Australia, and the diver sion of an ever-increasing proportion of milk to the manufacture of milk products other than butter (a tendency which is world-wide in dairying countries, and not unique to Australia) the statistical posi tion for high world-parity butter prices for years to come seems assured.

The comparison between butter pro duction in Australia and the production of copra in the British sections of the Pacific is very close.

Neither the dairying industry nor the

production of copra, can be greatly in creased overnight. The population of the world is increasing fast; but a more im portant factor in maintaining demand will be found in the improved standards of living demanded by the peoples of the world.

WORLD parity prices for copra to-day are well over £I3OA per ton at European or American ports. In countries where planters are in a position to sell at world parity prices, this will be

a powerful inducement to increase their planted areas, where suitable land is avail able.

In the Pacific countries, however, where the price is controlled, to the disadvantage of planters, a policy of stagnation will en sue until the price is increased to an amount which will act as a spur to plan ters to take the risk of what their returns will be in 10 or 12 years after planting, when the areas really come into bearing.

INCREASES in costs since the inception of the British Ministry of Food’s nine years marketing agreements have, in most cases, wiped out completely the bene fits of any increased prices under the annual revision clauses.

On June 13, 1951, the Chairman of the Colonial Sugar Refining Co. stated, in regard to the price of jute; “Abandonment of price control (in India) on both raw and manufactured jute goods . . . resulted in a phenomenal increase on the previous official prices. Cornsacks . . . rose quickly from 3/4 to 5/- each and are now around 6 6, compared with 7«d in 1939. ...” That is an illustration of how production costs have been affected.

Tinned meats (for ration purposes) are around £5/10/- to £6/10/- per case of 48/12 oz. tins at Island ports. Before the war the cost would have been around 30per case, or less. Calicos, which cost around 4d. or sd. per yard pre-war, are now between 5/- and 6/- per yard, and becoming almost unprocurable. Equipment costs have soared. In 1926 to 1928 the Expropriation Board was able to charter ships to load copra at Rabaul and other islands ports for shipment to Europe at around 30/per ton. At present it costs four, five, or six times that much to ship copra to Syd ney. Rice, the chief food for labour on many plantations, is now about eight times pre-war cost.

IITITH high wages and boundless oppor ▼ f tunities for well-paid employment in Australia, it is very difficult for plan iation companies or individual owners of plantations to obtain suitable European itaff, although they are prepared to offer >reviously unheard-of inducements in the vay of salary, bonuses, and amenities.

Native employees, demoralised to- a great ixtent by the War, and encouraged by nexperienced Government officials and >oliticians, are expensive and inefficient, rhe virtual abandonment of the long erm labour contract makes it very diffi ult for the plantation manager to bring lewly recruited labour to a reasonable tandard of efficiency.

The Governments of the Pacific should ecide quickly whether they wish the copra idustry to decay over the coming years, r whether they are prepared to alter tieir policies in order to give positive en ouragement to an industry which at one ime merited the name of “The Consols f the Pacific ,5 The development and economic stability f the copra industry must no longer be abordinated to the desire of the various (ritish Governments controlling Pacific jrritories to provide cheap copra for the linistry of Food.