Why Copra Bags

Are So Costly

the most important ["/ economic factors in copra production to-day is the high price of copra sacks. This is a survey of the factors influencing that price, and of the outlook.

Probably tne most important date in the copra sack story is August 14, 1947 —the day on which Pakistan, with its rich jute-growing soils of ;East Bengal, declared itself a separate country. Thereby Pakis tan set in motion a chain of events [contributing mainly to the world shortage of jute products—for the f great weaving mills were all in India.

Trade and transport were imme diately disrupted by the political up heaval—and the chaos became complete when, in September, 1949, 'lndia devalued her currency, along with other Commonwealth countries, but Pakistan decided not to follow suit.

Jute then became a political bargaining weapon. Pakistan, with almost all the raw jute supplies, stood to profit greatly by devalua tion of the Indian rupee. The Indian jute mills must buy—or close down. Unable to pay the higher price, they closed when the exist ing supplies were exhausted.

A price agreement was finally reached early in 1951; but by that time the jute transport services were gravely disorganised one of the principal shipping companies involved having gone bankrupt.

The enormously involved diffi culties in re-establishing the flow of supplies from Pakistan are set out in the Indian Jute Mills Asso elation report for 1950 Although by the 1951 agreement 'between the two countries India is to receive about half her total reouirements transport of the raw material by water and rail will be the limiting factor.

India had hoped to attain the other half of her needs from home production during the current season. Considerable planting has

centrXon an“er fo?d

Mglted"^ls Ut,llSe the riCh ’ gacea solls ’ buy- r° IN ? roEN J ™ th f the shorta « e of Jute products from the Pakis , tan-Indra region-the only im- P° producing country—normal demand was on the increase. The

Korean war, and stepped-up arma ments production in the US and elsewhere, call for sacks in ever greater quantities for the transport of the raw materials involved.

In America, particularly, con siderable profiteering developed in the hessian (a product of jute) trade, importers making large profits on resale to the consumers.

The Indian Government, aware of this, imposed an export tax on all jute products, arguing that if the US consumer market could stand the higher price, then India was more entitled to the proceeds than the American importers, who, of necessity would have to reduce then profits when the consumers refused to go still higher.

Australian importers consider that, whilst probably justified in the case of hessian, the present 15 per cent, export tax on sacks is not warranted and they are* making every effort to have.it removed.

Some further factors enter the supply situation insofar as Island Territories (which draw their sacks from Australian sources) are con cerned. The copra-trade’s heavy demand for good second-hand sacks has, in the past, been largely sup plied by the linseed trade; but to day this prolific source of sacks has almost entirely disappeared. The linseed trade finds it cheaper and more satisfactory to import the oil in drums or in bulk, rather than

import the bagged seed and express the oil locally.

Although sugar sacks were never of interest to the copra trade it may be mentioned that, due to the jute situation, the Colonial Sugar Refin ing Co. has changed to calico and recently has imported 6 million yards of that material from Japan.

These second-hand calico bags are available in Sydney at 25/- per dozen, but, like the hessian sugar bag, are much too small and fragile for copra use.

AUSTRALIA to-day receives from India a larger allocation of jute sacks than any other country—about 30 per cent, of the

total Indian output. This is mainly because of India’s need for Aus tralian wheat, and the transport of the wheat requires large quantities of sacks. Importers agree that the present 200,000-tons allocation does not fall far short of Australian new sack requirements. They insist that plenty of new sacks are available to the copra trade —but at the Govern ment-fixed price of around 70/- per dozen f.0.b., Sydney.

The high price, rather than any shortage of new sacks, created a heavy demand for good second-hand sacks.

An acute shortage of the latter developed during the first half of 1951'—not so much because of ab sence of sacks, taut because the merchants held back second-hand supplies in anticipation of a price rise—and they were not disap pointed. In February, the fixed price of first-quality second-hand 4-bushel sacks was 19/- per dozen, On June 29, the merchants woke to find their patience richly rewarded, the Gazette of that date raising the price to 55/-, “to bring the price into line with new-sack prices.”

Details of the basis on which this new price was arrived at are nol available.

Since then, the second-hand sad situation has eased insofar as supply is concerned, but other fac tors still influence the export trade

SACK shortages complained of by individual planters—even at the new price—may generally be traced to the fact that the merchants are reluctant to bother : with export where local markets are [ Those who are interested in ex [port, and have the facilities for fumigation and dumping into bales —only the larger merchants have I these facilities —are still reluctant to handle small orders from the smaller Sydney Island agents. Thus, such agents may phone every sack merchant in the city and invariably ■meet with the reply, “No sacks available” —while the Big Island Firms seem to have no trouble whatever in obtaining supplies. The Big Firms take care of their own dumping problems, and the sack merchants therefore prefer to deal ;With them. In exchange for this business the Big Firms naturally insist that, when sacks are in short supply they shall have first priority.

Thus the individual planter finds difficulty in obtaining supplies.

COMPLAINTS by planters that, having obtained new sacks for copra shipments to Rabaul, they invariably receive back noor quality sacks in exchange, would appear to be untenable. All sacks go into the general pool, and ob viously some planters must be re ceiving good sacks in exchange for poor ones. Naturally, no complaints are received in this case.

Though the average jute sack has completed its life cycle by the third filling, a contributory cause of wastage would seem to be over ramming, especially if an excessive number of bags are allowed to a ship’s sling: the sling often cuts such tightly-filled bags in half if they are at all old.

To-day, with almost all copra ex ported in bulk from the main con centration depots, sacks are mainly used for transport to those depots, and for storage pending shipment Jverseas. But even where sacks ire used for copra, export quaran tine regulations do not permit the reimportation of such sacks from Europe; and it is doubtful whether, ifter all the handling involved and :he cost of reimportation, it would 3e an economic proposition to fumi- Sate and re-import such sacks.

A s to the outlook, Australian jute ■ljl importers consider it most un likely that this country will lave a jute sack industry of its )wn in the foreseeable future.

Even allowing that suitable areas can be found in New Guinea and elsewhere for jute culture—and no country has so far produced jute )f the quality of the Pakistan- India jute—considerable finance would be involved in establishing

sack-weaving plant.

Importers consider that any fibre supplies that may come from the current experimental plantings of jute, kenaf (canna lily) and abaca (plantain), if any, will not affect the sack position. Such fibres will be used for the easier processes of rope-making, etc.

Meanwhile, India is stepping up its jute plantings, and British capi tal is considering the establishment of weaving mills in Pakistan.

The importers consider that, long before any sack industry is well established in Australian territory, those countries will be supplying jute sacks at a much more economic figure than the cost at which Aus tralia can produce a product from an inferior fibre.

The Fiji Medical Department’s new vessel Vuniwai was launched bv Lady Maraia, wife of Ratu Sir Lala Sukuna, recently in Suva. The boat will be used for medical in spections and to carry medical stores and staff to the dispensaries in outlying islands.