Rubber Outlook:
pp. 63-64 · Read in the full issue
Gloomy
In a survey of the rubber outlook in the March issue of New Com monwealth (which incorporates Crown Colonist ), the future of the natural industry for British Com monwealth producers is held to be “unrelievedly depressing.”
This opinion is apparently based on the inevitable outcome of the in evitable war between the natural and the synthetic products, a circum stance that has until now been staved off by one factor or another.
After 14 months of “price-freeze,” the United States has come back into the natural rubber market but this is not expected to help the posi tion much, as the trade believes that US strategic stockpile buying will cease about the middle of this year.
The British Government still main tains control of the consumption of natural rubber—rather oddly in the circumstances, comments New Com monwealth—but even if demand were permitted to take full charge of the situation, the natural industry would not be much better off because it cannot compete with synthetic in any price war. Synthetic is kept at 13 US cents per lb. below world price for natural rubber.
The American synthetic industry
has none of the problems of British Commonwealth producers in Malaya where banditry has forced the price of production up. And anew and important rival in the natural field is Indonesia where currency revalua tion and increased production has aided that country’s rubber industry.
American production of synthetic rubber is expected to be 900,000 tons in 1952, about a third greater than in 1951, but although consumption of rubber is increasing in the US, the consumption of natural rubber is not expected to expand. This, says New Commonwealth, must cast gloom over Malaya and the Sterling area generally.
Although rubber plays only a small part on the overall economy of the Pacific Islands, it is important in
Papua where it is the most valuable export. All of Papua’s rubber goes to Australia but past history has shown that in slump periods it has never been able to compete in price with Malayan rubber unless bolstered by Government levies or taxes. If the future for Malayan rubber is gloomy, then the future for Papuan rubber is in a similar sad state.
How rubber prices have slumped from the peak prices of about 16 months ago, is shown in Londort quotations in November 1950 of about A83d per lb, and in the quota tions of April 1952, when prices were down to A40fd per lb. (In Brisbane, in May, Colonel Murray, P-NG Administrator, ad vocated an Australian guaranteed price for Papuan rubber. He said
that if this were done. Papuan production would speed ahead. Unfortunately, the Australian economy can no longer afford the luxury of artificially maintained prices. Australians are told every day by someone that P-NG could supply all tropical needs, but John Citizen, who is still taking a hiding from inflated
prices, is not going to be interested, if he has to pay more for the privi lege of buying NG-grown. P-NG probably could in time supply all Australia’s tropical requirements, but a qualification should be added to all these statements:— if the Terri tory can produce them at world prices).