New Mof Copra Price Awaited

Planters Bitterly Critical of London’s Attitude

UP to mid-February, there had been no official announcement from either Australian or New Zealand sources to indicate the 1953 price to be paid for copra, in Papua-New Guinea, Solomons, Western Samoa, and Tonga, under the British Ministry of Food’s 9years contract.

As indicated in January PIM, there has been doubt about the price since early December. Lon don wanted to reduce the 1952 rates by 10 per cent, (and did so, in the British Solomon Islands). The Aus tralian and NZ Governments re sisted this proposal. The unexpected and startling sequel was that the British MOF suggested in January that the whole contract be can celled.

The argument still was in pro gress in early February, with con siderable bitterness being shown by planting interests, who pointed out that the world price has now re covered (the London quotation on January 23 was £9O stg, cif, Euro pean ports) and that for years, because of the devaluation of Ster ling, the South Pacific planters, under the MOF contract, had been paid from £2O to £3O per ton under world parity.

When it was realised, late in January, that the British Ministry of Food officials had taken up the attitude that they would either have a reduction of 10 per cent, in the 1953 price, or seek the cancel lation of the contract, the reaction throughout the South Pacific was unfriendly to Britain. It was recog nised that, in an economic sense, Britain is having a hard struggle for existence; but it was also pointed out that, for three years, Britain had been buying South Pacific copra at a most favourable rate and that she would be taking no risk in continuing the 1952 rates throughout 1953.

Fiji Announcement

It was officially announced in Suva at the end of February that Fiji copra producers would receive, until February 28, the MOF rates for copra paid in 1952. It was stated: “Negotiations with the Ministry of Food are still going on.”

But, in the case of the Solomons, as far as we know, the 1952 price, less 10 per cent., has been paid since January 1.

An announcement is due any day; the present situation cannot go on Some observers in Sydney, in Feb ruary, expected the cancellation of the MOF contract.

P-Ng Stabilisation Fund

So far as the public knows, there has not yet been any sequel to the statement made, two months ago, by the New Guinea Planters’ As sociation, that steps would be taken to contest the legality of the Australian Territories Minister’s decision that the Papua-New Guinea Copra Stabilisation Fund (the total of which is now well over £1.000,000) should be maintained, and not distributed to the pro ducers.

Observers believe that an appeal on legal grounds against the Minister would succeed. But the same people now point out that, if the MOF contract is abandoned, the chief stabilising factor in the South Pacific copra industry will be gone, and it might then be de sirable to continue the New Guinea Fund. Developments in this direc tion should follow quickly after the MOF price is reached.

Analysis of MOF Price

A close student of the world copra markets—his records are much better than ours —takes the PIM to task for this statement in January: “The MOF price to the various (South Pacific) Governments in 1952 was betiveen £59 and £6O Stg. per ton fob (between £73 and £74 Australian).”

He shows that those figures were wrong. The MOF, it appears, paid all the Governments, under the contract, £65 Stg. per ton, fob, in bulk. That is equal to £7l/19/9 Fijian and £79 Australian —which means that the Governments re tained (in Australian currency) be tween £9 and £ll per ton, or £5 per ton more than we calculated.

He also says that the Bank Line carries the copra from the South Pacific to Britain for £lO Stg. per ton; and that £2/10/- Stg. per ton should be allowed for shrinkage.

South Pacific copra therefore costs the MOF £65, plus £lO, plus £2/10/per ton—which is equal to £77/10/- Stg. per ton. Generally, South Pacific copra is equal to FMS.

Therefore, when the FMS price m London goes over £77/10/- per ton, MOF is winning on the South Pacific contracts. When it is under that figure, MOF is losing. Our cor respondent says that, on his re cords, the London market quotation was under £77/10/- from end of February, 1952, until mid-October, 1952; since when it has been above that figure.

That is why the MOF in London wants to cut the 1953 rate by 10 per cent, it was paying slightly

more than world market price for seven or eight months. But, as our correspondent says, during all the rest of the time since the begin ning of the contract—that is, about 21 years—it was getting copra from the SP planters at a price aggregat ing millions of pounds under world parity.

Tongan Producers Complain

From a Special Correspondent

Nukualofa, Jan. 14

PRODUCERS here understand that the MOF current f.o.b price per ton is £Stg.sB/10/or £T73 for every ton of copra shipped in 1953 from Tonga. Local producers are to get the following prices per ton; Sterling Tongan A Grade: £39/-/- or £52/-/- B Grade: £34/10 - or £46/-/- Producers get £l9/10/- Sterling less than f.o.b. value per ton for A grade, and £24 Sterling less for B Grade.

The Tongan Government has been established since 1875, and now has a surplus of over £500,000.

The Tonga Copra Board has a similar amount of surplus funds.

This does not seem fair —the pro ducers should have most of it.

The Copra Board consists of 9 members appointed by the Crown.

Six are Government Officials— namely, the Premier (Chairman), the Treasurer, the Government Secretary, the Senior Agriculture Officer and two District Governors.

Others are the general manager of the Copra Board, and two mem bers only to represent the pro ducers. The composition of the Board is unsatisfactory.

Our local producers quite rightly complain that the Government andl the Copra Board grab far too much., Why should these already well endowed institutions take £2O Stg. per ton from the people who doi nearly all the work?