Business and Development

Ng Tea Is 'Making It'

In London

From KEN McGREGOR, in London In its first 18 months at the London auction rooms of Plantation House, high grade tea from the New Guinea Highlands has more than held its own against the world’s premier crops. Of the 20-odd tea exporting countries, New Guinea now ranks sixth in quality, behind the more ex perienced and better known African and Asian producers.

Quantity, of course, is a different story, and NG’s output, for several years, will be insignificant in world trade.

In the average prices obtained in London auctions, from January 1, to December 1, 1970, Tanzania and Kenya ranked first with over 53 pence per pound; Uganda was third, with 51.68 d, Ceylon fourth with 51.02 d, India fifth, with 50.77 d.

NG’s average was 47.13 d, above Malawi and Mozambique.

A typical sale, on December 9, included about 200 chests (88 lb per chest), of NG tea, to numerous brokers. They sold in five grades, and prices were 47d, 49d, 44id, 50d and 52d. This particular sale all came from crops grown at the W. R.

Carpenter plantation, Kudjip, Mr. Richard Bradshaw, a broker representing all NG teas, told me response to NG teas had been “very good”. Sales had been made to brokers for clients in the UK, Holland, West Germany, Canada, the US and Italy. NG teas, he said, had been separated into several grades, including Broken Orange Pekoe (BOP), Broken Orange Pekoe I (BOPI), Broken Orange Pekoe Fannings (BOPF) —fine, and “Dust” (very fine).

Highest prices so far realised for NG teas in London were 57id

Bopi; 49Id Bop; 60D Bopf; 58D

Orange Fanning; and 58d “Dust”.

Lowest prices were: 37id BOPI; 33d BOP; 40d BOPF; 44d OF; and 22d “Dust”.

Prices last year, Mr. Bradshaw said, had been higher than ’69 because of world under-supply.

Prospects for early this year were “slightly upwards”.

Brokers for NG are introducing their teas in small lots to keep the NG name occurring regularly in small and big sales. They feel this is the way to introduce a new product.

It’s felt in London that the December New Delhi meeting of the UN Food and Agriculture Organisation, which decided to limit world tea exports and secure better prices, will not affect NG tea, which is doing well anyway.

Under control of Australia, which doesn’t export tea, NG has no tea quota. And as its production will remain insignificant by world output standards, it’s unlikely a NG quota will arise, especially if Australia takes a big proportion of NG ex ports.

Independence for NG could how ever, alter this thinking. The NG Government would then have to negotiate for itself. Not that it would have to abide by FAO guidelines—it could follow Kenya’s lead. Kenya has indicated it will not adhere to the FAO decision to maintain the present world quota level of 1970 at 1,311 million pounds, this year. It indicated it would produce and sell as much tea as it could.

Hopes are Kenya will rescind this decision, and, when the consultative committee of the FAO reconvenes, probably this November, this import ant producer, with conditions similar to NG, will sign the first-ever inter national agreement in tea prices and production.

Growers at Banz, Hagen and in the Wahgi Valley, however, can mean while sleep easy; as their production is too small to warrant any action against it.

Steamies confident

about the future

Steamships Trading Co. Ltd. is still trying to correct the wrong impres

sion drawn from its comments in its latest annual report that the com pany’s “future expansion . . . within Papua-New Guinea will of necessity be more limited than the opportuni ties available”.

Steamies’ chairman, Mr. H. D.

Underwood, was very annoyed in deed when this comment, and an other that the company would be looking for opportunities outside the territory, were headlined as “STC cools on our prospects” in the local Press. An editorial making Steamies look like harbingers of gloom didn’t help, either.

What the company was trying to point out, but failed to make clear, was that there was an obvious re luctance by outside investors to finance projects in the territory on a satisfactory long term basis, and this was why expansion would be more limited.

As explained since, the company itself hasn’t lost confidence; some of its backers aren’t enthusiastic for long term P-NG investment, so if the company is to continue expand ing to its capacity it would have to look at outside opportunities. None could be named just now.

In the territory, within the bounds of available finance, Steamies cur rently is nearing completion of a $lOO,OOO revamping of its store at Goroka; a $200,000 new store at Madang is building, and design is well advanced for a store at Mt.

Hagen.

The company isn’t the only one having trouble in attracting money; the government is also getting a poor response to its calls for public money lately.

Emperor Mines won't

close down

In Fiji early in December, the youthful new chairman of Emperor Mines Ltd., Mr. J. L. Reid, assured Vatukoula’s 1,700 mineworkers that their jobs were safe.

He said the new board of directors, which took control at the annual meeting of Emperor Mines in Melbourne in November (PIM, Dec., p. 107), would not close the gold mines. Nor were there plans to reduce the work force, 32-year-old Mr. Reid said.

Emperor Mines is the parent com

pany of Emperor Gold Mining Co.

Ltd., whose mining operations have been substantially subsidised by the Fiji Government in recent years.

Mr. Reid, an Auckland share broker, said the new board believed that the price of gold would rise.

“Our policy is that until the price of gold rises, we don’t think we can do much more than get Emperor Mines to break even,” he said.

Mr. Reid said little about the company’s plans for diversification— or its negotiations with the Fiji Government for further financial help, which have been going on for some months.

The question of subsidising the mines is one which brings cries of

“Nationalise! Nationalise!” from the Opposition. The government is some where between the devil and the deep sea, when c °mes to a choice of letting the mine die, or carrying it at great cost.

The company had a group loss for 1970 of $47,988. The first Fiji Government subsidy was made in 1958—51 million to be spread over three years. In 1967, government gave the company $2 million, to be spread over three years, Despite previous assurances to the contrary, it was reported from Suva in late December that over a hundred Vatukoula mineworkers would be given “extended leave” without pay from early January to March.

Assistant secretary of the Fiji Mine workers Union, Mr. Navitalai Raqina, said it was due to the company’s critical financial position.

At Vatukoula, in fact, there seemed little disappointment. Many of the younger people seemed happy they had received leave pay and could take a long holiday.

Finance Minister Barrett said, however, government was still looking at the question of financial subsidy to keep mines open. He said the question of subsidy had generated a lot of heat in the past, but denied it was just a matter of subsidising a foreign company.

New Caledonia's

record budget

The New Caledonian budget for 1971 is now a record 7,136 million francs CFP (1A63 million). It was debated by the Territorial Assembly in December.

Main expenditure is on adminis tration (salaries, etc.)—s36 million.

Municipal councils have been allo cated over $l2 million, while the investment sector (public works, etc.) accounts for $l4 million.

Since there is no personal income tax in New Caledonia, total expected revenue of $63 million will be de rived mainly from import and ex port tax. Import tax is expected to bring in $27 million; export tax (on nickel ore and metal) about $lB million.

December copra

report

General manager of the P-NG Copra Marketing Board, Mr. K. G.

Oliver, reported in Port Moresby on December 21: The prices offered for oilseeds and oils in the markets of the world generally continued firm during the first half of December although there was some slight weakening in buyers’ bids for the laurics. The main feature of the markets was the continued good rises for ground nuts and groundnut oil, with the markets reacting favourably upon receipt of disappointing reports of the Nigerian crop situation. Sun flower seed oil prices continued to advance on European markets as dealers hastened to remedy short coverings.

Easier conditions on the Chicago markets brought cheaper quotations for soyabeans and buyers were en couraged to take additional ship ments. Soyabean oil was also in fluenced by the Chicago market and prices in Europe were easier, although latterly a steadier tendency developed.