68 



THE . INDIA. RUBBER WORLD 



[November 1, 1913. 



Singapore the World's Future Rubber Market. 



By Our Special Correspondent. 



OF Malayan rul)her there will be produced this year fome 

 38,000 tons— 32,000 tons from the Peninsula, and 6,000 

 tons from the rest. Next year, 1914, the Malayan yield 

 may be safely put at 55,000 tons (Ceylon at 18,000) ; for 1915, 

 75,000 tons, rising to 140,000 tons by 1917 or so. This means that 

 from 1914 onwards Singapore will dispose of more than half of 

 the world's supply of rubber. The controlling market for planta- 

 tion rubber will therefore be Singapore, not London. 



I have recently gone into the comparative statistics of ship- 

 ments and markets, and I find that America can now buy rubber 

 much more cheaply in Singapore than in London and ship direct. 

 Assuming the London price for good average smoked sheet to 

 be, say, 2s. 4d. per lb. the costs of buying it in London are roughly 

 as follows, taking 100,000 lbs. as a basis : 



Equivalent 

 in American 

 i s. d. Money. 



1. Handling, delivery on board, wharfage 



and harbor dues, etc., and sundry ex- 

 penses, about Is. 3d. per case, 700 cases 43 15 $212.63 



2. Insurance on 100,000 lbs. @ 2s. 4d.= 



£11,666 13s. 4d. @ -.i per cent 14 12 70.96 



3. Interest on ill,680 @ 4 per cent, for 



30 days 38 18 189.06 



4. Freight on 70 tons cube @, say. 10s. 



per ton 35 170.10 



5. Loss in weight, say, J^ per cent 58 7 283.58 



6. Commission @ 'A per cent 58 7 283.58 



Estimated total of costs, C. I. F. New York. .i248 19 $1,209.92 

 This is equal to .6d. per lb. This is only a rough estimate, but 

 the costs will certainly be J4d. per lb. at present prices. 



The costs of purchase in the open market in Singapore and 

 shipping direct to New York of the same rubber w'ith the London 

 quotation at 2s. 4d. are approximately as follows, taking, say, 

 1,000 piculs (local unit) — 133,333 lbs. — and calculating in Straits 

 dollars (2s. 4d.) the exchange being taken at 2s. 4j^d., the pur- 

 chase price is assumed at $122 per picul, which ^= 91,5 cents 

 (Straits currency) or 2s. 2.1d. per pound. (The factor for con- 

 verting $1 per picul into pence per lb., exchange @ 2s. 4^d., is 

 .2137.) 



1,000 piculs @ $122 = $122,000— the purchase price. 



Straits 

 Currency. 



1. Handling, sorting, repacking, new cases, etc. and 



delivery on board @ Ij/^ cents per lb $2,000.00 



2. Interest @ 6 per cent., for 90 days 1,875.00 



3. Insurance @ H per cent, on $126,000 472.50 



4. Freight @ 70s. ($30) per ton cube of SO feet, 



133,333 lbs. will require about 900 cases = 90 tons 2,70000 



5. Loss in weight, say, 1 per cent, allowed 1.220.00 



6. Commission @ yi per cent 610.00 



Estimated total of costs, C. L F. New York $8,877.50 



This equals 6.65 cents per lb. ($8,877.50 = il,054 7s.) or. 

 roughly, 1.9d. per lb. The landing charges in New York are, 

 ol iirse, not included in either account. 



The difference is at least 1.3d., and may be taken at, roughly, 

 I'Ad. per lb. between purchase in London and purchase in 

 Singapore. This means that rubber purchased here at 2d. per lb. 

 under the London market can be landed in New York at the 

 same price that it costs to purchase this rubber in London, thus 

 saving all the freight, shipping costs and commission, etc., on 

 rubber bought in London. 



This means 2 per cent, on the outlay saved. We, in Singapore, 

 would benefit largely by this also as at present we are not getting 

 more than 2s. per lb. as parity with London at 2s. 4d. owing to 

 the absurd extra charges amounting to about 5 per cent, which 

 are now foisted on us at the London end for absolutely no services 

 rendered. This you have to pay for when ysu buy in London. 



Singapore would be very glad to establish a direct connection 

 with American consumers on a large scale, on a basis of delivery 

 in New York at the London quotation. There are many ad- 

 vantages in this. The consumers would get the rubber direct from 

 the estates without any of the hopeless mixing of breeds that 

 takes place in London. There are fully 1,000 tons of rubber now 

 sold locally per month, mostly speculative purchases for resale. 

 Three hundred to 500 tons per week could be had quite easily in 

 a very short time. Standard samples would have to be kept and 

 any quantity of any sample could be purchased direct in bulk. 



Most estates would prefer to sell here now if there was an 

 assured free market, and we are now organizing a Malaya 

 Rubber Growers' Association here in otder to accomplish this. 

 They would thus get their money at once instead of having to 

 wait two months for it. which is a big consideration for most 

 properties now. with the fall in the price of rubber. The only 

 estates which will continue to sell to London are those whicU 

 are under agreement with London agents to sell through them 

 for a term of years. This will not affect one-quarter of the 

 planted area. tho. and shareholders are beginning to kick at 

 losing 5 per cent, of their revenue for nothing. American. 

 consumers would thus find a great advantage in dealing here 

 direct, especially on a cash basis. 



AM the rubber purchased in London for .'Kmerica is mixed up, 

 and one lot may consist of breaks from Ceylon, Straits, Borneo, 

 and Sumatra, etc., all different climates; and the rubber, altho 

 exact in appearance, will give quite different reactions. By 

 purchase here the consumer would know even the estate every 

 parcel came from. As I have read The Indi.\ Rubber World 

 for some nine years I know a little about the manufacturers' end 

 of the question in America. 



Germany and France are also aiming at direct purchase here 

 in bulk instead of purchase in London. 



The rubber which is at this moment being sold in Singapore is 

 the poorer quality only, as owing to our present subordination 

 to the London market it actually pays to ship the best rubber 

 there still, owing to lack of local buying orders. This would 

 disappear in a week if only estates could be assured of genuine 

 sale to consumers here. In fact if large and regular buying 

 orders were to be sent direct, on agreed standardized samples, 

 further considerable savings could be made in handling, etc. 



Judging from many conversations which I have had witii 

 Americans out here, I gather that knowledge of the details of 

 the Mid-East planting industry is fairly vague and I believe 

 that they should be at once informed in view of the fact that in 

 the future your manufacturers will be drawing the bulk of their 

 supplies from us. 



