84 



THE INDIA RUBBER WORLD 



[November 1, 1918. 



September siiall come from South and Central America indicates 

 that Eastern plantations will suffer owing to their long distance 

 from the world's greatest manufacturing centers of rubber goods. 



Although the maximum prices of first late.x crepe and smoked 

 sheet ribbed have been fixed respectively at 63 and 62 cents per 

 pound by the United States Government, these sorts are being 

 sold in the East at 25 and 24 cents, and in many instances at 

 less than the cost of production. It must not be supposed, how- 

 ever, that merchants and brokers are pocketing the difference of 

 38 cents. Xew York prices of plantation rubber fluctuate greatly, 

 but are considerably below the maximum prices fixed by the 

 Government, and by purchase in the East, American buyers have 

 been able to obtain their raw material at a lower price than Brit- 

 ish manufacturers, despite the fact that Great Britain is the larg- 

 est owner of rubber plantations. This, of course, is largely due 

 to the ocean tonnage which until recently has been available to 

 the United States as against the very restricted amount of Brit- 

 ish tonnage. And it explains the heavy American stocks in fac- 

 tories, warehouses and in transit, which were announced to be 

 83,010 tons as of June 30. With London prices ruling about 24 

 cents higher than those in the East, British manufacturers obliged 

 to purchase their supplies in the London market are placed at a 

 great disadvantage in competition with American firms. 



Geographical position and the relative cost of production in 

 various countries are becoming important factors in establishing 

 the average prices realized by growers. For some time past 

 Ceylon appears to have been the favored country, not only because 

 it is probably the cheapest producing country in the world, but 

 very largely on account of more frequent shipping opportunities 

 for consigning rubber to London. On the whole, Colombo and 

 Singapore seem to have enjoyed slightly higher prices than other 

 Eastern markets, Batavia suffering somewhat owing to its posi- 

 tion and increasing freight difficulties. 



It is natural in the circumstances that opinion in Ceylon 

 .should differ somewhat from that of rubber planters elsewhere. 

 Growers there are doubtful that restricted production in Ceylon 

 is necessary, because American buyers, as usual, will naturally 

 buy in the cheapest market. They say that if the present de- 

 mand for rubber were normal it is doubtful whether the Rubber 

 Growers' Association either could carry out any scheme of re- 

 striction, or would consider it wise to attempt to do so. It 

 would probably decide to let the price find its natural level, with 

 the result that many present sources of supply would immediately 

 cease to exist. 



Ceylon growers point to the fact that whereas it was widely 

 predicted that a drop in price to about 60 cents per pound would 

 completely eliminate Brazilian rubber, yet although the price 

 has often been lower, this long-threatened industry continues to 

 flourish and supply approximately 40,000 tons annually to various 

 markets. It is believed, however, that if the value were to drop 

 below 48 cents, Brazilian producers would be in a bad way. 

 Were this to happen in normal times it would mean that pro- 

 duction had definitely overtaken consumption, which is not the 

 case. Last year the world consumed nearly 240,000 tons of rub- 

 ber, and if the Central Empires and Russia could obtain all the 

 rubber they want, supplies would be short even on the estimate 

 of possible production. The conclusion is therefore plain that 

 notwithstanding the immense consumption of rubber for war 

 purposes, the war has greatly retarded the industry. 



Stocks in Sumatra, Java and Singapore are extremely heavy 

 and there is every indication that more rubber is being produced 

 than can be shipped and consumed under present war condi- 

 tions. Stocks in London and New York are large considering 

 the restrictions. Unless rubber growers as a whole can get 

 together quickly on a policy of restricted output, or the British 

 Government comes to the rescue with such restriction, price 

 fixing, or both, by legislation, little prospect of prices in the 

 East returning lo their normal is to be seen. 



Some activity in tlie forward market for next year and more 

 distant dates has been assumed in certain quarters to indicate 

 that American imports will not be decreased below the 100,000 

 tons basis. The prices offered for long contracts have been 

 around 30 cents per pound, and although many buyers appear 

 ready to close at that figure, few growers have availed them- 

 selves of the opportunity. It is noticeable that many of these 

 would-be buyers desire to arrange for a considerable period of 

 storage, and the suggestion that the names of all such forward 

 buyers be scrutinized with unusual care is a wise one. While 

 many doubtless take only a speculative interest, present market 

 conditions provide an unparalleled opportunity for enemy firms 

 through their agents to purchase rubber at very near cost of 

 l)roduction and to carry it as long as necessary with little risk 

 of losing anything thereby. 



Viewing the present situation from every angle, and with due 

 regard to the apparent inability of rubber planters as a whole 

 10 take concerted action, and the hesitancy of the British Gov- 

 ernment to intervene, one conclusion stands forth indisputably. 

 It is that the enormous profits of past years' in rubber planting 

 are history, and that the time has come when growers must 

 readjust their ideas of rubber values and school themselves to be 

 content with smaller margins of profit such as are customary 

 in the case of most other tropical products. It remains to be seen 

 if the crisis will result in the establishment of factories for the 

 manufacture of rubber goods in Malaya, Ceylon, India or the 

 Dutch East Indies. If such factories supplied only the require- 

 ments of the Middle East, an immense saving in ocean tonnage 

 would result. 



RUBBER IN UNITED STATES COMMERCE. 



NOTEWORTHY' changes have been caused by the war in rub- 

 ber imports and exports for the fiscal year ended June 30, 

 1918. The year's rubber imports were 389,599,015 pounds, value 

 $202,800,392; the previous year's imports amounted to 333,373,711 

 pounds, value $189,328,674; an increase in weight of 56,225,304 

 pounds, and in value of $13,471,718 in favor of 1918. 



The majority pf the year's imports again came from the Far 

 East (almost entirely plantation rubber), the total weight being 

 311,909,581 pounds, value $168,829,521, as compared with 181,- 

 431,778 pounds, value $104,232,552, in the year ended June 30. 

 The great increase in weight and value, 130,477,803 pounds and 

 $64,596,969, can, to a great extent, be accounted for by the need 

 of avoiditig the submarine zone around Great Britain. The 

 imports from London and Liverpool fell to 21,926,945 pounds, 

 value $12,793,606 from the figures for 1917 (ended June 30 of 

 that year), which were 78,742,217 pounds, value $51,851,269. 



Brazil, largely owing to shipping difficulties, has not done 

 well during the last fiscal year, having sent us only 41,277,914 

 pounds, value $14,307,158, as compared with 56,818,966 pounds, 

 value $25,654,924, the previous year. The figures for the year 

 ended June 30, 1916, were 54,968,227 pounds, value $25,150,493. 



Shipping difficulties also caused imports from Portugal to drop 

 to the very low figures of 538,076 pounds, value $220,133, from 

 3.719,703 pounds, value $1,439,498, for the previous year. Im- 

 ports of jelutong (Pontianak), duty paid, amounted to 9,994,571 

 pounds, value $501,450, from July 1, 1917, to October 31, 1917, 

 while from November 1, 1917, to June 30, 1918, under its classifi- 

 cation as duty free we imported 7,481,292 pounds, having a value 

 of $474,366. Balata imports, which had been much greater in 

 1917 than in 1916, sank for the year ended June 30. 1918, to 

 figures below those for 1916; for the last fiscal year the figures 

 are: 2,449,881 pounds, value $1,278,610. The improvement in the 

 Mexican situation is one of the chief reasons for the very 

 great increase in the 1918 imports of guayule, 4,307,539 pounds, 

 value $1,341,095, as compared with the imports for the year 

 ended June 30, 1917, which were only 2,854,372 pounds value 



