16 



THE CUBA REVIEW 



Excellent Prospects for 1923 Lumber 

 Trade 



Stocks of rough and also of dressed 

 lumber in Cuba are reported by all dealers 

 to be exceptionally low. Some dealers 

 have not more than three weeks' supply 

 on hand while others have as much as 

 eight weeks' supply of certain sizes. Stocks 

 in hands of local distributers throughout 

 the island are also universally low. This 

 situation may be attributed in general to 

 high interest rates which prevail here, and 

 to the restricted financial capacity of lum- 

 ber dealers in Cuba, which results from 

 the general financial collapse of 1920 to 

 1921. It is also in part attributable to 

 the considerable quantity of unfilled orders 

 placed in the United States during the 

 past few months. 



Building Activity Continued 



While prosperous conditions are rapidly 

 returning in Cuba, local dealers are not 

 in a financial position to carry large stocks 

 at present and are therefore doing only 

 a hand-to-mouth business. When the 

 present sugar-grinding season nears its 

 close next summer, it may be expected 

 that there will be heavy purchases of lum- 

 ber by sugar mills for new construction 

 and repair work — activities which have 

 been virtually suspended during the past 

 two years. Furthermore, building activity 

 is continuing, and a number of important 

 new building contracts will probably be 

 closed during the course of the next two 

 or three months. 



It is reported that shipments of Cana- 

 dian white pine and Canadian spruce have 

 been exceedingly light recently, and that 

 no heavy shipments are expected in the 

 near future. 



Effects of Financial Crisis Reflected 

 IN Lumber Trade 



The effects of the financial crisis of 

 1920-21 are still apparent in the lumber 

 trade here. American exporters are in 

 many cases reluctant to finance shipments 

 upon the terms which the distributing trade 

 in Cuba requires. The latter need and 

 expect about 60 days' credit in order to 

 make their turnover before account falls 

 due. This means almost always 90 days 



from date of shipment from the United 

 States. Interest rates in Cuba are so high 

 (9 to 11 per cent) that it is almost out 

 of the question to discount acceptances in 

 this market without losing most of the 

 profits on the transaction. American ex- 

 porters, therefore, have to rely upon their 

 own or their banks' resources in order to 

 finance shipments upon terms required by 

 the local trade. Sales on terms of docu- 

 ments against payment or acceptance still 

 seem to be generally distrusted, and would 

 be particularly distrusted in case the prices 

 of lumber should take a downward trend. 

 If some suitable way could be found to 

 arbitrate differences over quality of lumber 

 sold on this basis (such, for instance, as 

 exists in the United States), it is likely 

 that sales to Cuba would go forward much 

 more smoothly. In order to meet this 

 particular difiiculty, one important Amer- 

 ican lumber export company is planning 

 to establish its own yard in Cuba where 

 purchasers can inspect their lumber before 

 concluding contract. 



Qualities Required by Market 



The principal qualities required by this 

 market are No. 2 common, merchantable, 

 and square edge and sound. Cooperage 

 stocks are reported to be very low. Al- 

 most no veneer or plywood is used in 

 Cuba. Railroad ties are usually imported 

 direct by the railways themselves and 

 practically no stocks are carried by local 

 dealers. It is reported that the United 

 Railways has a considerable supply of ties 

 on hand at Habana. A large portion of 

 the railway ties used in Cuba is of domestic 

 origin. Lumber dealers do not carry any 

 appreciable quantity of box shocks in 

 stock; and the principal users, shippers of 

 citrus fruits, are buying from the American 

 exporters direct or through local commis- 

 sion agents. 



In 1922, the United States exported to 

 Cuba 21,046 railway ties, against 51,209 

 ties in 1921; Douglas fir lumber, 4,040,000 

 feet in 1922 against 2,486,000 feet in 1921; 

 southern yellow pine lumber, 83,590,000 

 feet in 1922 against 59,870,000 feet in 

 1921; and staves, 2,590,241 pieces in 1922 

 against 1,633,797 pieces in 1921. — Acting 

 Commercial Attache Paul L. Edwards, 

 Habana. 



