Oils and Fats. 



354 



[June 1907. 



CEYLON COCONUT OIL IN THE AMERICAN MARKET. 

 A prominnent American oil importer describes the situation of the United 

 States market in the " Oil Reporter" as follows :— Covering the question of Ceylon 

 coconut oil, and Cochin coconut oil, it became apparent early last summer that there 

 was more or less truth in the reported shortage of copra. In the past these cables 

 coming from the Far East have always been taken somewhat sceptically by the 

 importing trade and consumers here, but developments showed that in this case 

 there was an actual shortage. The position of the market was not the result of 

 manipulation in the Far East, or in London, but was due to the actual short supply 

 of copra. The soap trade of the United States were the last to accept this position, 

 as they have been for many years accustomed to talons? the bear side of the 

 argument in the purchase of their soap stocks, in the main winning out. This put 

 most of the large manufacturers, and all of the small consumers in a very awkward 

 position in the late fall, when they were compelled to come into the market and buy 

 coconut oil to fill their contracts for soap. Undoubtedly these contracts caused them 

 considerable loss. It became apparent at the turn of the year that most of the 

 manufacturers had re-adjusted their prices for coconut oil soaps to meet the new 

 conditions, from which we do not see any possible chance of release for the next 

 six months. 



One question that will have to be very carefully weighed at the present 

 moment is, have the short interest covered their commitments ? The prices riding 

 during September— December, both inclusive, were very tempting to any importer 

 who cared to take liberties with the market, and what business was done on the 

 short side was probably for November— December or December— February shipments 

 from the East. The extent of these operations is of course, haid to determine, and 

 it would be pure guesswork to hazard an estimate. The parties making the sales are 

 undoubtedly in a position to staud the losses they will have to take when the time 

 comes to declare shipments to their buyers. The feeling generally is that these 

 shorts exist and the quicker they are made good and gotten out of the way, the 

 quicker the atmosphere will clear. Cables received have had a very disturbing 

 effect on the market, by advising of the burning of the lielani Oil Mills in Ceylon. 

 This plant produced fully 20 per cent of the coconut oil shipped from the island of 

 Ceylon. It is quite likely that the owners of this mill lost considerable oil in the 

 fire and that they had contracted to ship oil not yet made, in anticipation of their 

 turning it out from their own mill. Whether or not they will have to go into the 

 open market to fill these contracts depends under the provisions of the contract. 

 They may have sold on the contract providing against contingencies beyond their 

 control, such as strikes, fires etc., in which event they could consider the sales void. 

 This would necessitate the importers here either cancelling their sales for the same 

 reason or going into the open market for the goods. This situation will be a dis- 

 turbing factor in the market for the next ninety days. The most recent quotation 

 received on coconut oils quote the full equivalent of 9£ cents. New York for Ceylon 

 and 9| cents for Cochin, for January-March bills of lading from the East, and the 

 stock available here is about as low as has been seen in many years. 



