Silk, slink and sleaze

Press, 13 April 1989, Page 12

Silk, slink and sleaze

From a correspondent in Tokyo for the “Economist”

CURIOUS folk in Yokohama, home of Japan’s Raw Silk Exchange, have begun to wonder whether the high prices of the yarn are more the result of high jinks than high fashion. A group of 24 angry investors has written to the exchange’s boss, Mr Chikao Matsumura, alleging flagrant ramping of the market since late last year by speculators and their political cronies.

Demand for silk has soared. Paid a modest SNZ247O a month, Japan’s young unmarried office ladies invariably live at home, save next to nothing, have their commuting fare paid for them by the firm, buy a SNZ7.4O obento packed lunch — and spend SNZI73O a month on leisure, pleasure and designer clothes. Today’s fad is for silk, and the slinkier, flimsier and pricier the better. Silk is the fabric of choice for

underwear, stockings, shirts, suits, dresses, and even longsleeved furisode kimono worn by unmarried girls on rare occasions and costing SNZ62OO — $NZ12,400 a throw. The price of silk has spun out of control — up from SNZ9O a kilogram in 1987 to more than SNZIBS. Over the past 18 months, the Japan Raw Silk and Sugar Stabilisation Agency has had to break open its bonded warehouses no fewer than 40 times, releasing 90,000 bales (of 60 kilograms apiece) on the market. The intervention price is SNZI3O per kilogram. By the end of February, the agency was down to its last 27,000 bales. Still the price of silk continues to climb. The Fair Trade Commission has started asking embarrassing questions, causing a number of speculators to go running to

friends in high places with requests that the heat to taken off them (old Japanese custom, that). So vigorous had been the political lobbying of late, though, that it has even caught the attention of the busy Tokyo District Public Prosecutor’s Office.

A copy of the letter from the group of 24 — with allegations that the Commodity Exchange Act has been broken — has sent the prosecutor’s men snooping around the silk exchange. One face the government ' sleuths would not mind getting to know again is that of Mr Matsumura, not just the silk exchange’s boss.but until recently a Yokohama City assemblyman. He resigned after allegations about receiving largesse from a company called, yes, Recruit Cosmos.

Copyright — The Economist