PRODUCE & MARKET REPORTS FROM DAY TO DAY

Evening Post, Volume CV, Issue 5, 7 January 1928, Page 16

PRODUCE & MARKET REPORTS FROM DAY TO DAY

RUBBER POSITION THE PKICE CONTROL EFFECTS OF RESTRICTED OUTPUT "Evening Post," 7th January. The position reached under the Stevenson rubber restriction scheme has directed attention to the difficulties of the rubber planter in Malaya and Ceylon. Stocks of rubber have been steadily rising in London for months past, and, concurrently with the rise in stocks there has been a decline in the price of rubber, notwithstanding the enforcement of the restrii^ion law. ' On 31st October last this law had been in force for live years. In tho quarter before restriction was announced the price of rubber average 7d per Ib. In the first year under restriction the average was Is 3.915 d, in the second Is 1.174, in the third 2s 5.773 d, in the fourth 2a sd, and in the fifth Is 6.436 d- . the five years the average is roundly la[ . or Is 2d more than the average for , tW; iiarter preceding the check put upon itlWCgulated production. But while the restricting areas have got a fair price for the rubber actually produced and sold, they have had to be content with harvesting much smaller crops than if there had liad been no restriction. The price before restriction was below cost of production, and restriction has been of much advantage to the restricting areas, but they have not, like1 non-restrict-ing areas, got full advantage from the higher rates. It is obvious that if the Malaya and Ceylon producers had sold their full production at Is Cd per Jb they would have been better off than if they were selling a restricted crop at Is 9d. But it must not be overlooked that if there were no restriction and the markets were Hooded with unwanted rubber, conditions would be infinitely worse. The Dutch, it is said, are producing full crops, and am getting full advantage of the increased prices due to the Stevenson scheme. This no doubt has affected the position, but responsibility for the recent condition of affairs has also been attributed to defects in tho administration of the Stevenson scheme itself, including smuggling and over-assessment of the 1926 standard of production. ' Advocates of restriction in the production of other primary commodities in order to inflate prices will no doubt find the artificial position which has developed full of interest, while the consumer will realise that the greater the percentage of restriction the higher the £rice must be to compensate for the loss due to that restriction. It is certain that a very difficult position has developed which will have to be dealt with in the near future, unless the capacity for consumption becomes greater than the power to produce.