RUBBER OUTLOOK

Evening Post, Volume CXL, Issue 79, 1 October 1945, Page 8

RUBBER OUTLOOK

POSITION IN MALAYA

BETTER THAN EXPECTED

P.A. . %/^, AUCKLAND. This Day. The whole picture of Malaya as-: a rubber producing industry is a great deal better than might have been expected, writes C. W. McMillan, Auckland "Star" reporter in Singapore. ■It appears that the Japanese did not tap the vast majority of the estates, which, from an agricultural point of view,-are in better condition than when. the Europeans left in 1941, and 1942. Most of the estates are showing luxuriant growth -of cover plants or weeds, which have prevented erosion while they were neglected, and there' are many .fields of healthy, vigorous trees which only require thinning out to become first-class properties. The production of rubber can start as soon as materials are available and labour assembled. Rubber and tin mining are the backbone of Malaya. The rubber industry has had many ups and downs. The price of raw rubber has ranged from 15s a pound down to 3d. During and, after the Great War the average price was about 2s Od, but in 1922 stocks increased enormously and prices fell. THE SCHEME THAT FAILED. The situation became so serious that in March, 1924, the British introduced the Stevenson restriction scheme. The scheme, however, was doomed -to failure from the beginning, because other nations such as the Dutch, French, and Siamese remained outside it and were able to take advantage of the high prices brought about by Britain's voluntary restriction. It led to further large areas being planted in the Netherlands East Indies, and for this reason the scheme was abandoned early in 1928. From then until June, 1934, there was no restriction on plant-, ing or production, and rubber was" obviously being over-produced. Considerable stocks mounted up in London and New York. Then steps were .taken to get rubber growers and manufacturers throughout the world to collaborate. Owing to unlimited marketrigging and speculation the price of raw rubber fluctuated so greatly thai manufacturers found it extremely difficult to arrive at any forward estimate and were as keen, therefore, as the growers to arrive at some solution. INTERNATIONAL AGREEMENT. Conferences were held, and the outcome was the framing of an international rubber regulation agreement. The signatories to this agreement were the Governments of Britain, the Netherlands Indies, French Indo-China, and Siam, from which 95 per cent, of the world's raw rubber is obtained. With the exception of French IndoChina, the countries concerned agreed to ban all further increase of planted acreage. French Indo-China came in on condition that she undertook to plant only sufficient for the domesticneeds of France. A fund was formed by an assessment imposed on all rub- ' ber exported from the producing countries, and with this money' excess stocks of rubber were taken over and held in what was known as.a buffer pool, controlled by the International Rubber Regulation Committee. The possible productivity of all the estates within the territories concerned was assessed, and upon this assessment was based an export quota granted to each of the signatory producing territories. Enactments were framed in each of the territories and departments to control exports of rubber were inaugurated. For this purpose the properties were divided into three types—small holdings, from -|-acre to 25 acres; medium holdings, from 25 to 100 acres; and large holdings, from 100 acres upwards. The large holdings had'their possible productivity assessment based upon past years; where these were not available, or where they were considered' unreliable, an assessment was worked out by experts. -'■;:":... EXPORT CONTROL SYSTEM.' Each large holding, had an: export ledger account opened up with the Customs authorities in-place of export, and these accounts were credited quarterly with the amount the estate was permitted to export. Small and medium holdings, which usually did. not export but sold, directly to' local rubber dealers, received export coupons in proportion to his assessment and restricted quota for that quarter. The holder traded his rubber covered by these coupons to local dealers, who in turn, handed in the coupons in bulk to the rubber regulation office and received credit in their ledger account at the Customs for the equivalent amount of coupons. This control of exports was working very smoothly in all the countries concerned. It was never designed to boost up the price for profiteering by the rubber growers. On the contrary, it was designed to Dlace the rubber industry on a secure "footing and to enable economically-run and well-managed estates to return a reasonable profit to their shareholders. The price agreed to by the. International Rubber Regulation Committee, which consisted of representatives of both the producers and the consumers, was 9d a lb, which was considered to be the lowest economic price on which estates could normally be expected to - Work.

All the growers to whom I have spoken are desirous ; of the machinery of the committee being kept extant, to obviate any recurrence of slumps and uneasy price fluctuations.