Manawatu Daily Times The World’s Fibre Production

Manawatu Times, Volume LII, Issue 3539, 22 February 1927, Page 6

Manawatu Daily Times The World’s Fibre Production

After a fairly satisfactory twelve months the world’s fibre markets have become very unsettled, sharp declines having made themselves noticeable during the last few months. This particularly applies to Mexican sisal which started to decline towards the middle of December and in its downward course has seriously affected the price of New Zealand hemp, resulting in a drop of 40s to 50s per ton and an exceptionally poor demand. This!, in spite of the, fact that 1926 was a somewhat more active year in the fibre industry than 1925, probably the most active since the after-war depression. It is rather a strange fact, that this almost universal decline in fibre prices has taken place in spite of a world’s decline in production. Figures relating to production and prices are given in the January issue of the “Cordage Trade Journal,” showing that the production of fibre in Manila in 1926 was practically the same as in 1925, which was the smallest output since 1921, and that the production of Mexican sisal shows a reduction of between 175,000 and 200,000 bales. Java and East Africa sisal both show a decline in prices on a decreased output, while Bahama values have been maintained as a result of the scarcity caused by two hurricanes which swept over the islands. Even New Zealand witjh an output of 120,622 bales in 1926 shows a decline of 4,421 bales. The “Cordage Trade Journal” sees the main cause of this worldwide decline in fibre prices in the exceptionally large production and consequently sharp declines in the market values of jute and cotton, which threatened to affect the consumption of hard fibre cordage and so raised serious inter-fibre competitive problems. These problems were apparently aggravated by certain marketing conditions prevailing among of Mexican sisal, causing heavy accumulations and a serious depression in the fibre markets, the reaction making itself fejt throughout the fibre industry. The problems in connection with the marketing of fibre are not dissimilar to those experienced in the marketing of some of our New Zealand primary products. In 1920 the Mexican sisal producers formed a co-operative society for the control and price-fixing- of sisal of that country. Consumers in the United States accepted what they regarded as a challenge, and adopted- a strictly hand-to-mouth policy. Mexican producers accumulated huge stocks, which they found impossible to finance as time went on and eventually-the cooperative society was forced into liquidation. Enormous quantities of sisal were thrown on the markets, prices slumped heavily and many producers were faced with ruination. Apparently not satisfied with this first experience Mexican sisal growers in 1924 formed “the Hemp Producers of Yucatan, Co-opera-tive Society of Limited Responsibility" and in 1926 the whole of the Mexican sisal was sold under the sole control of this organisation. As it was found during the first experiment, that no control of marketing could be effective without some control over production, the Government of Yucatan enacted a law last year providing for a restriction of the production of sisal fibre in that State. Unfortunately, history appears to be repeating itself in connection with the second sisal pool. Heavy accumulations are again taking place, prices are steadily declining and the utmost difficulty is being experienced in finding buyers for hemp arriving in store. Few people realise the importance of the fibre industry and the huge annual output of the various fibre-producing countries. Manila, the most important country of production, shows for the year 1926, an approximate output of 1,254,000 bales. The total output of sisal by Mexico for the year 1925 (the latest figures available) amounted to 757,880 bales, while New Zealand, during 1926 showed the comparatively small total of 120,622 bales. In addition to the above, considerable quantities of sisal come from Java, East Africa and the Bahama Islands. The main consumer-countries are the United States, England, the Continent and Japan. The export of New Zealand fibre is about equally distributed over Great Britain. Australia and America.