SLUMP IN RUBBER

Sun (Auckland), Volume IV, Issue 1076, 13 September 1930, Page 9

SLUMP IN RUBBER

ASIATIC COMPETITION AFFECTS OUTPUT OPTIMISTIC REVIEW British Official Wireless Reed. 11.40 a.m. RUGBY, Friday. Sir Eric Geddes, chairman of the Dunlop Rubber Company, gives his view on the present rubber situation in a circular to shareholders. The Dunlop Company owns nearly 70,000 acres of planted land in Malaya, and the circular declares that the recent fall in the price of rubber to about fourpence a lb will not embarrass the company, since it was producing at that figure, and expected to reduce costs to threepence a pound. Consequently, the Dunlop Company’s board “sees nothing alarming in the decision of the Governments concerned not to restrict production. On the contrary, when normality is reached, prices should, in its opinion, be more stable.” New uses for rubber will be developed with the stability of price, Sir Eric says, and the use of reclaimed rubber will decrease. NATIVE COMPETITORS After referring to the immense increase in native-grown rubber, Sir Eric Geddes says it has been calculated that, as the price of rubber rises to about Sid a lb, there is a growing incentive for the natives to increase tapping in the Dutch East Indies, and to make new plantations. The figure of B£d constitutes a line below which the native production falls off. Native rubber in the Dutch East Indies is locally worth about 3Xd a lb less than the London price, whereas European plantation rubber, being of higher quality, is worth locally only Id less than the London price. With this advantage of better quality, the European planter must endeavour by more efficient organisation and management to produce at a cost which will enable him to compete with the Asiatic grower. This Sir Eric regards as the crux of the problem facing European-owned plantations.