Another factor which.has been of material assistance to the working of the scheme is the great increase which has taken place in absorption during the last few years. In 1932. at the depth of the depression, world absorption amounted to about 690,000 tons. in 1936 it amounted to 1,040,000 tons—an increase of over 50 per cent.
During-the two years 1935-36 the exportable percentage averaged only 65. and by the end of 1936 the contraction in supplies and the increase in absorption had together reduced the total stocks outside the regulate ing areas by about 280,000 tons. During 1937 there has been an abrupt incident. rise in the exportable percentage from 75 in the first quarter to 80 in the second, and 90 in the second half of the year. So far the increased percentage has been accompanied by nearly equal increase in the actual crop harvested, although, for various reasons, exports have tended to lag behind their permissible quantities With the increase in the percentage to 90 doubts have been raised as to whether producers will be able or willing to harvest their full- permissible quantities, and these doubts will not be finally dispelled until actual crop and export figures are available, Although some estates are still short Of labour and some may have been Over-assessed, I think it would be a mistake to assume that. during the current year at least, practically the whole of the permissible exports will not be forthcoming. Even if some producers could not export 90 per cent. of their assessment during a whole year very few, if they have sufficient labour, will be unable to produce 80 per cent. during the second half of the year, which for most countries is the best productive period During the early part of the current year there was a rapid decline in stocks, specially in the United Kingdom, brought about partly by shortage of shipping, partly by differential freight rates, partly by building-up of war stocks in certain continental countries and possibly in Japan, and partly by the building-up of stocks of manufactured goods in the United States in anticipation of labour troubles, and this brought about a very firm market, and the price touched 1s 1%d. at the end of March.
Since that time, however, a substantial decline has taken place and the price at present is in the neighbourhood of 10d. per pound. In some quatters there is a tendency to look upon this as being on the high side, but it should not be forgotten that between the first of June, 1934, when the scheme came into force, and May 31, 1937, the average price of standard quality sheet in London has been under 736d. per pound, and the average exportable percentage has been 71, The existing agreement comes to an end on December 31, 1938, and daub! less discussions for its renewal wil! soon be taking place. It is generally agreed that a continuation of the regulation scheme is necessary, for productive capacity during 1938 and the following years will still be much higher than absorption, even if the present rate of increase in absorption be maintained.
The determination of the export quotas for the various countries should not present very great dif-culties as more accurate and more complete data are now available for calculating those quotas. There are. however, the important questions of replanting and new extensions which will require serious consideration.
Under the existing agreement new extensions were forbidden, except 31,000 acres in Siam and a maximum of 20,000 tons for experimental purposes in other countries. But replant ing was permitted up to 20 per cent of ihe area under rubber on June 1, 1934. So far, replanting has been carried out at a rate not only far below that permitted under the agreement, but even below that required to maintain the existing productive capacity.
With percentages under 75 there was room for considerable uprooting without encroaching on the estates' permissible exports, but now that the percentage has increased to 90 the decision to uproot is.a difficult one as no distributable return from the replanted area can be expected for seven or eight years, There can be little doubt that the existing planted area will reach its maximum productive capacity during the next five years, Consurnption may be expected io increase. Uprooting for replanting on a scale large enough to meet the expanding demand might bring about a temporary shortage, Th: question of permitting new extensions under the new agreement therefore, would seem to require careful consideration, Doubtless both the determination of the rate of new extensions and their control would be difficult, but on the other hand the world should have ample supplies of rubber for its needs, and to ensure this some risk will have to be taken.
Text read from the printed page and cleaned; old type leaves the occasional error.