The international committee for the regulation of export of crude rubber are thus faced with the same problem with which they were confronted in November last, when they took what was thought at the time the quite drastic course of reducing exports from 90 to 70 per cent. In the meantime stocks have continued to rise while consumption has declined and the hoped-for recovery in the price has not materialized.
Failing a very marked improvement in the demand for rubber, of which there is no present sign, all the committee can do is to make a further cut in the export allowance. The malady has become so acute that major operation seems the only hope. Supplies must be reduced to 66 per cent. or even less if the situation remains as at present.
What some of the market people are hoping is that the committee at their next meeting a week hence will not be content with a perfunetory statement that "the matter is receiving attention," but will say definitely what their intentions are at the end of the present quarter. An announcement that the quota will be reduced not less than 10 per cent, from April onward would have much in its favour. It cannot possibly do harm and may do much good by clearing the air. The choice between passive acceptance of a lingering make, Last year far too much was made of the necessity for the replertishment of world stocks. The cry was no doubt initiated by the big consuming interests who, by keeping out of the market too long, let in the speculator who ran up the price against them. The regulation authorities yielded to ihe demand, and even before the supply tap was turned on nearly to the limit the price began to drop. The consumer scored heavily and the speculator learned the danger of playing a market that is subject to control, The producing industry is ready and anxious to let manufacturers have all the rubber they want, at a fair pi. That price is 94d. to 10d. per Ib. If they cannot get that figure, whether through over-supply or under-consumption, they are fully entitled to, and wil, curtail supplies until it is forthcoming. The process may be a painful one for them, while it lasts, but it must succeed in the end. The growers are now united and organized and have merely to make full use of their powers to restore a fair degree of prosperity to the industry and to maintain it in that condition.
The latest figures relating to stocks and consumption in America are even worse than was expected. But the conditions in December were far from normal, and the industria] and financial outlook has since improved.
The consumption of rubber in December was down by nearly 5,000 ions on November, which was itself a poor month, the total for December being under 30000 tons. In the previous year the average monthly absorption of rubber in the U.S. was 45,000 tons. The fact that the quantity afloat to America was 18,000 tons less than in November does not help the situation, It merely reflects the reduced demand. For the 12 months, consumption of rubber in the U.S. appears to have been less by some 32,000 tons, while the stocks in that country have risen by about 38,000 tons.
It is understood that the stocks of manufactured rubber goods in the States have been considerably depleted during the last two months, and if that is so it is fair to expect a much better demand for the raw material in the near future.
Text read from the printed page and cleaned; old type leaves the occasional error.