CUT TO 60 PER CENT.

Evening Post, Volume CXXV, Issue 21, 26 January 1938, Page 14

CUT TO 60 PER CENT.

RUBBER PRODUCTION

QUOTA FOR APRIL-JUNE

(By Telegraph—Press Assu.—Copyright.)

(Received January 26, 11 a.m.) LONDON, January 25.

The International Rubber Regulation Committee has fulfilled the market's best expectations and cut the quota for the second quarter of 1938 to 60 p=r cent, of the basic quota. The market has long considered that a drastic cut was essential in view of the. mounting total of world stocks and the unsatisfactory level of prices It is believed that a limit of 60 per cent, of the quota will not mean a dangerous rise in prices, but should definitely help to maintain rubber at a remunerative level. The cutting of the rubber quota to 60 per cent, represents a reduction of 30 per cent., the quota being 70 per cent, for the first six months of last year, 85 per cent, for the third quarter, and 90 per cent, for the last quarter of 1937 and the first quarter of 1938. The International Rubber Regulation Committee was set up at the end of April, 1934, and its first duty was to co-ordinate the statistics of output, consumption, and stocks. The committee issues a monthly bulletin which forms the basis of decisions controlling the output from plantations. When it was constituted the committee declared its intention to reduce the world stocks to a reasonable quantity and to maintain the price as far as possible to afford a reasonable profit to efficiently-managed plantations. Each year the likely demand, together with the stocks in hand, is taken into account, and the percentage of the basic quota to be released during each quarter is fixed. Also to be taken into consideration are the likely unregulated supplies from Africa, South America, and other countries not under the scope of the Internationa] Committee. STOCKS INCREASED. Commenting on the committee's decision last September to leave the quota at 90 per cent, for the first quarter of this year, "The Times" said: "The committee's efforts to increase stocks by a sharp increase in the quota have proved successful in spite of the doubts expressed in some quarters earlier in the year of the ability of the producing countries to increase their output to the necessary extent. Rubber has 'alien back to a price which no longer threatens to interfere with consumption, but at the same time gives a satisfactory margin of profit to producers having regard to the larger output now permitted. Therefore there was little reason to look for a change, though some producing authorities consider it possible that, in view of the prevailing uncertainties regarding the course of American consumption and the increase of 36,750 tons in the basic quota next year, the next change' in the quota may be downwards. "The latest rubber statistics avail- ■ able show that rubber stocks outside ■ the regulated areas and afloat rose from the low point of 374,406 tons reached last May to 396,446 tons in August, while shipments from producing countries for the first seven months of the present year amounted . to 628,958 tons, as against 475,025 for J the corresponding period of last year." ' YEAR'S PRICES. , The course of the rubber market < during the past year is indicated by 1 the following figures giving the price 1 in pence per pound for Para rubber ; and plantation smoked ribbed sheet at the beginning of each month:—/ Para. Plantation. 1937. .'■ <l. 0. January H 10% February 14 10% March lUi 111-32 • April 12 13 ID-IB May 11 Vi HI June .' 11 !l% July ■ 10 ltl.l-.16 ■'■ August 9V* , ■ ,'■' 1-16 •• September 91/* !l]-lii October 9',i 8 9-16 • t November X 7 Vi December 7H- 7% . 1938. January, ''A ' f In January, 193U, both descriptions were quoted at 7d per 11). ■