FINANCIAL NOTES
RUBBER QUOTA SURPRISE THE International Rubber Regulation Committee went further than the market generally anticipated in reducing the quota for the third quarter of 1938 to 45 per cent. At present it stands at 6o per cent., having come down from 90 per cent. (based on a smaller basic tonnage) in the second half of 1937. There is no doubt that the reduction to 45 per cent. will involve serious technical difficulties for the producing estates. They have built up their labour forces to a level sufficient to provide 90 per cent. production ; they are unwilling to disperse the labour force, expensively recruited, and they are being pressed by the Governments in the East not to cut coolie wages further.
Nevertheless, the Committee has been wise in acting drasti- cally : available stocks in Europe and America are bound to go on rising for another two months, and at about 71 months' supply these stocks are already excessive. There is no imme- diate probability of a large expansion of consumption in the United States, which is the largest consumer, so that it is essential that some progress should be made in the latter half of this year with the task of reducing stocks.
Previous page
