SUGGESTED FRAMEWORK FOR PROPOSED ORE 80-49

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP67-00059A000400120003-1
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: November 17, 2016
• Document Release Date: August 2, 2000
• Sequence Number: 3
• Content Type: REPORT

Approved For Release 2000/08/23 67-000-VA000400120003-1 {(Jj}n
VOW . SAW
1, US demand for natural rubber largely determines prices
received by producers.
a. US demands normally account for about 50 percent of the
natural product.
b. No other country or combination of coutries (including
the UK and the USSR) could correct the balance if the
US demand should fall off by more than percent.
2. Future US demand for natural rubber must be to a large extent
determined by US consumption of domestic synthetic rubber.
a. US plants are required by law to produce tons which
must be consumed by US industry.
b. In addition, preferences for synthetic rubber have re-
sulted in larger consumption than was required.
,q. Development of new processes -- notably that of "cold"
rubber -- will' will not; will probably [choose one
or an equivalent) mean a slight; eat; considerable;
vast [choose one or an equivalent increase in the
demand for the synthetic product.
d. The irreducible US demand for natural rubber is about
tons.
(1) Its use in products such as _, , , etc.,
is still necessary despite the development of synthetic;
the resultant demand is for approximately _ tons.
(2) The US stockpile will require tons. (This, however,
is an artificially induced requirement and might be
changed.)
A. It should be noted, however, that increased demand for
rubber in general and natural rubber in particular, re-
sulting from developments such as , , , etc.,
might relieve the pressure brought about by the present
natural-synthetic competition.
Approved For Release 2000/08/23 (AR&DP67-00059A000400120003-1
SUGGESTED FRAMEWORK FOR PROPOSED ORE 50-49
 Approved For Relea~s,.e 2000/08/2 ( P67-000 A000400120003-1
#3. A drop in world rubber prices below about ? per pound
would bring about economic distress in Southeast Asia (but particularly
in Malaya whose economy is almost entirely dependent on rubber and
would cut down dollar exchange received from Malaya by the sterling bloc.
Present rubber prices, though satisfactory and tending to
improve, are still close to the minimum required; hence
it would take very little to tip the balance.
(1) The postwar demand for rubber, unobtainable during
the war, has been sufficient to sustain a price
at about the 1939 level.
(2) The twin dangers of increased production, particularly
in Indonesia; and the competition of US synthetic
make the maintenance of prices questionable.
(3) An economic recession in the US might also bring about
a fall in prices.
b. With the fall of prices, rubber planters (particularly
estate owners) would fail.
c. Widespread unemployment and general instability would follow.
d. Malaya would be unable to furnish the dollars now extremely
important to the sterling bloc.
4, Such economic distress could be; might be; would certainly be;
[choose one or equivalent the means through which the Malayan Com-
munists would come to power.
A. Insurgent Communists have already created an extremely
difficult problem for the British to control.
b. The success of Communism in China and its progress in
French Indochina have given impetus to the Malayan
Communist movement.
.* Contentions 3 and 4 are argued in terms of Malaya alone. There would
be no difficulty, however, in introducing Indonesia as well as the
minor rubber producers into the same framework.
ar"r
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 Approved For Release 2000/08/ f RDP67-0005AO00400120003-1
9
"W 0
c. Even without Communist encouragement there would be great
unrest, difficult for the British to handle.
d. Economic conditions would be such as to furnish precisely
what the Malayan Communists need to assure a victory.
Approved For Release 2000/08/23 : CIA-RDP67-00059AO00400120003-1
 Approved For Release 2000108/2 . -RDP67-OQ.459A000400120003-1
Approved For Release 2000/08/23 : CIA-RDP67-00059AO00400120003-1