ECONOMIC IMPORTANCE OF THE FAR EAST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01012A001700030006-6
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 121
• Document Creation Date: December 23, 2016
• Document Release Date: September 19, 2012
• Sequence Number: 6
• Publication Date: March 14, 1952
• Content Type: MISC

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DOCUMENT NO. Zr
NO CHANGE IN CLASS. 0
ri DECLASS:Fin
CLASS. CHAREi.-J TO: TS S 0I tri,
NEXT 11liViaVi LATE:
AUTH: Ha 18-2 ECONOMIC IMPORTANCE OF THE FAB EAST *
NIEe56
DATE:
VMWERL.0092.56,
esources of the Far East
434751
The Far East is an important source of a large number of strategic and basic
commodities required by the United States and other areas of the Free World0 Twentyc3
five of these commodities were regarded as of sufficient importance to be included
an the attached table titled "Resources of Major Importance of the Far East". Of
these, tin, tungsten, chromite, rutile, rubber, abaca, coconut oil, and evol would
probably represent the most serious losses to the Free World defense potential? The
loss of certain basic food commodities...wheat, rice, dairy products, end meateeerould
be critical to the United Kingdom, South Asia, and other Far East countries. While
no single item deserves to be rated in the highest category of lose, the cumulative
importance of the many commtodities is suoh that the loss of the area, or important
parts of it, would be a severe one to the rest of the Free World0 In the case of
some commodities the seriousness to the Free World of the loss of the surplus producing
areas will vary depending on *letter the total Par East area, or only certain parts,
are lost. This applies particularly in the case of foodstuffs where if the grain
producing areas were lost, but the large cozumming areas remained in the Free World,
the problem to the Free Wcrld would be much different than if the reverse were tree 0
The For East now furnishes over 60 percent of the Free World supply of new tine
Very little increase during the next three years appears possible from the alternative
sources--Bolivia, Belgium Congo, end Nigeria* loss of the Par East would mean drastic
reduction of nonessential uses and withdrawals from stockpiles The Per East supplies
roughly 70 percent of the Free World's supply of rutile,, 30 percent of the twagaten,
and 20 percent of the ohroraite. Dependence on the Far East for these (enamor:atlas can
be lessened during the next few years by further cherelopeent of alternative sources
and substitutes, but at costs in money, labor, equipment, and trancportations Of the
other metals produced in the Far East, nickel, for mhich demands for essential uses
are heavy and inoreasing, is most important, though the Far East is a relatively
minor sources
Even though the Far East supplies nearly 90% of the world's avertable surplus
of natural rubber, it is estimated that loss of the area could be covered from
synthetic production and withdrawals from stockpile for a period of at least five year s0
Australia and New Zealand produce, twoethirds of the world's exportable supply of
wool. There is no adequate alternative seizes reserves are insuffioient, and
es &pan, ou orea, wan, PP 8 as 0&
Indonesia, Australia and New Zealand?
- c.
-S-BrearkaBoll--
PJ:11+
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CONFIDENTIAL"!
Security Information
substitute fibers not wholly satisfactory for all military requirements. No substantial
improvement in the situation except with regard to the reserves can be expected during
the peat few years. The Philippines produce 86 percent of the world's abaca, a hard
fiber which has no fully satisfactory substitute in marine uses. Replacement rather
than substitution to most essential uses from Latin America would require several years
and large US investment. The Per East produces 70 percent of the Ivor/des exportable
supply of coconut oil which has many uses* both industrial and as fOod. There is no
adequate alternative source. Substitutes present a greater problem in Allied
countries than in the US.
South Asia and Far East countries are greatly dependent on Australian wheat and
Southeast Asian rice. The loss of this grain could not, an a practical matter, be
completely replaced by shipments from other grain surplus areas, and great hardship
and some starvation would likely result. On the other hand, the Far East, outside
of Australia and the BurmaelhailandeIndo.China rice area* is a heavily deficit grata
area, and the loss of the whole area would not appreciably increase the drain on
other Free World grain exporters. The United Kingdom obtains over 70 percent of its
butter and cheese -imports and about 50 percent of its meat imports from Australia and
New Zealand, as Well as substantial quantities of wheat from Australia.
In addition to the commodities already mentioned the Far East is the principal
source to the Free World of silk and cinchona bark (source of quinine and quinidine),
both of which have relatively restricted but very important strategic uses.
Japan's importance is contained in her potential to become an arsenal for the
Free World and/Or a basic industrial supplier to Free Asia. At the present time
Japan's output of industrial goods, including machinery, is significant chiefly to
other Par East countries. The fact that no other country in the area is or is likely
to become important industrially in the near future lends emphasis to Japan's potential
importance. Japan's potential, hoaever, hinges on the availability of raw materials.
It is not considered likely that there will be any substantial increase in the
near future in the availability of natural or agriculture resources in the Far Rest
area. Generally speaking, the loss of the metals and other natural resources would be
most serious to the US and the more industrialized Free World nations, whereas the
loos of the agriCultural commodities, except wool and abaci', would be less serious to
the US than to other areas of the Free World,
e 2 -
effefstfk.e-efire'---
bORFIDENTIATT
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-dONFIDENTI/d
Seowity Information
Thelmc?rt...042._0F...1....._sidividual Countries
Individually, countries of the Far ..iast vary considerably in importance. Tho
loss of Indonesia (tin, rubber, bauxite, coconut oil, cinchona bark9 and ?there),
MaIsom (tin, rubber, and coconut oil), Australia and New Zealand (wool, rutile, lead,
zinc, wheat, meat and dairy products), the Philippines (chromite, Eames., coconut oil,
and others), and Japan (silk, tea, but primarily her potential industrial ce,,pacitY)
would be most serious* In the next category of importance would be Thailand (rices
shellac, relatively small amounts of tin, tungsten, and rubber), and south Korea
(chief source of tungsten in the Far East), Of lesser importance are Burma,
Indo.China, New Caledonia, Formosa and other countreso
3
CONFIDENTIA:f
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_
setturity rx0=00=fil0=ti
RESOURC&S OF NAJCR IMPORTANCE IN 11E FAR EAST
Resource ? 9hief Source
Nature& Resources
Tin Far East Total 67.
- Ma illy- (38)
Indonesi (22)
Thailand ( 7)
? Tuzgaten Far East Total
'35(1?)
Burea '( 5)
Thailand ( 6)
Australia ( 9)
rts of Araa 1
A@ of ftaee f awe--
World Prodicti
trio_Ad jm.r..ke
Nickel
Bauxite
Ohroctite
Areas Prij.iily Begfte
Affeje of
narks
Aree
Wr1 flDewlap t of adequatos alter nati
25 Fes Vold
Far East Total
?wrema77ra
( 5)
3
Free World
Far East Total
a
6
(11)
US
F East T tal
-71737-/
19
17
Fres World
ra.TEEITI
( 5)
Philippine@
(X5)
aoma"---TfyirvTrift'
improbabla 1952-54i Am 0=4 COO
plat@
tufficient only for 18 nth a Free World
consumption; RI fully a qua substitute,
South Kama sumo unterteing a too kpil less ?
fdtan e-third k9rap1ete b eqpala 9 rears of
Far Eit tern supply; tab stitutes not ',holly
tis factory; rnative sources
yr
I. able.
EVere WOZ
situ on iscrous but. Far
East supply i araello
masa of high quti1ity9 low of Far East or
uould necessitate rest trtc tockpiling
121' offr
C tgal- Far it riot major s roe this grads; prodnoti
lurgical from altarnati 410 ?UMW say increased; eti4a-
pi1ing about 5,5% objective.
B-Refrac- Philippinea a major sourc of high quality
ry chroveiteg sit native so @ quat g US
si ,(4pille relatively lov end rerpreeents only
bout 17 months ' hiiiippine output.
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0-te=u-Irtte="
IiiSmation
Rutile
Chia f Sources
Far East T
AILW
NM-58
RESOURCES OF MAJOR IMAM TIM E IN FAR EAST
(continued)
Not EPbts of Area 1
As f Au o e
Wear24,Agporte 11.9,1142.
*MP
Area s Degrett2
Remarks
glate#11_1211_, 'as of lo
Sx actantited 141i-mre5it. Trete World utput
ep
Free W ld
Fax East Tata 16
Australia (16) . 9 Reea World
Japan (nsEI-)
Far Rest Total 99 $5,10 DS-.UK
(99)
Cadmium Far Ea t ToWl. 14
i?ir-asstMir-1 (13)
Japan ( I)
Petroleum Far East Total 0) y
(1):
1392rDig? (1)
Rubber Far East Total 89 l#,,/
-1127jr? -(36)
Indonesia (h7)
Thailand (6)
Far East T? al
Indo-China
noao
UK
Other Far Riadt.
FliNte World
Froe Weld
? 5 -
S-E- E- T
Alternative eources cautd replace Far East
but would delay fulffillreerst stockpile g
objective nag 80A
High ants up ti on rate at tici p atedg alter rtati ve
sources currently Int operating but could be
revived; stitutes only partly satisfactoryg
TtOaetcApi
195245 dinzardi mob 17 cen be mot frv
alter 'Wye sources:,
ar East deficit Tea,
Synthetic production woubi have 1,0 b stepped
Syntleti a not satiefectors-7 for all ueesg
stockpile fairly g?(
1
No adeup ate atbtutes in Boma uses., Apot,
25% f con saapti n consider% d e title
military use, Stockpile) dna Bo% complete:,
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securi Informati
Resource
Chief Sources
Agriculture Re soueces
4...1.12?17-1.7a
Abace
Appar 2 Wool
Copra & ?
Coconut Oil
R156
Wheat
Philippines
Nit.56
RESCDRCES OF MAJCR IMPORTANCE IN FAR EAST
(continued)
Net EN to of Area
rir-cal?Fros As of roe Armee primarily Degree
World ILs World Productio Affects_ (loss of Loss
Fag, Eget Total 6
Australia (ia)
New Z land (20)
70 lir
Free World C M t substitutes lack strength and durability for
twirls uses but aro satisfactory for many other
WintS ,) Alternative sourc a (Latin AmeriCa) being
expended but large scale imam would require
several years snd heavy US investment, Stockpile
goga OVOr 60% sat end represents 7 months of
Philippine supplyo .
Free W No &torts eve same for quantity which might
lostg stabstitutes n t setts factoryg
heavy militaty requires* slag authorised US war
reserves rag be filled yid-/952 but onl,Y
equal to slightly ov le% of Fa EV E annual
expor ts,
Far Eget Vaal 70 . 55-60 Ikea W,rid c Substitutes available. in US for maw 1.1...ortant
--11i53?,ress (47) tv?-cs though mt ail g US kpilc s than 10%
Malaya (12) of Far &atone annual asp rtsg used 6.5 edible
Indonesia (lh) il in Europa eliddifficult of replacement -
except from dollar source o
Far East T tal 38 6/ 2 y Other Far C Not signific milt Ron& to Fee Et arid South
lriorra----- (32) East and Asia but h ighly important the re i doubtful ? in
Thaila (32) South Asia acticep if Pfte World cedld cr weal r lace
Indo.China (3) 102 8,-
Far Ea t Total
WasTR isr7-1
Ciralai61 Bark %do:meals
(Quin) o quisidine)
O y 0 Uttv Far Est.. C. Far East other than Australia dais it aboiit to
(13) & South Asia extent Austral i..:0 a surpluag ser Low loss to
South Asia; create additional dollar problems
fer UK .
67 6045 Frao World 0 Substitutes for quinine atisfactcryg no
aatisfacticry sub agitate DO qu in Wile btu t
stockpile (inclo quinine) goodg alternative
- 6 - , =woes can be increasod,,
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PAt
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Sootiertilicuart tan
R.BSOURCES OF MAJCit IMPORTANCS EV FR DST
(..conttntod)
Er Eavwto of Aatal --
MrarIM AoItMAmu Peigio1C4' //woo .,2/
Ohio f U.......Te ral LiEld !Production ittfaatt?L ct EkvEig
imiwomaxcavar.veaaem.01...141?1111111....01?Mowamosaluma wan
Silk Far Haat Total Th 9/
jay= (77)
Dairy' Produett 8c Pao P;aot Total
Wait, (23) ?
Ana traits (14)
mtaus coa Far East Total 27
' megfa , (9)
Mad: Popps r Fax &tat Tata 20
"Ta?riria--= (27)
Pogyeooat 00
J
Sugar
"14
Far asat
Jap
Pao Neat Total
Auatralla
Philippinea ?
ad/Istria% RosouegQ,o
t?East Total 01,41
Jepeit 811,44,?,
kustrolial (0)
1111,:e6
rar,a
WOglit
FIroa World
Fro,
nag.i., if aracg Othar Far Ewa
7 -
rk
.Wy ugeo for; %thigh no adaquaylte aub tattuto
ie gun bakag aUtitspilo t mt. '4?1stO.
far thia pow not inadaqua'44 %lough ?
ingraasitam
1t itis g@argcg nekt, uatia7
faoltd6ry e pre.ftzttt
Sfitart oar to Uc?. but alleaaanta
over TO% Natio? and geni paPta and
alnioat f sat? 1 aparta o f *at on irlitry
aarigua probla iga replaosati,'
Stitt? to tbq .eztt tor
ind trios a a r atia factrer lc,' 5 a@
?
an edible oil Make t?
Igo mai @taw ,or y f.nt Urn& ire
sourese not ad quatat 1s,11 dg
impir too* ofc mo ty zzatod 1@ae
Altairigkti. 54P1050 SOWslat4iwoluld tUl
dontad parti 11 at Itiglue pei000
gabotitut@ boventge eadet
Altx.-nativa MVO@ can taititand prodaotiang
Wear andFar Seat moat A! ftial4eii,: ?
Japan haa Potimatiat Nog prodtt ea about
world maohinary (mtput %Minh cauld
19518, Austirall law to 27 tiga@
tidlug, mlutaliz,w ac it
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S.E-C ait-Fe.T
Security Information
Foolzotee
k These percentages are based on 1950 export and production figures unless
otherwise indicated,
I/ The degree of loss of each cormiodity has been rated in the approximate
order of importance by the letters AD Be Ca D and ED It should be emphasised
that because of the many variables involved the application of these ratings
necessarily involves a large degree of judgment based upon our appraisal of
the current situation?
A -,Reduction in defense and essential civilian consumption =avoidable.
B e Impact on defense and essential civilian consumption could be avoided
only by drastic reduction of nonessential civilian a oasumption and
by withdrawal from stockpile if aNyo
C e Defense and essential civilian consumption could be maintained only
? by reducing significently either nonessential civilian conineaption
or etockpiles& if anyo
D Maintenance of scheduled defense and essential civilian consumption
would require moderate rationing& moderate stockpile reduction& or
slowing down scheduled increase of stockpile?
E Relatively minor econemio adjustments could oompa.nsate for the loss
y Based on estimated availability 19520
y Based on 1951.42 export estimates
.pj Based on 1951,42 production eatimateso Free World production includes
production of synthetic rubber?
2/ Average 1948.500
3/19490
I/ July 1949 eltrave 1950o
Sy Average 1948.400 Raw silk only,
2.2/ Average 1949 and 19500
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SBD:URTIT INFORFATION
N7APAM attizTAIL
Among thn zrore impo.riant tritesgic metals and minerals suppliecl by tbs
Far East to ths: free id.orld are tin, tungsten chromitep benxite, rutilet
oadyithmtv beryir, nickel? lead and zint Only in the case of leaa and 41110
are free world supplies sufficient, asenming the is of the Far Ft s swpa.7
to permIt maintonanse of required consumption leve2s. The li,oes of tl-c
metals and naneral you:1d,, however, have mm-e oerivue repercussionsv and
eenerul could not be comptaa?ted for prior to 1954-55z, The sevP=rity of the
1oss remlits tram the relativA concentration of produotion in the urea lnder
revieu and the diffittmlties of rPpinaemenk from remaining free .14.51ones,
In, terms or free world prfAustion,, the loss of the Far East vould noen4
for example, a, loss of 6% of the free world,s output of tin., 71,1 of its ratile;
and roughll 30% of ite chromite and tunrsteno Far tostern production a other
raetals such as btrur.i.te4 I-Aary14, nickel. and eMalt111,11D Cietkek.Mtki for. a mon smller
share of free wyrld prodtion,. The difficulty in, replaeinr even snail
quinti-ties. of beryl tid ntickei would be cc)iderah1c Lko.lel!,Trif->nt ?..Af' (lite
native supplies ARIuld norosver bz, waited by cont.c3ti1!tg devrinds for 1.3=bol-
equipeents, and trarremrt-Ttion faellitieso
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? S-E-O-R-E-T
SECURITY 11F0RMATI0N
yia,? The Par Eat$ principally Valayay indonesias and Thailand
Croughly in the ratio 6:321) furnishes more than 100 thousand natrie tone
arnr.sjay or over 60 percent of the Free World suppay of ne tia, Alternative
SOUTCOS axe principally 1* livia$: Belgian Congo, and Nigeria vhich produced
about 54 thousand metric totig ih 19510 Very little increase appears prebabas
from those countries in the next three years. Output from other countries.
is negligible*
Consumption in the noncorromist world in 1.950 was l4 thousand
metric tons. Inrect..;4k. ye-als,the excest: of %,orld output over consumption
has been absorbed by the United Statels defente stockpiline. Loss of the
Far Eastern supp/y would prohibit further accretions to the United ?tates
stockpiler necessitate a reduction in Free World consumption say to 100
thousand metric tons and louve o net deficit of about 45 thousand ?metric
tons to be made up from Free World stocks, Such a dafie t would in.the.
course of a feu years) -be extremely serious*
As of DeceMber 31g, 1951?$ the United Sy.at= stratocie etook s were
147 thousand metric tone; od rplus European stocks were beliond to by.
i1'. IndmeIlln and Malajah 3Qii oil oould ty,4. abeeated with mall
effect on th?aountries,of the FrtSn j.orldr, A sotisffintery substitute or Palm.
oil in the, steel, titl? ani te-rne-plate,indur4tries Aprfarutly nov exists thou&
hom oil 10 still pererre?td, 'Irystittites are of wursetivW, for Falm oil.
as an llb prtaxt.v tbm01 the loso of thills?as. ;Ath Gther oils2, would areate
probal, for ,verril Prcolwyt1c...):13 a Pram ail in ATriaa i,vald likely
bo increased sontwhat it hIgher pricAs pr,zmiled,
1/, Alack Fnor 1IA surTiI4 hlac4 pcpper countries of the
Far Dant
:Ni3tlevit#177ir,5n&) Ciam rind rporthd '7,744
metric tr.:ns eyr 31' osreent of wrid exporte nf bleck perqpr in V4'50.
Indonort-, thA no$0," immirtatt soartc, of bincA pw:vtr in t1.; "Par East and
curr6ut4 t!'w seond mst ir4retL14t t tJ riLIr the pxclitar period? 1935-'90
ix;r14. exTArt, cyf nlymt 654,
J tOAR amlnalty, Arlownx...
inately 91 14-Jr71.74. Fitpplt ,.7:z4ens in
Indc-T,ezia verr thf'-s wqr-!;; and aivil mires+, ln postmr years
t2 rr-rl.thabi Utz ti On a
fti. c':.:47 far the Post important of all the spdeeso, and. is imported
'71,'"Pt
sati3f.4e1:or3. substitut 4no yet
fourO, PriCes wrs about forty iirAz as high ae they vere the premnr
.pezloc4 Anacriting a. lArge una,Atafied demmd,
roreLd r,,J.4,:cAnTy IA the Intknesixa. laack popper itdtry offers abo?e. the
o6T for grv,n1.1.1 increased supplies 'within the near Itature. Only a mderate
ir4roi rimi4F-Al.on has ten foreoazt for india the chief. mime of taack
ziv;,:;.nt? Lvmtn14y? certain. 5outh and Central American countries
5. 7 ?
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SIZURITI IITOWAT1011
*my bef,'?ozw impaitant StApaiere of black pepper, or a. autisf..tory aycithc..-Cw,
aubetituto mny b detrelow)d, Wire than hair of .1116 tri,rid.`ds
ti.S.ack pepper la -ortal..mied in the The Par iktst provides ry.,:twiA,111:7
antire wQr,rld'a supply eyt Alite peppar.., which haa about tho
PepPt-irp but, is raOre delica,tely flavelred and more expegolva
12, Tea - The tea aurplua preduciew f the Par
Taivt:r.n1pu Indbehina arid Maar.. Pirrniehed 46!?q58retie tons,j
aerit -.orld tea -,xport s for 195C iiieh tcsita3.1.ec4. 33hnetrie
Textc)nesia.: Is the me.),ai,tiprt.trt teo, Vat' 111C 41:1.
1.1CSt? irtarA scouree Ir. the world,. Ni that tba: f rat: Cu
tiar-zVai 1=1 tIt' therr dor:1434 -Japan,., which exykrteil totta 1.150.i, is ths
only imptetkint avurr.-,ef gzr. tea9 th primi;.v." typ.;uf ttt..";11V0a?'di. TP)rth
Aftlea9 where ;pslitieal repzirmaisionsitep felt he the sv.p..;:liy'a gr,t?en tea
from Chiw uaa eut eff,
The loss of the Par 2,est would reduce someaftat the sqlppliN1
thie Free 11d3, and uouii rEie.s prie,,:i?o and '.ueee,t;s1tate ehmr.i4Ns 1,11ttivns,
A se31.exe tk,s. leat dittease :HlistA?...,)-131i4?:t: rar 1selN1121
imp.ortrAtt
Ut 1Jezurtries,fld d L1 Inereaeq?,
Idt t r OdtrA i4itti 14.11 Jae,:orie 1.15.stzes,,=.;
ehethwi tdr4 16-011?.7
13 i&r-,-, The sltepr tto 1t Yarnooal.0
Australia
th i2ipthe. VJt ,k,M, _Lnr rv!IrfsClt
the worlds cm7gwttl.t.le supoll 5f
L:;:ttr3:0L
1950 frvmth.
or 82 p8Ttent' 1:AZ;Nt tc tb,P, Tha
ehief imptztc,ra vetss r,41.1.-t44,d \fini Ni?ti Zw.lands,
EgyIS, arga kat!. r6e.mePi' or
Tlisf Qi.ithtn, YOYTY.J.6:10. ci2. any 3Cri. MI5
affeCt tne oorI4 r1t for ETugaro
The loan tir? t trr f' kt r.nd .F2.r stc
Inereasul production or vAle!;.).-1,N.-;.,fc.Ls t')f WUCIX
Iv:eduction in ttak Northert. ivere ,nf tvi. a Ivrge
extent offset, tIte ic,as of tile rar ?n 11, 4,4 urIctrxr.:
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0-Z-U-H-B-T
SECURITY INFORMATION
NIE -56.
FAR EAST
Appendix 1 - Abac
Appendix 2 . Apparel Wool
Appendix 3 - Rice
Appendix 4 - Wheat and Wheat Flour
Appendix 5 - Copra and Coconut Oil
Appendix 6 - Cinchona Bark
Appendix 7 - Silk
Appendix 8 - Dairy Products (Butter and Cheese)
Appendix 9 - Meat
Appendix 10 - Palm Oil
Appendix 11 - Black Pepper
Appendix 12
Appendix 13 - Sugar
WashingtonD Do Co
14 March 1952
S-E-C-R-E-T
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Security Information
FAR EAST'
Abaco.
MIAMMOMMISNIP
, Appencliz 1
bigaifiosnoe of the Far East in..Wor.111aRgailL?
The Far East, principally the Philippine Islands, ha a tradition ily
boon the Important supplier of abase to the world market? Indonesia
(an important source of supply prior to World War II) and British Borneo
furnish a very snail amount, the latter country shipping to Great Britain
Produotion he been emphasised in Latin America in reoent years
The Philippines export about 85 percent of the Worldia exportable
'supply .of ahaoa. Central America, which produces about 15 pert or
the total world production of abaca, exportaits crop to. the United -
Statas0 The romaihing 85 percent, or about 80,000 metric tons, was
produced in the Philippine Iolanda, Of the Philippine exports in the
i948-1993 period 14.9 percent went to the United States Allied countries,
notably Japan and the United. Kingdom, imported 47 poroont0 Ninety-six
percent of total exports went to non-Communist countries
United State a Dependence on the Fmr East.
wareaueemnwee......A...Asexpeni...mat .11 awearerwecee memzsl,:.A.mmrstresegar.AVAnnansurk entAtrAvalemsznetan.
In recent years United States import? of abac
from this Far Eaat,
partioularly the Philippine Islands, holv made up about two-thirds of ita
total importa0 The other one-third has come from. the Latin American
countries of Panama, Goleta Rica, Guatemal and Honduras whereg. in the
early 19140 Qs, a project operated by the United Fruit Company under governme t
contr ot was initiated to assure the United States a oloser source of supply?
By 31 Deoember 1.951,, the United States had on hand 61?1 percent (about
50,000 metric tone) of its 81,648-ton stockpile objectile, which is scheduled
for attainment through planned deliveries by 30 no 19530 This stockpile
objective, which was established at the quantity feasible of rotation is
0 percent of the computed stockpile deficit of 2050027 metric tons ? Progress
in stockpiling indicates that the objectives for abaoa will be reached on
the target date?
Abaea production, in Latin America has declined continuously the past
three years with only a relatively small decrease in total area ge0 In 1950
onder Public Law 52), the sun. of 435,000,000 was appropriated to Loorease
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ArAndix
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.Seourity.InformatiOn
ab* a produotioloin th Western bemisph
ree This law provides for the
planting of 50,000 acres of abaca in the W
stern HeMisphere and the ft
of the plantings is mow being made. The acreage will probably be coaled
down to about 43,000 acres as a result of abandoning approximately 6,000
acres of poor land? At an eotimated yield (.3T the Fibers industry Advioory
Committee) of 1,500 pounds of dry fiber per oore about 29,000 metrics tons
oould be produced annually. This figure is 36 pervimt of the average
annual exports of the Philippine IsloA,da for the 1948=-50 peri.d and 16 about
11,000 tome less than Ue So average .nnual imports from the Philippines
for the same periode
Latin American production, supplemented with the accrued stockpile which,
according to present indications, will be completed by the time the new
Plantings come imto productio* would provide the United States with
approximately .47,000 metric tons per year based on the present rotation
rate of about .180144 tons per year (29,000 tons of Latin American production
plus 18,144 tons rotation per year) o Assuming normal growing conditions,
the United States'would have on the basisoof prevent stockpile objeotives
about five years te. further imorease Jabot= plantings to 'bolster supplies
before the stockpile was depleted -- if the Far Eastern supply of abaca
were out off o Furthermore, the Latin American production plow rotation
stooks on a yearly basis would be 60000 t
s above the, annual use planned
by the stockpiling committeeo Assuming the 205,027-tom stockpile deficit
more filled, this amount proportioned out over a 5-year period would
provide 41,000 bona per yoaro Thaw, the Latin American production plus
the amount of abaca in the rotation schedule would for a 5-year period
provide 6,000 tons more per year than was planned by the stockpile
committee. It ialik,ply that during the 5-year period adjuatments suoh
as increased production and loss use of abaca through substitutes, could ,
in
ffeeit aaaist the United States to maintain an adequate supply of absolao
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8E0111.17
?opezetlia wawa:n:0m
Seourity Information
Appeett
qP
A/lied Deendence on the Far 'East
? bx,rdIsamenerWmIEGOOP44.3 LeNnzialf?03?01/15.agmaan IlinalinGVIMPMelaibEiRmenKCITIMM
The United States, allies, composed almost entirely of NATO countries,
import about 45 percent of the total world,a exportable supply of &balsa* The
Allied Rations aro almost entirely daps dent on the Far East tor their supply
'of?abaono
OtherNon-Conmunist Area Dependence on the Far East
wrms.lowiotau,r4.1urnown.eironzts."..efamtwerneerlaauhiLinirearnAtottowsmirdualsiefaraMearneCrarlIrmemzemonstA.
1.ilorage.ummual exports to ether now,,Commublut?ocunt iea saountad to about
.2 pereent of the'worlWo exportable supply of abaci during the 190.5o period,
cation that abaos is not en taportent item iu tho economy of these
countrieso
? The attached table shows average annual exports of abaca cordage and
twine Nr the tbree-yoars 190-5o from the Philippine lulande to the _chief
importing countries .of the world,:
Conclusions
4.0.11.1?XleerPECialen?
At present the loos of the Far Eastern supply of abaes would result in tha
. lose of about two-thirds of tho Unit d States, imports of abaea end about'
85 percent of the Free Worlds supply* Since the war the United States has
annually takenabout half the Philippine abut:. exportao
If the Far Eastern absoa supply were available until after the naa
plautince in LItin America are in full production and the 30 June /953
stockpile objectiTe of 64648 no trio tone is reached, the United Stats ?scold,
under present absoa rotation schedules maintain for the ensuing, 5 years an
aTerage annual .'$upply of about 47,000 tone* This figure is 45 percent of the
slierage annual world production of absca educe the war (2947-51) and is (.-t
percent of the average annual U0 So imports for the sans period() Taken alone,
the anticipated increased Latin American production would be smut 75 percent
of 14 SO average annual imports from. the Philippines*
?Hence, if the Far Eastern abaca supply were lost, the United States would
control the sole supply of tho Free Norld's supply of abase.* 44nos the U. 5,0
All are fully depezdent on the Far Eastern abaca supply, this would eau a
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Appandlx I?
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3 eurity Information
shifting of their dependence to a smaller supply and at the sane time., a
supply from a dollar source.
Abaca, or manila hemp as it is known in trade channels -can be highly refined
in manufacture, is durable and poseesses a high degree of tonsil strength.
These qualities.combined,with its ability to withstand the action of salt
water make it ideal -- and the leading rope fiber-
1111DVIA
for marine manufacture
and WO? Its main noes include marine cordag end nets of all kinds, drilling
cable, rope, wire rope ?enters, pulp for specialty paper, etc. Substitutes
such as sisal, hqiAem nylon and wire could be used for many but not all
ebaca uses Loss of the Far Eastern supply would materially but not completely
reduce imports to the United States and its allies. The Latin American
countries do not now produce sufficient abates to fill this gap. After further
plantings of abeca in Latin Amerioa, much of the Far East abaca losses could
be replao d but without an effective programer utilising substitutes to
replace abaca shortagee, abaca would be in short supply for many years to
Attacireent.
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. Security Information
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Appendix I
IP
44.11.41.1
SECRET
ernmarompttovas...
Seourity Information
5 .
TABLE 10 - FAR EASTr Average Annual Exporia of Abaoa and
Cordage and Taime by the Philippine Iolanda, 194E-1950
9.14,1166019W7MMW01190MIMPVUMIWV.WMPIPM.IIIMMIMMMM
Destination
essessumnerwewate.assersiemsemsorte.reeamartemstiagsv.,,,gorarnowmwroreamino.
a
limited States a000000e0o2
8
UmIted Kingdom s000tpeoo8
Japait000000pe000002
Wep_atern Gormany000000a08
Alliee
eleYWilarlatrrall.V.10
Other HATO Countries e a, a 2
Total Allioe- a- 0 a o 0 o'o 0
Other non-Cfnmuni
0.01.211.1a211031
Sc*utgrieL0 ec00000 2
3
Afrieu a CO 4,0%.01,0000:
A1111624
.111..M1111.41.1.0.214,,,narfeetereeNTAMO.....r....19X=1.49.6n0
Cordage and Tuime
0117,1,a104.1.z.letrnr1nriOns...?.1211Mbill11.991.0.-211914/0?.95.1..1019?1.1.112-airDIrESIVVIren.,..,
-?MOtMAII TOAZ
36,D394
7,886 e ?
t
L4379
20437
11,546
36,248 a
? 2
2-
F6.7 Eaut 0 eo o 0 o omoot 749
Weatern Europe 0 a a 0 a 0 a 0 8 626-
8
r Total Other Hom-Communiet 0 0 z 10375.
3 r
Total non-Communist 0 a a 0 8
Seviat Orbit (China) a (b a
8
Other oaaaae00000000
Total All Exportaa a a 0 a
/ Adjusted to agree with totealo
716017
1,376
7 195
97
.7
. 921
1,213
2p589.
1.07V
999
1
53
669
r 378
gee*smesesalantemysetea.nnamicatasnansmanclarcrturzassaviaatstaenerraornwsvez.sromver.wer
2
760736
StRIP.11126290,1,..07.,...9.00e-SMOVEZIPIZOI
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30689
anescumia
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Append:12c 2
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Security Information
TIM FAR MST
tvarel Wooi
Meill.s_a_nce_Lolhalitj'ast in arldts SupplT.
The apparel wool surplus producing countries of the rarliast
Australia and NerZealand -.export about 66 percent of the ?ridge export,-
able supply of apparel wool? Ara4 annual exports in recent yearn
from these two countries totaled about 360,000 metric tons, clean basis
of which about 200000 tons annually or about 5 rcent sent to other mut-
tries in the Far East. ',le chief importer have been India and Japext, with
Japan alreet entirely dependent upon this area for ita raw material aupp40
7 9 S,-;
World production of apparel wool is about ene-r04,114aa metric tons-
annuallys of wh4 Australia and Nau Zealand together produce about
g (az
9997fto tens, epeeley baslso
14-?11:2,01121E22_212. the ,Far East
The United States must import about tm -thirds of its requirements of
apparel wool.. In the 3year period 1948-50 an average of 41 psisentof
V, S? imports Originated from thia area, Australia is particularly important
as a source of fine wool in demand for both military and civilian use
The, United States is stockpiling wools principally in the form .of fabrics
and and iterso The obXctive is to stockpile d quantity anfficient to icsarEl
9 to 12 monthet supply, or enough to provide lead tine in Which to turnreur
wool on the hoof into fanric and end items.
? There are four 'categories of buying in the procuring of woolen apparel .
goods for military purposess
.(1) W_Emt roNINIim, which coml. t of-end items for immediate lime.'
(2) Itbilisation reserves ,which consist of end items held in readiness for
rapid or sudden inoreases in military pe.sonnel.
(3) Authorized war reserves. This category at present is autharised_dt
45,3 metric tons (1000000,000 lbs.) This amount, almnat ':Ual to
the annual United States wool 'clip, may consist of both raw wool and
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'end items and is considered a large enough supply to provide the industry
time in which to procure wool on the hoof and process it into end items In
case of an emergency, It is anticipated that the entire 45,360 tons will
be delivered by 30 June, 1952. Over 90 percent will be 1n the form of
end .items,
(4) wool stockpiling, This category of buying has not commenced yet,
although the military is authorized to do so, Definite policy an hoe
much raw wool is to be stockpiled within a certain period is still in
the process of being determined, however,
Allied Dependence on the Far East
Ail of our allies are-depenelent upon the apparel wool exporting come-
,
tries of the Far Fast. The ccnratries of Western Europe; France, Belgium,
Italy, Western Germany, the Scandinavian eountries and United Kingdom
depend upon this area for abeut 75 P
ereent of their auppXy. The loss of
Anstralia and New Zealand as a source of wool would seriously impair the
defense efforts of the United States and its alliest;
Other Non-Coemunist Area 12spendeace on Far East '
Other ron-Commurdst areas a4;her than thoie mentioned would not be
directly effected by the loss of the Far East as a source of apparel wool,
However, the impact an world aremly by the loss of this area would affect
all the Free World,
The attached Table T shows apparel wool exports for 1949 from
Australia and New Zealand to the chief importing countries of the world,
Conclusion
. As exports of apparel wool from auetralia and New Zealand make pp
about two-thirds of the flarldws exportable supply, the lope: of this area
would reau:It in serious hardship an the industrial and military efforts
of the Free World. The remaining world supply would be inadequate both
as to type and quantity to meet the minimum needs of the military of the
United States and its Allies at current consumption levels.
The United States probably is in a less critical position than are
some of the Allies le far as wool supply goes.; The United States has a large
supply. of fibers that may be sWeetituted for wool to a large extent. First
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SECRET Appendix 2
among theae fibers is cotton, of which the United States is the world e5
largest produoero Second, is the 500 million pounds of re-used and re- ,
worked wool available annually and third, are the many synthetio fibers
such a orlon, nylon, acetate, dynol, dacron nd spun rayon? Of the
latter group, spun rayon is the largest displacer of wool? Dynel is
more wool-like than the others, but is the only one which fails to add
strength to fabric when used as a wool substitute? Nylon and acetate
have bepn widely used for many years ? More recently, orlon and daoron
have been increasing in popularity()
In military fabrics, the synthetic fibors generally are not substituted
for wool to a proportion greater than 15 percent? Woo/ fabric with
15 percent orlon, daoron or nylon fibers retains the feel of wool and
is stronger than 100 percent moolo Woolen fabrics with 25 percent
synthetic fibers have good wearing qualities but not the ?feel" of woo/
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-r?i)
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TUE FAR EAST
Appendix 2
Table 1. Apparel Wools', Exports from Australia and New Zealand
by DestinatiOnv 1949
DESTMATION
:
:
; .....koliralla_j_ JAKAgataLL,.....teig___,
1 - - nommuzetziaisat .0.0
s
at1GIN
United States 0 . . . . . . . .: 26.4 :
Allies : 1
NATO Countries: 1 :
United Iingd . 0 . . . . .1 120.4 :
France. 0 0 000a a a 00: 47.6 :
Belgium 0 . . . . . (Dee*: 31.9 :
Italy . . . . . . . 0 a 0 o: 23.6 :
Other NATO Countries. . .2 9.5 Z
Total NATO Countries. . os 233.0 :
Other Ailiest
Japan .....?
Western Germany .
New Zealand 00000
Total Allies. 0 cr 0 0 0 0:
2
agliCAM-SEMELI.-dC5at e
YUr East. . . . s000a a .:
Miscellaneous . 00 a 00o .: 6.8
Total Other Non-Communist .: 7.5
13.1
11.7
0.2
258.0
0?7
: .
keitiAnit :
U.S.S.R. a a a 000060 .:
Poland. . . . . 00a a 00 '.:
Czechoslovakia. . 0 a 00o .:
China..... 00a 000 0:
Total Soviet Orbit. . . .
Not Specified . . . . . . . .
Total Exports . . 4 4 4 4 4 . pa
W Clean basis,
Lass than 50 tons.
6.5
:
:
s
68.3
:
2/.6
:
3.9
:
2.3
9.3
:
105.4
s
3
1.8
o
7.2
114.4
32.9
18q.7
69.2
NI
18.8
388.4
14.9
18.9
0.2
372.4
1.6
:
9.7 : 7.6 :
991 : 1.9 :
1.8 : 0.2 :
0.3 8 /V g
20.9
2.3
9.7 3
s :
315.1 : 136.2 g
:
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17.3
11.0
2.0
0.3
111691.1.011MVESIMMILMNImeGt="1:44601
30.6
asaroan.00
5.8
13.111211,21ftantog
4513
entroaMtplanpairelrown14
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The Far Far East
Rice
? Appendix 3
Significance of Far East in Worlp2x
The rice surplus producing countries of Southeast Asia - BUTEInv Thailands
and Indochina -. export about 70 percent of the worldvs exportable supply of
rice. Average annual experts in recent years from these three countries totaled
about 205 Million metric tons s of which. nearly 2 million tonss or 80 percents
went to Other countries in the Far East s . and the Indiap.Pakistan-Ceqlon area.. The
chief importers 'have been India s Malaya., Ceylon.: japan and Indonesia in order, of
itiportance.
Btromas Thailends and Indochina produce only. 12 percent of the total woad
rice crop which is about l0 million tone annually. India and Chinas with a
combined total annual production of about. 80 million tons, produce 53 percent
of the world totals but both are normally net importers of that Commodity.
US Dvendence on Far East.
The United States s itself-an exporter of rice on a relatively Man scale:
is not of courses at all. dependent .on the Southeast, Asia source.
Allied DeLemlem_cn Far East
Of our allies s only Japan is an important custcmer of the three major rice
toporting countries. Japan has imported on. the average about 250 thousand tons
of rice &Iring the three years 1948 throudi 1950 from Southeast Asian sources:
representing more than 85 percent of Japenva total rice imports and about
13 percent of Japenvs total grain imports. During the years iinmediately ?
following World War II: Southeast Asia as a source of rice was closed to Japan:
and the United. States furnished Japan wheat and other grain during those years.
The U.S. is still, supplying substantial quantities of 'wheat and barley to Japan.
Japan desires to import more rice than it has been possible to do in recent years:
and thus reduce her continued dependence on grain from dollar sources. Japwo
rice inperts have increased since December 31: 1949f, lam the World Wer 11
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_S_ECHET
Appendix 3
program of allocating world rice supplies ended under the International
Emergency Food Council. In 1951, cut of total rice imports of 775,000 metric-
tons, 71 percent was imported from Southeast Asia - 323,000 tons from Thailand;
1489000 tons from Burma and 80,000 tons from Taiwan. The loss 'of Southeast
Asia rice would increase Japanes dependence on dollar seurces (US and Canada)
for grain.
Other Non-Com:m=1st Area Dependence on Far East
The countries chiefly dependent on the Southeast Asia e)Tortinc area for
rice supplies are nother non-communist countries located in the Far East,
notab4 India, .Indonesia Ceylon!, and Malaya. These and other Far East areas
have imported an average of 1.9 million tons annually, more than 70 percent of
the Burma-Thatiand-Indochina exports. In Ceylon and Malaya, rice imports from the
Southeast Asia export5sig sources, represents about t0 percent of total cereal
oonsureption? and from 50 to 60% of cereals consumed by the urban or non
self-suppLier portion of the population. The loss of the Southeast Asia sources of
rice would cause gneat hardship in these countries. In India and Indonesia the
percentage importance of Southeast Asia rice imports is much less.9 though in
Indonesia it represents about 13% of the requirements of the urban group eid in
India about 7% of the cereal needs of the rationed population a In these
countries the loss of the Southeast Asia rice source would be felt, and would
probably result in some reduction in consumption by the urban population. Part
of the loss mould probably be offset by increased imports of wheat, but at the
expenditure Of dollars, since the United States and Canada would be virtually
the only sources with unobligated surpluses of these grains.
The attached Table / shows average rice exports for the three years 1948-50
fran Burma!, Thailand, Indochina, and other Southeast Asia sources, to the chief
importing countries of the world with totals and appropriate sub-totals. ,
Conclusion
OVemomenstaa..ezannecaartre.
In conclusion, the loss of Southeast Asia as a source of rice would be
serious only to such other areas of the Far East and India-Pakistan-Ceylon as
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Appendix 3
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La.
rmained in the Free Worith Malaya. and .Ceylon 'z;ould be in a critical Llituations
reduced to dependence on the wheat surplus res, and Indiag. Indonesia and
Japan would be seriously affected, Whiles in they at leastg there may be
sufficieat grain in the United. Stateso Canada and other grain =plus areas
to fill the cap catuied by loss of ricog in practices, because of exchange
problems) the fact- that the areas involved are norma,lly rice eatersg end a
probable reluctance on the part of averting countries to reduce their reserves
by rc giving awAyil [pain in adequate amounts to Far East importerss would result'
in widespread hardships and very .likely starvation, in the chief rice importing
natdenp? No country outside of Apia wOuld be seriously affected by .the loss of
Southeast Asia riaeo
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Table 1. Moe: Exports froriSoutheaSt Asia,
Average. 1948.;.50
DESTINATIOff
~MA
SOURCE
Appendix 3
02.00.111.19,0002.0011121A?10.0.00,17.4.
: Other :
BUrima : Thailand : Indochina Southeast : Southeast
:
:
MUM .
jaicen. . . 0 0 o 0 0 0 0 a .: 72A 3 146.5
United Xingdom . . . . . . .: 21.5 : 21.2 .:
Europe (excluding U.K.). . .g 1,/ 8.1 t 46.6 :
Other Allies . . . . . . . .g - .5 4 2.7 :
--aegazdAdyjsagal....
- Total Allies, .
0,00301301.0AKKA?01
aaaua 102.2 : 217.0 :
gthezioAmaiLitt
Far East:
? India. . . 0 . 0 0 0 0 0
Ceylon . 0 0 0 0 0 0 0 0
Nalaya .........
Indonesia........
Hang Kong. ....... og
Pakistan . A000000 0 g
Philippines. . . . . . . 5*
Other Far East . . . . . .:
0:
05
:
23.8 :
:
357.1 189.2 3.5 23.5
331.0 : 42.6 0 : 0
123.2 z 295.9 15.2 : 0
131.3 g 303.1 : 0 : 0
20.7 g 85.9 : 7.8 : 0
1907 g 0 0 s 0
7.9 38.4 0 g 0
27.7 : 66.6 : 0 0
30.9 249.5
0 42.7
0
6.7 : 9.9
37.6 : 380.6
Total Far-East 1,018.6 s, 821.7
??????63.1.M.Mairem?WMANwSolt?
Middle East. 00000 g
French Colonies.
Ndsoellaneous.
26.5
23.5
8.2 1 12.8 : 0 : 0
1.0 z 0 : 67.5 a 0
30.1 s 8.5 1..---.21.4-1.
Total Other Norp6Communist - 1 057 9 g 843.0
Total Free World . . . .: 1,160.1 - i0600 :
a=9.1k11.51;
China? 0\0 C 0 0 0 0 0 0 V0
?
Total Exports, 0 0 0 0 0 13.:
2./ incomplete in /949.
42.2 . 108.4 :
1,202.3 : 1,168.4
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-
94.4 23.5
118.2
61.1
16.4
3
2.
:
573.3
:
373.6
:
434.3
g
234.4
:
114.4
s
19.7
46.3
:
94$
c
19390O3
:
:
21.0
s
68.5
:
2
018.8
2,3994 -
168.4
77.5 : 2,567.8
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T
SecuiltY-Iiirarffiation
THE FAR EAST
Wheat and Fheat Flat
.A1=0
Appendix It
4+.44,,4.41,10.-11M-fg?tbPFAE-EaPI-ID.World2s.-SUSTAY.
The only wheat surplus producing country of the FarEast - Australia -
ex-oorte about 12 percent of the wheat entering world trade e - Annual exports
from Australia in recent years have avoraed around 3 million metric tons,
of which about -1.1 million tons, or 39 percent, went to India. Another .ona-
- half million tons went to other countries in. South and Southeast Asia, The
Un;ted Kingdom, Egypt, japan ara New Zealand also pt chase larrre quantities
of Australian wheat and wheat flour.?
Australia produces about 3 percent of the total world production of
wheat which is about 170 million Metric tons annuary. India and Pakistan,
witha combined total annual production of about 10 million tons, produce
6 percent of the world's wheat- 5upni7 but Pakistan9s small surplus is not
ssient for India?s import needs and the sub-continent as a whole is a
lar oe net importer of wheat.
PIMP49;20 9n F52:1-East
The United Strter,, itSelf an exporter of Wheat on a large scale, is
notof course, at all dependent on the Far East (Australia) as a source.
114111aaannflgItat-01 Far Eas
Of our allies, the United Kingdom, Japan and New Zealand depend heavily
. upon Australian wheat. -These three countrien together imported over 600
thousand metric tons from Australia in 1949/50. Total imports from Australia
by all the allies were over112,000 metric tons, or 26 percent of Australia's
total exports.
The United Kingdom has imoorted on the aver-go of about 5.5 MMion
ietric tons of wheat and wheat flour annually in recent yearn. about 6
aNyesnreen-
21 In grain equivlents.
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percent of which came from Australia. Japans imports of wheat and flour .
have been around 2 million tons annually of which. about 9 percent has been.
Australian produced, The United States has furnished Japan with. a. large
amount of wheat in, recent years, but Japan like the United Kingdom,
desires to .obtain. as large a proportion of her 'grain reeuirements outside
the United States as possible in order. to conserve dollars for other needs. '
The loss of Australia would increase both Japan's and the United Kingdom'e
dependence on dollar sources (United States and Canada) for grain..
Other Non-Communist rea Dependence on Far East.
In this group of countries, India is the most dependent On Australian
wheat and wheat flour. "omit 40 percent of Australia's wheat exports or
1.2 million tons went to India in 1949/50. _India, Ceylon, Hong Kong,.
Malaya. and other Non.:CoMmunist countries in the Far East together imported
1.5 million -tons of wheat .from .ustralia in 1949/50, This amount
represented, 50 percent ef Australia's total wheat exports that year. The
loss of the Australian source wuld very seriously complicate both the?
f od situation and the financial 'situation in India. India-does not have
the herd currency resources to purchase additional amounts of grain in
Crnada or the United States, The logistical problem involved in supplying
India with. an additional 1 million tons of grain from Nerth America would
? be a serious one.
The attached table 1 shows wheat and wheat flour experts (in grain
equivalents) frcm Australia, by destination during June to July 1949-5(L
C,enclueion.
, From the standp,int f wheat supplies, the loss f Australia would be
m at sen us to the United Kingdom, Japan and New 7ealand, and to several
countries in the Far East providing they remained in the Free World
India, Ceylon and. Malaya would be in .a critical situation as' their
geegraphieal location would make difficult the transport to them of wheat ?
from the Western Bemisphere. All three are food deficit Countries and mass
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3 Appendix 4
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_
starvation is a constant threat to them. In theory there may be
6'u:indent food grain in the United States, Canada and the rest 4 the
Free vorld to fill the gap caused by the loss uf Australia. 1.4.i -dr.oice,
because of exchange problems and transport difficulties, such lose "would
be a hardship to the United Kingdom and Japan and might result in
starvation in India and Ceylon. (This reasoning assumes that there wth
be no increase in the supply of rice for export in Southeast Asia).
Attachment.
S E C v
,
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? Table 1.
? Jurr 1950.
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,
Appendix 4
:
Theu.1:!Atl'J
Destination -Porennt
1. tore
.0.*1131.1?14p. ? t ?
United
9
All ios
United U1;1E:Oen . s
3nn?, 1
9.7
Jaran6 s 4 6. 4 9 409
71,T7.1
6.1
s94
fl o, ,9 4s:
156.6
Other VATO Countries
62s7
200
Other Allies . . 0
41.
+++.4...44499,4944-4411.944940t0.4,
4.+4449+914.9.94+049444.4494,449.44 404 4.4,404.4444404043- ,
Total. Allies
0 0 8
OthFT- Pon-Ca--T-mrt-,t?
'2est-rn flurono s
`?'*far
, . 6 9 4
Ceylon .8 6 8
Tonrt. "?:ong s
? ? s
Otir 8 , 0 4 60
Total Far nr.flt s
112 ? 6
2f1?3
e
4:
41
4
'4
?
:
:940
k r
1 r77.09
.133.4
'1 (74
11.6
3,7
3.:7?
-7,0
14114.1.41.01.4**4.4.144.4444*.4.44.4.0.1.9444
1.,635?0
Vear and YcZast::
..gypt s e 41 5 0 0 9 9 24,1 04
Other .;9996 4 4
' 4441'
Total T:oar
neAt
Other 0 .
0 0
Total ther
71,:orpsklerv.iunist
ro ane
Total ? E7r,orts
0 (1
313.6
"Ft,*amn*dmmatomsteveof ant.% ousewoo.aves?????,..,enssweamownsen
99.6
2416991
04044?5444444 44400,444445
1
?
70. 0
n
0?3
107.2
3334
0 04
3
09S'? 2
100.0
1/ In risruin cinistirjentst,
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a
Security Information
Uses
THE FaR EAST
-
Copra and Coconut Oil
Appendix 5
. Copra is the raw material from which coconut oil and copra meal, as hg
-
products, are derived. Coconut oil has many uses, both for industrial and
food purposes. One of its principal uses-is in
, shampoos to
which coconut oil imparts desirable
its high lauric-acid cont ot. Then refined and
the manufacture of soars arid.
lathering qualities because of '
deodorized, coconut oil is
used extensively in the baking and confectionary industries. There it is used
in the preparation of frosting-fillers, as sprays on cookies and crackers, and
as a replacement for butter and cocoa butters because of their higher costs,
in candies. The fairly higt leltine point of coconut oil, contrasted with
that of butter and cocoa butter, imparts a better keeping quality to items made
from it; this factor is important under conditions of no refrigeration. Further-
more, coconut oil is used extensively in Europe and other countries, in the
production of margarine and, to a lesser degree, shortening.
Coconut oil is a strategic oil in the Nation's defense-armament program
and is, therefore, a stockpile item. It is important as a source of lauryl
and octyl alcohols. Lauryl alcohol is essential in the manufacture of all--
purpose sy:thetic rubbera highly important in time of war. Moreover, deriva-
tives of coconut oil are used as plasticizers in the milling of rubber goods
and jn the production of a large number of chemical specialties; especially
synthetic detergents and disinfectants. Finally, coconut oil is an important
ingredient in the manufacture of napalm bombs, a modern weapon of war
Substitutes and their Availabilitie6.
Substitutes for coconut oil for certain uses are readily available, or can
be expanded to be made available, but for other uses, substitution is less
extensive. Tallow and greases, of which the United States is the world's
major source, and palm oil are satisfactory substitutes in the making of soaps
for civilian use although the end product may be inferior in lat'vzr5ne quality.
? )k
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SC RET
Appendix 5
However, with the rapid growth in the use of synthetic detergents, very acceptable
soap products can be manufactured without the use of coconut oil, In the baking
and Confectionary industries, other oils such as peanut, corn and cottonseed,
while perhaps, less satieractory, can be used, Palm-kernel and babassu oilsr with
properties essentially the same as those of coconutoil, also are good substi-
tutes? in %rope and other countries where Coconut oil is imPortant in the menu- ,
facture'of margarine and shortening, whale oil, to a limited extent, and aydro-
genated "soft 'oils" - peanut, 'cottonseed, and soybean - are suitable alternatives.
In contrast with the 1920,s, when large quantities of coconut oil were used in
+:he Unita ,tates the ingredients now used in the manufacture of margarine in
this country are primarily cottonseed and soybean oils. :As a source of lauric
acid, important to the Nation's defense program, coconut oil is second only to
palm-kernel oil, relatively limited in quantity. Babassu oil, also a good
alternative, is available in only limited quantity from Brazil. Annual world
availabilities of palm-kernel oil, virtually a "byproduct" of the production of
palm oil, are estimatied to have ranged from 350,000 to 375,000 tons in the last
three years, equivalent to only 20 to 30 percent of the availabalities of
coconut oil. Babassu oil supplies have been estimated at only 22,000 tons in
recent years.
'Mile other fats and oils can be used interchangeably with coconut oil in
many instances, there are limits to which this can be done. Nevertheless, a
substantial rise in the price level of fats and oils because of a loss of Far
w,ast supplies of coconut oil, likely would bring forth increased output of
substitute oils in Free lorld countries,
Peanut production probably could be expanded, if necessary, in Africa, the
United States, South America, and certain Caribbean countries, Soybean output
probably could be increased in the United States chiefly, and to a lesser
degree in Brazil and Africa, Palm oil And palm kernel oil production in the
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Appendix 5
uncultivated areas in Africa could be expanded under suitable incentives, and
newly-planted areas in certain parte of Africa and Central America will be
yielding new production in the next three to eieht years. Rapeseed output in
Europe could be increased to a limited degree. Oil from cottonseed, a byproduct
of cotton, would be determined by the world's needs for fiber, Output of whale
oil fr.= year to year is limited largely by the international agreement limiting
, the pelagic catch of whales. Increased production of lard, tallow, and greases,
all byproduct items, would be governed by the extent to which livestock, numbers
are expanded. Apart from considerations of national fat-and-oil stockpiles and
inventories in commercial and private channels, and without consideration of the
extent to which new technological developments would obviate the need for the
volume of fats and oils consumed today by the Free Torld, it would appear that
some substantial cutbacks in consumption would be in order if the Far East
sources of coccnut oil were cut off
Torld Trade is LargtlzAltgma
Mile coconut oil as such is exported in substantial volume from the world's
major surplus coconut area - the Far 'last - most of the oil enters world trade
in the form of copra, 'Exports from South Asia - Ceylon - however, are largely
an oil The najor coconut oil consuming countries of the world, principally
the United States and several in "festern Europe, prefer to import copra to be
crushed into oil and meal in their own mills. Thereby they provide additional
employment 'rithin those countries and have available a valuable feed concentrate,
copra meal for their livestock.
, ? In the light of the foregoing, and because of the greater ease with whleh
data can be comprehended when expressed in terms of a common denominator, the
analysis hereafter will deal largely with copra and coconut oil data expressed
in terms of copra equivalent (table 1). Thus, the data on coconut oil (table
2) have been converted to copra equivalent by multiplying by 1.59. This factor
is derived from the assumption that copra, when, crushed, will yield an average
of 63 percent of its. weight as edl.
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Appendix 5
Sienificance of the Far East in 7orld'AeLeplz
The Far East is highly important as the source of the dominant share of
the world's exportable supplies of copra and coconut oil. Three surelus-pro-
ducing countries in Asia - the Philippines, Indonesia, and Malaya - contributed
in 1950 nearly 75 percent to the world's exported surplies of copra and coconut
oil which, in terms of copra equivalent, approximated 1,750,000 metric tons,
Exports from the above three countries totaled 1,275,000 tons.
Approximately 25 percent of the world's volume of copra and coconut oil
traded in 1950, came from Ceylon and islands in the Southwest Pacific including
Papua, Mew Guinea, Few Hebrides, the Fiji Islands, British North Borneo, -iestern
Samoa, Sarawak, and others. The rest came from the African area
United States De ndence on the Far East.
The United States, a very substantial importer, is almost wholly dependent
on the Far East for its supplies of copra and coconut oil. In 1950, in terms
of copra equivalent, about 43 percent of the exports from the Far East went to
the United States. Virtually all of this was from the Philippines.
'Purchases .of the United States have for many years favored procurement
from the Philippines. This has resulted from import duty and domestic-processing
tax concessions to the Philippines. These concessions', currently provided for
under the terms of the Philippine Trade Act Of 1946, and due to expire in 1974,
are granted to help strengthen the Philippine economy. Mile there is no.
import duty on copra entering the United States, regardless of source, there is
a duty of one cent per pound on coconut oil from sources other than the Philippines
(and United States territor5ee and possessions) from which imports of oil are
'duty-free. ,Moreover, while there is a tax of three cents per pound, levied'
at the time of the first domestic processine, on coconut oil originatine in
the Philippines, the processing taxes on oil from other sources total five
cents per pound. These taxes, and the tea-cent differential in favor of the
Philippines, apply likewise to oil produced in this country from copra orieinate
ing in the Philippines as against other sources.
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Appendix 5
The importance of copra and coconut oil to the United States, now a
major world-net-exporter of fats and oils, is indicated by the fact that
in the last three years imports of fats, oils and oilseeds, in terms of
oil equivalent, have averaged 540,000 metric tons, Of this quantity, the
A
oil equivalent of copra and coconut oil imports has averaged 312,000 tons,
If58 percent of the total. However, upon the cessation of imports for
stockpiling of coconut oil, imports of these items are expected to decline
materially awing to their decreased use in soap manufacture because of the
expanding production of detergents.
The stockpile objective of 122,472 metric tons with the target date
set for 30 June 1954, was 95.7 percent complete on 31 December 1951,
Deliveries scheduled for 30 June 1952 will increase the stockpile to 96,7 ,
percent of the total objective, and planned deliveries for the same date
would boost the accrued stockpile to 995 percent of total objective. The
stockpiling program is not lagging as indicated by the fact that whereas
scheduled deliveries as of 31 December 1951 would have meant 96.4 percent of
the total objective actual deliveries put the oil accumulation at 95.7 percent
of the total objective?
Stockpiling coconut oil is a new experience for both the government and
users of the product. TO assure adequate stocks of high grade oil without
the effects of deterioration the stockpile was bunt up ahead of schedule to
allow for rotation of stocks. The size of the stockpile of coconut oil is
determined on the basis of a supply sufficient to last 5 years from the time
the stockpile objective is met.
Allied_pependence on The Far East
Our Allies are heavily dependent on the Far East for their copra and
coconut oil supplies. Perhaps a notable exception is the United Kingdom, a
large importer of copra and coconut oil, which obtains the dominant portion
of its supplies from its islands in the Southwest Pacific, and British East
Afrida,
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Appencia 5
- 6 -
Exports in 1950 to our Alliee from the Philippines, Indonesia, and
Malaya, the source of nearly three-fourths of the worlds exports, totaled
555,000 tons as copra equivalent, nearly 44 percent of the total tonnage
from those three Far East countries, This was but slightly more than what
was shipped to the United States. Exports.went mainly to the Netherlands,
Western Germany, Italy and gather 1'A70.countries," A small quantity went to
JaPan. The small quantity shipped to the United Kingdom from the Far ,East
is due to that tountryJs practice of procuring its supplies primarily from
other sources, as explained above..
Other Non-Communist Area. Dependence on the Far East
' Other non-CommuniSt -areas of the. world? while taking only 13 Percent of
the copra equivalent exported in 1950 from the three major surplus-producing
countries, are highly dependent on the Far East. for their copra and
oil requirements- With India a major producer of copra, but nevertheless
deficit in this commodity and coconut oil, exports from the three Asian .
countries to "other non-Communist countries" totaled only 161,000 tons, copra.
equivalent. This' tonnage went-primarily. to Western Europe and South America,
Only 24,000 tons went to India-Pakistan.
? One should note here that the India-Pakistan area could, if &Am.-Last:wires
necessitated, rely entirely on Ceylon to supply its needs for copra and coconut
oil. In 1950 Ceylon exported. 144?000. tons, copra equivalent, Of the total
volume exported to India-Pakistan from the Far Easit and Ceylon - 67,000 tons -
only 43,000 tonse or nearly 65 percent, was from Ceylon. Thus, while only 8
percent of the worlds exported supplies of fats and oils in 1950 were from
Ceylon, that island-eountry"could well assure India-Paklstan of sufficient
coconut oil supplies if sources in the Far East?were cut off,
The attached Table I contains data on the exports, expressed in terms of '
? copra equivalent, of copra and coconut oil from the Philippine's, Indonesia,
and Malaya to the principal importing countries. of the world,- Furthermore,
it containa data On exports from Ceylon on the same basis In Tables 2 and )
are the data, showing exports of coconut oil.and copra, respectively, which
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, are the bases for Table 1.
Conclusion
Appendix 5
The less of the Far East as a Source of copra and coconut oil would not
seriously affect India-Pakistan because of the likelihood that their require-
ments could be met easily by supplies from Ceylon. However, the loss to the -
United States and to our Allies, particularly in Western Europe, would be
Substantial?, Nevertheless, the United States and its Allies could cope
N".
with such a situation .today much better than -a decade age when Far East
supplies were cut off byjaPanese naval and military actions, At-that time
the United States was a major net importing country?. Today the reverse is -
true The United States now is a. major net exporter of various fats, oils,
and oilseeds'.
an average of
This has come about by having increased its production from
3,7370000 metric tons (8.2 billion pounds), oil equivalent,
in 1937-41 to an estimated 5,600,000 tons (12e3 billion Pounds) in 1951r
Atthe, same time the United States changed from a net import position of
715,000 tons (1.6 billion pounds) in 193741 to a net export position in 1951
of 550?000 tons (1.2 billion pounde). By a further expansion in the oilseed
crops, primarily soybeans and peanuts, and by:restricting civilian consumption
of fats and oils, perhaps to the. extent of decreasing annual per capita cen-
sumption of food fats and oils from the 1950-51average of about 44 pounds
to 40 pounds e the United States alone could make a very substantial cone
tribution to her Allies in the event of the loss of the Far East supplies
of coconut oil and copra, equivalent to 800,000 tons of oil. Furthermore,
the. United States position is greatly strengthened by the results obtained
under the stockpiling of coconut oil:, Likewise, our Allies are presumed to
be in a more favorable position becauze.of their stockpiling activities in
the last year or two?
The United States and her Allies today probably could withstand the
loss of Far East supplies, Preparations for such contingency had not been
'Made prier to Pearl.Harbor in 1941. Then the United States was a major met
importer of fats and oils. But todayo being not only a major net exporter of
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Appendix 5
fats and oils, the United States could, if necessary, inerease production
and net exports to even higher levels than the records attained in 1951-
Sence, the stockpiling program of c-conut oil in the United States could
be operated solely from the point of view of military necessity.
Attachment
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f
40700020/0010W
al1001090000.21/40021
- 9 -
Appendix 5
Tb1e 1. Copra and Coconut Oil Exports (in Copra Equivalent
by Destination, 1950.
04009100.00C*000011000000.w,000wwwww0..w,..0000M,VMW*00.401000A
DIZTINATIZ
United States a
0.0 0 0
Nam
United Kingdon?, ? . a
Canada. ? .O.4 0 0
Italy . 00000
Netherlands
Other NATO Countries.
Vestern GermAY
Japan *aoacco
Total Allies. .
SOME
'South Asia3
Far East
: 00,10
and
a
_
;
.
.; 1.0
a 4:.
a
o:
a 0
0
. .
.
. a 17.0
0
0 ; 30.0
a
. .
0
6.5
.: 15.1
a
.
e
0 0
02
0,00001001,0000/00010000.
0
0
; 82.2
g
0,tbspr tal.-9mm=
Wostern Europe. . 0
Fax. East:
Pakistan. .
Other Far Easta
Middle East
South itillortea
Other .
16:wwWww, w Mtwww.
TOTAG
es
Na
ra,-9.1e.st-tig.A.12:1aM
:
: 35.6
180.8 ; 46.0
12.9 : 56.4
40.6 s 2.9
; 29.2
234.3
.02600.wavessugaars,strasze.070mwrourreer
0: 12.4
? Total Other Bon-Comunist
Soviet Orbit. ? 07 a a
? 0 0 0 0 0 0 0 ;
Unspecified .
15.1
27.7
.2
3.0
,6
.3
191.9
7.6 .17.1 ;
02,
marlsnamemensw.e01-A00,ause0sasomonwysnincomnsmonsermr
a
?Total Exparts ? ,.
.armazt...../-msamecia
Nam
59.3 'a
1?0
. ea 143.5
aiwaimotwAOM
?
12.9
37.8
5.2
a
a
3
05 549.7
13'7 : 14.0
- :45.1
15.8 a 68.4
30.7 : 287.5
36.6 : 112e'4
31.2 89,8
1.1 30.3
129.1 : 6375
30.6
21.7 : 36.8
3 3
1255 i5>75O0
:r/
502 21.1
38.7
4:63 10.1
wornVowwww0030000040
67.7
7.6 73.0 80.2
10,1
400
241,9
SECRia
1.1
220.1
2
84,9 10,,0
1.5
0 VW
814.7
240,001000,0109010
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THE FAR EAST
Table 2. Coconut 01/, Exports by Destination, 1950
DESTINATION
mannairalCROMOMMUC4140r,V16.06...
.060.630.1.2.P...50:111,66
OR7EGE
The Far East
2
:
United States . ..
....... .
:
Agin :
:
:
Canada. . . 0 0 . . .
Ray. 0 0 ? 0 o 5 0
Netherlands . . . . 8
Other NATO Countries.
3
0
?
5
a
.
5
4
a
. .
a ?
0
o ?
Western Germany
0
0
0 0
Other Allies. .
0080
Total Allies.
e. N
.
1
Western -mope
60909
0 0
Far Eat:? -
? India . ........
?
. .
Pakistan. . 0
*
0 *
33
0
9 i
Hong Kong . 2
0
0 0
0
a 0
Other . . 0 'A
0
0 0
0
?
0 0
Middle?East . 0
o
33 9
0
5
? o
Other.. . . . V
0
? 5
?
?
53 35
:
:
64
Appendix 5
.101.1.111.1.1111901114.
Ratgetamminsestp.a.,easioxy.
2.6O.6
South Atiia
:
a,
64.7
i
0?6
-
:
8,4
9.3
8.4
:
18.9
1.7
:
3.2
7.7
:
9.5
0.2
:
0.3
Ci
--
?3
:
50.9
2.8
s
63
13.7
a
4.3
0.6
:
11,5
4.4
5.3
t
0,1
2.0
:
1,9
5.,6
:
OS 407
d mrapladaiimg_.
14,0 a 8.3
0.6 ? : 7.8
1.2
7,7,7
0.2
6.1MMI.,K64.11.61.6.61-.1=MM30641.1WIPOWAIV60.111.16C
2./
06461.107.11
Total Other Non4ommunist
:
Icageg69Ekit g
s 0.7
:
Poland. . 0 0 0 0 . o
8.
0
'3.
U.S.S.R. 0 . . 0 ti 0
6
0 0
Total Soviet Orbit.
6
6
6 .
25.2 :
2
2,8
:
13.7 :
0.6 :
4.4 :
5.3 :
2.0 :
31.4
ft
4
91S '
617.061166..07661/011411.66.4?660.64,6166111M6
34.4 2 24.07
0.7 :
1.0 :
:
Unspecified. , .i . . .
. . . . 3
:
1.7 s
446
Art'mmtifolicznIV63.1a,mma
0.3 :
Total Exports . .
16,War6.4176.1,12066041.216N00 05?9595095190503509051.3
5709
0.7
?rnmeesenatmard*Ron1,0120.111019.1.alaie.6ince
?:
1284
76?9
W Less than 50 tons.
IV Statistics from Indoehina are not?avtilable for 1950. Total exports of coconut
oil from Indochina in 1949 are reported as less than .19000 metric tone.
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THE FAR EAST
Table 3 CEti try stiriation, 1950
nocornermeawailWesttwO.WWWWWWWWwwWWWWW3MatrairWEWMAKal 05,WawrgAsts...4 WS*
Wal,110WW?-?WWWWWW.19.1a1.4- WWWWWWWWWW,WWWWWWWw,:,,,wwwwwwwW,,,,WwwWwwWw1WW. WWWITWLYWIWWWWWLIIW?
? W
IrEaSTRIA.TICII
,WWWWWWW,M1WW?ara,R,91:Wattar-fira wrovenenwiwust:WW,W,,..1.Y.Watt
United- &bates ? ?3 3 ? 3 .
tg i'd,14d010,..
? CO
Notherlarda ? ,3 9 9 0 C 3 2 180
0.1;,hro, NATO CrAntrftes ? , 12 ,9
Othsr A.1.11.o3:
ABTTaarq a, 0
rr? 0 0
Tcfi,a1 4117.10z,
ar',1115r Acak-Cial4D,21-11
Weastava Ekr:Lope. ? 0
Par Rest. 3 0 0 0 0
Middle Eat ?
South
OtlacY.n..
4.1 4, . Lt. ,0
? i?
0 0 a 0 0 0 0
ikpflar4ix:
CHIGM
WWW0.,royawirtAlwwwarewWWWWW.API'VArna0)/41,11191WWWW.W.V. WAIWaarNsarernir.S.Wryerir,?[WWWW[WaswRinnw
The Far 'Last
2 ?
aliwILISWLWWWWWWW-0WWWWWWW/rWraWla. rILI,WWWW.WWW?107autpadnimf4.041wwfra-wwwwwwww.wwwwwctrAWC11310.,
..1211.1,11,2WrzaLn..1,12,1m,.....;,_:,,Iv" ,t41..231...
? ? .-niAgassazillisilalv.:Z9zi ? ?
s s .
446.0 s ,.,.....t
446 ? o 1
s
0
arc. :
: 'j3?7
:4..8,3 g
g .12456:431
1 ,47'.. :I .
. : ..,
.,.
u.45i05
3700 g 134 .
g :
4036' a 2.9 g 19.0 g.
g
62?5 :
g g
- . 29'? : .1.1,, 30.3 g
WWW?WWWWWWWWWWWWWIF eallit?CULMIAWArw.rawW1WWwwwitlapwwww. MaIntbir,Wwwlw1WW1?1,11.[..iww.....2801wrow*mworw,nro.nwslaw?.? tw?www.crrnsaf,
234,3
18806?09.1 4 512 a 0
SMONFIWWwwwlesarlfr.WW3A WWWWItlialfaVienGOSONOWWWWFWAVIMIZAWnwillAWenarnarrnwtx.WWw11, 7.01011wornwornrarail=lalwwWWW wriwa?Wisev
141!
1701 2602 5009 . 24
?
g 17..7
12?9 2.0 1439
37,3 3,2337.3
0.9 0?8 1(31 f. ?
fie1,,.....WWW,NetWaiwwwreM.Warnrno,.....SAW.KRITOWWWWwW0.1WwwwWWWWW.W WealplaW".
Otter =tins ?;
/?.0 68.2 g
Soviet, er. it,
Total lc"-
0, a 9 0 ? a 30
?
0.?
WWWWWWW.....awfwalwrIatenwWw.
1(6?2 ? g. 20.1.I.
4.11-WIMITAMOWETVWWWWWWWWW AWAITS.maITALS/CWWW1WWWWWWOUWAINWMailltrt.4.016PWWxualenreelytWWW.Artr.....WWWWww......,WaliTWBFAlatraw 1...WWWallWaatTetlawsta-, Wain*
703. 7,3 ;
CS,
34WWWWWWWW,IlwrtWWWwwww*WwWWoIl 00333,3. Or....,- ..w. 3'4 3033 au,,:Mc .erowi:w0,LltanwaxwaxwilaWalWa/Ww11.toremasamtitawnownwf.ftwwwlwanctary,esoptra
a
2.41. ?9
? o w
cYSIOWWW4,6arrtalfIXAMVIA.RWKWISPIR,..14110-0,1124iWWWW1?144.,-71,7.WOWWw.01.11., W?Wini.x.,?WwWWWriCiWarnrreawt,
70t2'?,E1 ?
126.8
g .
'
. 2071.,5 : 21a5
'? a
raliudee unreesorded shri.7rAelats to 113313.ya of v.ppromlnataly 92,000 =citric tom.
sVfmk",27,
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MiC,11/41:
VIV9Xtraki??,IiInZIR 16,
. ?SEr..5TY INFORMATIllg
Appendin
THE leiltIJ
eincheeea Earl: Weine and Quinidine
enifi.cance _of the. Far Eart World",,s Sva
Indweeia is the 4:nely country in thie area vhich produces a s lificaret
avertable surplus of cinchona bark?, the sour' ce of quinine,. qu1xeld1x4e and a
/311.17ber of other impertant drugs,. Indorseste produces about traroethirds of the
cinchona bark 0-A41ring enzld trade cbevnels. About oneehal.f or Indonesia, a
productiors is eapterted in the form of cinchona bark, and the balance is
pozesceesed into quinine end other derivatives for &mastic consumotical and for
expert to Hong Koag4 the Nether ds and to alarge number of countries in
the Far East. Abut two-thirds of the cinchona bark exported from Indonesia
goes to the Netherlands? where it is processed- into quinine, quinidine, and
related drugs. Tee Netherlands evorts quinine and quinidine to many
etearstriee all over the Tvorld. Host Of the balance of indonesiee exports of
cinchona bark goes to the United Kingdom, Italy,. Germany, land the United
States,. and moll of elle quinine and quinidino processed in the first three
of the above cetustrleee is ezported,,
Although cincheme bark is pruluced in India Ceylon, Malaya, and the
litilippines,? production in these countries generally is insuffietet to sup-
ply local .requiremo.
United, States De....pandence on the Far Fast.
The United Steee3s does not produce any cinchona' bark and is .depe.ndent,
. directly -or indirectly, on Indonesia for about three-fourths of ? its total
supplies of cinoltexel bark, from which. quinine .and quinidine are wdraetedo
There is currently no prograem fm further stockpiling quinine.
?recent rnpplie c .318?5 metric., t0.110 are 187 percent of the 170.1-ton
? stockpile objective eeco.mmended by the Munitions Board. QUinine can be store
ad for long periode of ti ithcut deteriorating, and can be processed as?
need.ed. The el:zees:tee amount in stock is being used as standby supplies to
supplement the quiniiire. stockpiling progemm if necessary.
San attempt is being made to net quinidine stodkpile objectives by
processing ? the drug from its original souree, cinchona bark, for two
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N , YEPCM7X2f Appendix 6
. 2 -
reaseme:
(1), it 1e.e. simpler operatiqn? and (2) it 10 less expensive, The
31 Deoember 1951 lirmtory of 28.9 metric tons was 39 percent of the eotal
jective of 73.7 toss to be et by 30 June 1954.. 'Had all supplies seheduled
foe delivery been Made by 31 December 1951 the'steckpile would have been in-
oreased to 55.8 notrie tons -or about 76 percent of the total. objeetive.
41though. this indict what of a lag in meeting .stookpile quotas, it is
planned to have 68.tons or 92 percent of thd total ebjectivenin the etoek-
pile by 31 December 1953. These deliveries will come from. normal trad3.
sources au long ea practicable. Three ounces of quinine- yields about an
ounce of quiniddne. At this extractien rate the Overstock of qtinine presente
ly in storage is more. than .encugh to fulfill the quinidine stockpile
.objective when added to present -quinidine inventoriem. Since -the proves:3 of
extractirg quin1dine from quinine is about three times as costly as extract-
ing quinidine- from JEIVA- cinchona bark, an attempt is being made to fulfill
stockpile reqtdrements from the normal avenues of trade.
El2m.q.EFILor Alllev and Other Non-4,;oranninist, Areas on the Far East.
Comtries in the Pacific area are more dependent an Indonesia for
quinine then are countries in Africa and Latin America. The Belgian Congo
now produces about ow-fifth of the world ,s exportable supp1y of cinchona
bark, and its output could be expanded considerably if necessary. Cement
? world production of cinchona bark exceeds effective demand, and produoers
in the Belgian Congo and Indonesia have voluntarily restricted production
in order to keep prizes from-dram:111g to an =remunerative level.
?Tanganyika produces a relatively small surplus of cinchona hark.
In Latin Ameriea? cinchona is produced in Guatemala, Costa Ricee Peru,
Ecuador, Bolivia end Colorable-, 'Mese countries exported substantial quan-
tities of cinchona bark during World War II when Indonesia was in,thehands
of the enemy,ebut since then exports have declined. For the most part, the
bark produced in Latin America is low in quinine content compared with the
bark produced in Indonesia and the Belgian Congo. Most of the trees grow
wild, and transportetion is a big obstacle. However, a process of selec-
tion and breeding ie being carried on in Guatemala and several of the other
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? SECRET
Wait Appendix 6
3 -
connntriez which Sacws promise of le ding teniarger production of better graee
einehyna ii the fitwe0
Ccnslusion.
The loss of Indonesia wnuld seriously reduce the supply of cinchona bark
and its derivatives available to the United States, its allies, and to other
nmn-Communlet countries, particularly to those in the Pacific area. Ilithin a
few' years, production of cinchona, bark in the Belgian Congo and certain Latin
American countries could probably be expanded sufficiently to meet ninimum
Free World. requirements. Prom= in the develcpmant of synthetic anni-
malarial remedies and in mosquito control will reduce requirements of quilrbeg
but quinidina reqirements for cardiac therapy are innreasing. It takes 10
pounds of dried Java cinchona bark to produce 1 ounce of quinidine
The importance of quinine :in the United States as an anti-maldrial drug
is declining rapidly because of the development of cheaper, more effective
synthetic sUbstitutes which are produced entirely fram material readily
available in the United States and elsewhere in plentiful supply. Among
'these synthetics are ohlaroquine camoquin? paludrine, pentaquine? and
.8tebrIJT$ Chlernquine is the drag of first choice in the treatment of
malaria at present. It costs substantially less than quinine? and is loss
toxic and more effective. Camoquin is a new drug nhich is similar to chloro-
quints, but about a fourth less expensive. Paludrine is used extensively in
areas under British influence, and it is less expensive than eithet
chloroquine or camoquin but is qnite a it sloner in its reaction. Quinine,
henever,
is still the anti-malarial remedy in chief use in all countries in
.0/ich malaria is prevalent. The greatest requirements for quinine is in
tropical and autr-lopica
areas of the world..
It is the opinion of certain medical authorities in the Public Health
Service and elsenhere that cinchona barles chief value at present is as the
source of quinidine? a drug uaed in the treatment of auricular fibrillation
(irregularly bew4ing heart)?. and that total world requirements for cinchona '
bark will decline rapidly because of the development bf less costly. and
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=Rai'
id
4
Blare
- 4 .-
Append. 6
Ave s mtbotie substitut . for quinine, and because of ince-ceased
use of new, and more effective insecticides in the control of mosquitoes.
It is difficult to estimate U. S. requiremerts of quinine; sinco its
use in the treatment of malaria is being supplanted by less costly and more
effeetive synthetic adhstitutes. A commodity committee estimated in June
1950 that about 25, etric tons (900,000 unces) nould be adequate for
military and civilian requirements during the first year of an emergency,
but that estimate appears extremely high in the light of subsequent develop-
ments. The same committee estimated in August 1950 that the United States
would require for rilitary and civilian use about 1405 metric tons (512,000
ounces) of'quinidire during the first year of an emergency. Since quinidine
requirements for cardiac therapy are increasing and since there are no
known substitutes, the above estimate probably represents minimum future re-
quirements of this drug.
gurnyont
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?
Appal:A.1g ?
. /
The importance
SECRNT
Secuxity Information
THE *gAR EAST
Silk
Eaet in *aDT.O.Y,
_japn is the world's largest producer of nEvg si.OL Ai.hu1121
world production, is abcla 16,000 y.Q,stris to .(35 pound) of whin
Japan produces abouA one.4,elf. China is alba an 1,mspr'.Ant T)r-0(1AC
raw silk, the nsj/Jr- portion of which is utilised. witnL7 Chinn,
japan annually exports abont'5,000 tons (II million. pounds), or atout
80 percent, of all the rat silk:mtering world,trad'e.chanosis, Chim e
ports, on the a7crava, out 500 tons (1 millisn poundf) annual)y%
also ogports small ousaltics of raw silk. Together, the' conatrivu of 'Ole
Far East eueply about 86 r,ercent of the world's exportable su7np7.y of rat.
silk.
T8ble 1 shors world trade in rat' oilk by country of origin ad dostin-
ation for specified periods vith appropriate tote, ls and subrals,
Silk Waste in general, those countries tthenport raw s5Jk also
are exporters of silk vasto.,.,
1,11 a-ddition?; other countries which imPort
raw'zilk for mirufacture into r:ilk goods aro .e,,:zporters of sin ',Taot2, Ha
thiu group of countries U.re Canada, Bra.gil, SwitsorLond, aud th U. S. S.R,
Toi:s1 world exporte of silk waste app.roximsto 2,500 tons (5,5 millton
pounds) annually, Of thie amor4nt, China exports about 1,100 toas (2,4
million pounds) or 44 pezcont, XtUly .ezpo-Xts about 400 t(iris -900,000
pounds) and Russia about 300 tons (680,000 pounds) annuelly. Table 2
shows the -major s uroez of silk waste aTports and principal iportlng
countriee
The principal Ilnes of raw silk axe for woven fabrics, draperios"
hosiery and thread, in prewar-yoare about 75 to 80 percent of he silk
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' Appendix 7
Consumed in the UniAcd States went into silk hoBiery, Now hesiory 9.$ Tads
almost entirely of pylon and rayon.
Synthetic yarns slso bvve replacd
silk in parachutes and other items. Oaly in its. use for thre6i has silk
lwrgely maintained 1.t3 prewar r,osition
Silk waste and soils are ned almost exclusivoly In the pnaufacture
of gun. powder bags the United States. To a cortair, etet, raw eilk
Is being used to replace waste for thio purpose. .
United SvIter, Donendcace on the pan .oas,
The United Stca is the wold's largest imorter of loO.h rev.
. .and ilk waste and the Far Eavi, is the principal 3OUTCO of supp1y. jnpad
supplies i0(16 United States with 85 percent of ite 'fax silk imports. Out
very little 0.1k waste.' The 1023 of Japan, _therefore, would be gaialic
to the United Stater,: from_the utandpoint of raw silk supply,if, the
United States stockpile Ictit12 not adequate to supply minimum defense needs
while silk substitu,i;es were being develoDed, ilthough the United Stat
has been securing both raw silk and waste from Chino (1 million pollads,
of each in 1950), that country, obviously, Is no longer a dependabls
ource.of supply.
The UniteA Ststes is stockpiling silk waste. The objectiVe io ?
4,309 metric to as af 30 Juno, '1.954 A2 of 31 T5e2,, 1951, 620
ton, or slightly more them 14 percent of the objecV,ve, hsd been de-
,
liItered. This waN. only about 20 percent of the amount scheduled to.
delivery by the end of 1951. .1towever, deliveries have been more. reguDtx-
in recent months eAnd, ao difficulty fj.n attaining the stockpile objective
on schedule is anticipated. With the stockpile objective completed the
United S.tiates will bo atmured of 2 4 to 5 year supply of silk wtete.
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SECRET
Allied Dpaeliceon_ Far ast.
Appendix 7
- Of our allies, grance, the United Kingdom and Switzerland are Vie
largest purchasers of Japanese raw silk, Most of gong Kew-es imports of
about 400 tons from China undoubtedly is transhipPed to other countries.
Belgium and France also purchase significant quantities of silk waste from
China, but again China is not a dependable source of supply, If the Japan,
ese source of silk were lost, there weuld not be a large enough dependable
supply of raw silk,or of silk waste to supply the needs of the allies.
Other Non-Communist psmeadpnce on Far East,
In this .group of countries, Switzerland is dependent upon Japan for
BO percent of her raw silk imPorts. India and, Pakistan together procure
50 percent of the' total imports, or 300 tons, from Japan and China. The
loss of Japan might not, however, be serious ,to thefe countries as Japan's .
raw silk might remain available to them in the same manner as China's silk ??
is still available on the world market.
Conclusion,
, The loss of the Far East, particularly Japan, would seriously curtail'
the supply of raw silk available to the United Statei . and the rest of the
Free World. The SOAOUSLOSP of the resultant situation would depend on
the adecuacy of the Free World's. stockpile and the, Gpeed?with which re-
placement materials could be developed. Silk waste is used for cartridge
or gun powder bags because it leaves no residue in the gun after comtustios-
For this purpose 33 percent raw silk may be combined with waste, 'but 100
percent raw silk bags arc technically unsatisfactory. There ard no other
known satisfactory substitutes for silk waste powderibags. There have
been continuing experiments with replaceMent materials. Some success has
been attained in experiments with?speciall;7?processed cotton bags, but .
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Appendix 7
4 -
5ECRW
fieli tests are still needed to determine their practicality under combat
conditions. Apparently, a satisfactory substitute for silk waste in powc?,
-bags la still some years avay.
World production of cocoons could- be expanded considerably but
generally at the expense of food-production. japan the principal pr
ducing country, no produces annually only about one-fir h of her p.kowar ?
(1938) production of over 43,000 metric tone. Japas current plane call
for7a. modest expansion in production. Prior to 1950 it WES more profitable
for Japanese /afters to raise food crops than to engage in?ei: iculturo. ;rhe
reverse is now true and if raw silk prices are maintained at current or
higher le le, it is, reasonable to expect that larger quantities of raw silk
will be available for export from-Japan.
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.0110.`
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- 5 -
SEMET
THE FAR EAST
Vforld.Ewports of Rad. Silk, by Dastina
-. Average 1948-50
00,0-00020,00:00000000,100,000000*. 001,0000i0000,0,0000,00.00.0000000,0000
Appendi
DESTMATION
0000000.0,000
? : SOURCE
gaol -4, ',AMP 2.1:211.V.A
Unit:3d States. . .
.
...
.
0:
136
:
2075.1
:
220.
:
2.
:
? ?
:
.
Arun .?
.
United Kingdom . 0
0
,Td
'
31
:
607
t
20
:
43 : 701- -
Franca . 0 . 0 0 0
0
t4
41,
0
ti :
92
s
934
:
7
$
r .a . i 1 s 033
0
, : ,
:
? 92
:
T
....
.
.
n,a. : 9$
Western Garitany. 0
0
;:
77.
a
67.
a
-
n.a. : 144 ?
0100,00040,0000:0R-00:00.0.1000-0030.000-
? ....0,161,46V.......e.R,11.,..0....A01*
m0,,10,00+.0.0,0?0000050,0001.00#60,04100001011,0
Total ia. . .? 0a ? :200 - 1,100 : 28 - 43 1,971
00,-10.00,000,00.00,W1000010,00,40.00,1*,000,002000,0*".
0
0 -
. .
?,- . 1 t
'',: 133 a. 530. ; I g n0a. a. 664
India and Pakistan . . . . ,: . 20c) i 220 g U.7 n0a. a 546
0
ri 7, Ei,' a .
. 319
Emit IA 0 ..) . (2. 0 G., ?-) ''''. .0 0: . 57 a 220 : 4,.
31 a . 1.i. . fte.. 99
Brazil,. io000G0 0 o o . g 3 a /0 , ; ,i. . .
..111 naa0 :
Te-ml, 0thE.17,' lion.;Carimmist a 402 : 4011 -: r 228 -g ? - ?,,, 1,641
. CO3,,S.V0WV.E.I....411?VOVPIIMMINOMIIVAZIRPM1rPLI?erElt,11..2.B*1.?,,./1.rieAr,OrinliO,
- Loalg.L.9:20'.2.2,t; o
?
? Poland 0 0 :i 000000 0 .; 5 ; - :a - -
. noz , : r 5
? U..S. S. R. . ...... .t . . ... t 78 a n.o. a 78
00.00000000 00,40.00,0000000000,00,0001,00010001,000001002010010.00.001001,0100,04,00.0.00,R00,006000,00100,0000,6000
'
'Jtal So- t Orbit . ? 0:
Not Srecifiod. ? g
Total Exports. . 0,. ? 0:
78. :
rarilt,...10/......I0U.SOLZW,M...........A..IM?.S*4...eFf1C.141617M
92 : 171 : 6 : n?a. t 269
.1xL,U00'VIRR,00,Rr.:00e0jLBV:00,0?000t0x0s,nRmJ0:0,000aC010000,Cra000AS00*0,0A0RnRRn0,00ne0,0'on
?
80 0
35 3 4957" : 45 6,397 -
40100000.0.00000000100000010,0000010M010000000,00001 ....1,0000.00.00.00000 0,004,00,00,00*? *01,000,0,0000m0000,0.00,00
Tnoludes re-exports.
2/ Countries other than the United State 6 and the .United Kingdom - 1950 -on1v.
0m.ntr:I.es other than the United States and the United Kingdom 1947-4g
averato,
- Not avallable. .
L
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'4) '
SPflRE7'
. THE FAR EAST
Table 2e World Exports of Silk Waste and Noils
by Searce and Destination, Average 1948-50
Appendix 7
trainNtroCanliallt.......?,ffraqtemparsgrzatansames-nvo.
DESTINATION
a
China'
..r.Onlossubmammorn4-E.
United States. .. .
glim
?
.
.
:
: ''
:
302.
18
:
:
:
.United Kingdom .
11'.z.anco ...?
106
:
Italy. .. . . 6 0
a
:.
54
, :
Belgim.- . . . .
.
:".
2.,-;5
:
Hong-Kong.,. . .
.
:
390
:
Switzeriand2 , ,
Western Germany.
.
.
:
:
51
.
.
Other Countries. .
.
:
:
.
.
Total 1/
...:
:
eter?MttcscIme.ws.atem 91:11,..nange
SOURCE
:
t..mfolienntre.
'aPan 81.
Fh:CIMaaeltenceicAllerlitaiTMcboatesaCM
U.S .S .R
rsoarnacre. ?
Others
46 47
309
6
3
.0.01M14.111.12111ROTZIrill?
14
:
?
:
2
,
:.
:
-
2
e
,2,4

40
. 105
-
:
?
81
:
304'
-
:,
. 3
I:
_ : - :
- : 110 :
:. 119 :
:
:
:
23
sat, 0.11
For countries other than the United States. and. United Kingdom, average'
for 194849 only.
Including re-exports.
Since all figures notetriotly camparable. no totals are shown.
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?
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Security Informateen
The Par
Appendix 8
er
Sifrtareetee of Par atWor1di,tter Sappl
e only butte nrplus producing =entries in the Par t are Luetrelinand
New Zeeland. Together, they produced out 50 p rcent of the orld, =portable
supply of butter during 1950 Annual exports in /950 total about 2220000
tric tons. Of this total, about 203,000 metric tonal) at nearly 92 percent,
t to the United Xingdoi less than 40000 etric to or 2 percent, went to other
ande Ism than 150000 c.Ltric tone,
or 7 percent0 went to all other
en-communist countries. Only 2 tons wt to Soviet orbit countries.
United-States dependence on Oceania
The United States, itself an exporter of butter on a verY snail seal
only negligibl imports of butter in recent years and is not dependent
Par stern sources.
Allied de cadence an the Par t
Of our allies, only the United Kingdom le an important customer of Oceania.
e United Kingdom has import an anneal average of slightly over 2000000 ietric
tone of butter during /950 and the three year period 1948-50 from the Oceanic c triep,
'LJa Lewes ti nearly 75 percent of the ited Kingdom s total butter imports and
more than 90 percent of the total butter exports of ustralia and New Zealand. This
relationship is expected to continue, barring drastic Changes in the world situation,
due to the lengrterm butter contracts between the United Kingdom and Austrslia and
Eau Zenland.
Other non Communist area d =deuce on the Par East'
Of the total butter exports of /Australia and New Zealand, less t 15,000
metric tons, Or 1 es than 7 percent, vent to other 'nen-Communist areas. Of thie
amount, ler Eastern countries took 60500 tons; the Bear and Xiddl et took 20000
the Western Hemisphere took:nearly 4,000 tons; and Africa took:nearly 20000 tons.
In the rar Ehste the major cunto en re Singapore e Ma'am R*Pkgrsono and OW
In the cear and Middle st, th maj r Importer were Iran and . In the Western
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Security Information
Appendix 8
sphere, the major Import re Imre the SeAltroionies and po sessions.
in ) the Jo* Importers was the Union of South Africa.
: The loss of the tter supply of Australia and New Zealand would be of jor
importance to the United ngd and of'mi r importance to the other sill
non7d unist countries. The only other major otter sportee to the United ingdom
le Denmark whiCh sends 75 percent of its exportabl surpl to the Unit liftlamw
now, and thus supplies about 25 percent of the United Xlmgdomps butt import
requironents, e ear other major rtter *porter is the etherlands which has
total butter exports of lee than 20 percent of the United Kingdonqs import Swedes
and whiCh at present export ay to Belgium, 1Miteer1and, Westorn,Gormany.
e only other major batter producing co tries are the United States and India,
Ither of which has or I expected to we any significant surplus of rtter
for export. Thus, if the tter supply of Australia and New Zealand were lost,
it could only anb ititad f a. ma4or diversion of fluid milk or mak from
other mos, into ttermilk, or by Major increase in the production of garine
from edible fete and olls.
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QS, .1?Po Mels. CC.
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Table la Batters ts from Oceania by Destinations 1950
4.
Appendix 8
Destinatiot
United States and Possessions
ALiesg
3
Net Zea r
metric
lErgeleII.T.
Pc
tukenteress.aiameneranao
United Ki.ngdom
699192
134,066
2039258
Japan
47
69
116
Germanys Western
102
518
620
Other NAM
Fr ce
17
28032
28049
? Italy
492
508
18000
Netherlands
Total Other -14A.1O
14
523
......
20540
14
30063
Total Allies
690664
1370193
2078057
Other non-Coamnmist
Far East