ECONOMIC NEWS & DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R007400610008-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 18
• Document Creation Date: December 19, 2016
• Document Release Date: March 10, 2006
• Sequence Number: 8
• Publication Date: February 9, 1951
• Content Type: NSPR

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Soil Mart Exceedtn ly Active.
Owint, ' to the heavy demand' of the k,'uropean firms, the foreir;n sales of tuwtssit
continued to be active. 530 tons were transacted within the week ended Neb. 4.
Other vegetable oils continued, to enjoy heavy demand,
due to the existin,; short supply. (T.K-P 4/2/151)
Sheet Glass Stock Low.
HK glass market witnessed an unp recede4ted quietness either in overseas sales or
in retail. The sources of supply for HK ,lass market are China, France and'Czechoslova-
kia. In recent,months, supplies were slow in.cominv and this results in the present-
exceedint;ly low stock.
Apart.from local consumption, sheet glass ore usually shipped nut for sales in South
Sea Islands and South Africa. In the past year, because of the weak demand of the. above
two areas, sales here ciuninishod 6reetly, and the prices remained staznant. At present,
,}Yao Hwa and. Czech takes sell at Hk02 and HK,33 per box respectively.
There are however,,tood reasons for the glass market resuming hi.,;h activities. 'hese
are: 1) Both French and Czech supplies are on the decrease bemuse the dealers have in the
past ;;reatly cut their orders for the same and also because the supplies in the future will
? remain to be scant. 2) `1Ohe market ca n only look to the supply by the Yao Hwa;Glass Manu-
facturir.; Co. 6) Owink, to the recent appreciation of the dill' the export prices of the
Yao liwa make will certainly oe -higher. i3ecause of the low stock prevailir_;, there is
nevertheless good prospect for sales. (T.K.P. 9/2/151)
World Demand & Supply.
US Commodit ry Markets heview
NY. 'rice trends mixed in major commodity futures trading:; February 1 and 2.
SOY.1i- N OIL, 60Yid3BANS, i.YL, COCO4,, irregular, Future dealink,s on COTTON& D OIL
HLZS, a1OOL, CO'TTC)N & t3LhCri P1~P1'Ett suspended since ,eneral price freeze order. SUGlut:
Trading held up. Future prices raised 6 to 10 points. Spot price of world sugar ,advanced
5 points to 4.95c fob. Cuba on mood trauirk;. 13LACK PJaiE1,: Market quiet, participation
restricted pendirk,,further price devel opments. COTTON: Actively quiet, Reports of a re-
vision of price regulation order that may he issued momentarily, but no hint as to what form
it might take. 400L: market .quiet. 3uyers taking only small lots out of picked-over
assortments, Inquiries from yarn spinners and weavers dropped off remarkably, Tradix
in Boston market slight, dealers awaitinE clarification of price freeze order. CHEMICALSI
Juices on fine chemicals generally firm. Heavy chemicals featured by generally strong
tone with producer prices still firm at maxium levels previously in force. ESSENTIAL OILS:
Since price trend has been continually upward in face of a;enerally strong statistical posi-
tion, as well as hih replacement costs of many import ,,,d items, price. rej,ulations have
eliminated actual channes in spot quotations for the moment, Supplies light and many housee
have not been able to ;et ample quantities of some oils despite willingness to pay fancy
prices for replacements.. ITALS: No new developments in copper markets. bead supplies
li;;ht and buyers find it exceedingly hard to fill requirements. Foreign demand also been
in excess of available supplies. Export ..price, 18.50c fas, Gulf ports. Domestic lead
quoted at 17.0Oc, SY. St Louis zinc rices firm; consumers seeking February, zinc paying
premiums to et the metal. Forei,;n consumers have Leo beenlookinei for zinc, offering "to
3jay as. much as 28c lb, fas, Gulf ports. Vroducers price frozen at 17*c. Price. for Grade
A tin for prompt delivery has been held at wl.83 lb., while, price freeze makes it impossible
for tin importers to do prompt business, it`does not prevent the Government from selling;
pro:tpt Grade A tin each day. Tin market generally quiet pendin. developments as a result
9 of price freosWpprolveodito 419819 i6g1 17~ 6IR- 0*t45OR@OF4&16Ao06&bB, March.
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Iron and Steels Confusion has resulted in trade since price Freese and both buyers
and sellers limitirk sales pendinL; the pdLtoome of price freeze. (Y/.M.h. 3/2/151)
The hire in Wholesale Prices in UK
,A survey of the course of wholesale prices in 1950 in the Board of Trade Journal
brims out the bif; contrast between the rises in basic materials and those at later
stages of production. The bass materials index refe_-rd the sharp rises which ~lIook
place in raw wool and cotton, or ro ;.s metals) '% berry h -'.des and skins, wood pu 414:x.
etc. It rose from 307.3 913 :.00) to 5r .4, an 'r reise of 84.6%o on the year. By contract. the rise in the indey of manuf,,c turod ar , cs whicl^ rie urea chant os in prices
of such items as finished steel., e other ecc , rot of j;,oodu at the final sta, e of manufactur
was no more than 7.5`0. Thou,.,h modes, to by Comparison with the movements for basic materi,,,
this was nevertheless bi,;,er than the 5~9jo rise recorded in 1949. Most of the rise in the
index took place in the second half of the yevr. Even sb 'the rise only partially reflbct-
ed the ingluence of the hi,_hor raw ma to dial ~x.ices 9 this may ~ be expected r la e t to raise
the prices of manufactures still further. The net result is that the index of industrial
materials and manufactures combined advanced uy 28.9%6 which compares with 4.4 ~ over the
pr:cedin,, yecr and is in fact the bi,_;est rise since the index in its present form was be-
,run. On the other hand, food and tobacco showed a smaller increase than durini 1949 -
7.8% a,.;ainst 19;%. Thus the price index for all articles rose by 21.3% durin, 1950, the
bi~
_~est rise in tea years.
The rise in prices Was particularly steep from May or June onwards, when the effects
of the Korean war bean to be felt. This was particularly true of non-ferrous metals
which after, advancin," 20`/o betw.:en December, 1949 and June, 1950, nearly doubled the rate
of pro6ression in the suceedinc; six months with a jump of 396/%O. Apart from a sli,ht fal-
term in February and June, the price of raw wool rose more and more, steeply, through out
the ycoor, and the index for the wool%;:roup pis a whole rose ay 117/ compared with the end
of 1949 and by 68510 compared with 1938. The next heaviest increase over pre-wt r levels
was in the cotton croup, 5o1%. (L.T. 3/2/'51)
US Market Conditions of Chinese rod.ucts
Followin,; the freezing; reL_,ulations, the market for Chinese products here almost come-,
to a standstill. The price of woodoil remains around 39c, but nonu is being offered.
Anybocly who has Chinese U'ristlQs is nova holdinL; the goods and prices become somewhat nomial
It is reported Shan~,hai bristles No. 17 se.,.ls over ,,5.00, while Tientsin No. 55 short aroun
ai9.50. The, price of Chinese Menthol crystals has advanced to around al4,00c C & F. Thor
has been a report of Chinese cotton waste :Ely No. 1 traces selling; around 23c per lb. The
price of hr;irnets has also advanced by 30Gjo. No trc nsaction has been heard on Chinese Sil.;
but according; to the Japanese silk prices. size 20-22 should sell around i4,30 for Grr{de C.
/hilt goods continue -co come from HIi, volume has been conaiderably reduced. The sup.
plier is required to make a statement that no national of Communist China has had any in-
terest in the merchandise since December 17, 1950, and as time ; oes by this state,iient is
becoming; more and more difficult to rilake. If the .'ar Eastern situation becomes worse it
is likely that very little will come out of that and this factor accounts. a great deal why
people are refusing; to sell any Chinese merchandise now in their hands. (our own corresia
pondence)..
Tea
The v/orld Supply ~of Tea. The main points of the London Auctions Plan are that the kin
tech 1rovornrnent will not enter into any more bulk purchase contracts unless international
conditions require a change of their present plans. The producing countries have tentativ,
ly agreed to allow, approximately the seine which have shipped to London, duri.,; the last few
years, to be shipped there for sale in the London auction, but they will retain an ample
supply for their own auctions. lcationin,, and subsidies will be continued. , This move is
a step in the right direction, but it is a pity thfnt.they did not remove subsidies and ra-
tionin6 at the sane time, for this will cause a further upset in the industry at some future
crate. In so far as the outmarkets are concerned, this reopenirv; of the London auctions
will have a - st'bi; effect on all m rkets as London buyers will be permitted to operate:
the >rimary arkets a-u the ia rmwsoww ~ om London of
an d isiraule o z I 'ts.
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1)urinj the 1?ast tiro worths, a series of disastrous earthquake and tremors have taken
place in ' ksasm. gonsiti.arsble dsmaye has been caused in Upper Assam to the dryin_ sheds,
factories, labs ors' houses, and other buildings but only sli,;ht d?amade to the ten bushv;;.F
themselves.
:There has been a strike of all estate labour in Indonesia which lasted some six weeks
a nd for a time all production was stopped, not only tea ostc:tes but all a,,ricultural pro-
duction was effected. The strike h..s. been settled ;anu small quantities of tea are inovin,
forward. The amount of crop which has been lost has not been determined, althouLh it is
believed to' be about one million pounds. weekly.
As can be seen from these reeie rks, it is not expedteo. thr:t tai:the India or Indonesia
will show any increase in crop durin6 the current year, but there is an ia.ticaiion that
Ceylon will show a subst;intial increase `ii the pree nt 'crop rate is remained. Given
reasonable weather conditions for the remainder of"the'year, this crop may increase by
about 22 million labs over last year brin,inn"the production to 320m lbs.
The British contract with Ceylon this year `until (larch 1951, but this increase should
enable many of the tonder:rs to that contta6t to complt-te their deliveries well before the
final date, and allow the rowers to auctiofa in `Colombo as much b f the fine tea as they did
this year durinv the quality period of January to March. It is now almost three years
since the London art: permitted to do so and can afford to pay the prices ruling, the London
buyers will be most anxious to take advanta,e of this opportunity and cprrate on the Colom-
bo market for.shipment.to London.
Turnip to the supply position, the aver?,,,e world supply of tea durint; the years, 1934
-8.w?as 981 m. The annually and it was not until 1947 that this figure was duplicated and in
1948 for the first time over one billion lbs were produced.
World Tea Supply - 1949 (Pound)
North & South India ...:..............586,100,000
Ceylon ..................>......'.....298,500,000.
Indonesia ?..e.r..s.....rr.......r....61,400,000
'akistan .............................46,300,000
hfrica ...............................34,000,000
Japan p....9 ................... ,........15, 800,000 _
F moan .. ? .. , ..... 9 .. Pa.** 9 .......... . 10 , 400 , OW
China ...,.....i.........-...........114,VW,OOO
Other Countries ..................... 5,000,000
Total 1,093,000,000
*Exports only.
The averae,e world absorption from 1934 to 1938 was 976 million lbs annually, and it
was not until 1948 that this figure was duplicated and we now-see that in mark for the
first time.
Pounds
UK ..........................469,100,000
America .. .....................144,600,000
Arica ............. 0...0.....100,000,000
Asia ......................... 65,000,000
Australia .........>.......... 58,800,000
1)urope. .......................57,900,000
U$3h . . ..............on was, export to Korsvi dropped
tahrarply. The result was that in July total export of plate glass was only `,000 boxes,
in August 6,0(x) boxes, in September 0,000 boxes, and in October 7,000 boxes,
In !November, export zoomed to 24,000 boxes, and the FOB prices rose from b4.30 per
box in Au, ust to 45.:L0 in. iovsmber. This is the result of world-wide armament expansion
which reduced export of Europe and wnerica and made Southeast Asia countric:o more depen-
,ent on Japan for supply of plate ;;loss. Formosa is expected to continuo import of
epanese plate ;la:os ub>dor the Japan-F?orinooa txa,re adreemezlt. Also there time an order
of 200,000 boxes from Indonesia .
While 3,`.;00,000 boxes wore manufactured for 1950, 4,100,000 boxes are +tated for
1951. But glass output depends lar;;ely on the import of saltpeter,, and vi(ail materials.
F.C. 15/l/''51)
Cotton and Cotton Goods.
Will Jav>rin's Spinnirk, Boom !cast much Lo er? Production of cotton yarn and cloth
fait a postwar hi,;h last October in Japan. or'ty-spinniria companies producc!d in October
is pproximat a lbs over the
previous m t t< l~Tiuut tr '700 ~ y~rdsro bb ~ f ~ c00d1 QQ0
s VU
same month, s.howinE, an increase of 3,350,000 square yards over the previous month.
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October witnessed tho exl)rrt of over 100,000,000 square yards of cotton cloth.
Japan's cotton cloth export which was discouraging in the first half of last year due to
inactive trade with the sterling area remarkably picked up later. As a result Japan ex-
ported last year just about 1,100 ,000,000 square yards of cotton cloth, leading all other
countries in the export of cotton goods.
Reasons for Boom. The first ca use is, no doubt, the postwar upsurge of demand
which wwas suppressed durirte, the waxDemand became 'effective as trade returned to
normal, in normal years, export. of cotton egoods comes to a stand-still for several
i ioxrths durtriu- the rainy season., Last year, however, export did not slow down even
during the usually dull season? In the :0_?rst six months of last year, cotton yarns
export registered a g% increase and cotton fabrics export a 38/ export rise over the
corresponding period of the previous year, This wa s possible because of a brisk
demand the world over.
Demand was further stimulated by speculative buying following the Korean War.
Together wish .a sha p_ p:r'_ue rise, the prospect of increasing ffifficuities in import from
the US and Britain stirred up specula tiara demand in the Sou:taeast Asia countries,
Therefore, onler.s for Japanese cotton goods were :Immediately booked in full for the
rest of the yearn
International Prices Soar, Under the circumstances, cotton goods prices soared.
The free prime of c.lon yam went up to `'240 000 a bale and.that cotton cloth to Y3,600
per roll !about :.0 yar d.s) _, The former rose by 78% and the latter 60? compared with
the price that prevailed before the Korean war. In comparison with the official pricer
cotton yarn price was nearly four times higher and cotton cloth price almost twi?e
higher,
A. firm trend of cotton goods prices in the foreign market favourably affected Japan's
export and contributed to its phenomenal expansion. On the oth.er hand, domestic demand
was considerably curtailed by export,A A''..ot ~E :.t of cotton -~rarn .for home consumption
la god se'; e c11. mom s aE h7 nd ~Y ~~ o iEl demand was thus trade '?o suf e'er. In free economy,
however, the price level at home air ab o d hound rdt be'ear~apar, In this sense it
is desirable that ^otton goods prices in japan be raised by higher world prices,
If raw cotton is secured, the current boom will last throughout 1951. unless the
interna tional situation undergoes as spectacu:'..ar change. Against 12,800000 spindles
Japan possessed before the war, it is to be noted, there are only- 4,000,000 spindles3
or far less than 3Balf of prewar spiAdl..eage, in Japan now.
Continuation of -the .:otton in-dust:-Ti boom will, therefore, depend solely on whether
' as she r ecuixes.
or not Japan can g c.: t as much as raw(,o1 ton
Allotment of U > ' otto_?. Decid~ir L a'Ato it is a matter of common knowledge that t
demand and supp ly of :raw ao tori is inf-_ienoed by the amount of raw cotton produced by
America, About 16,C00s00O bales of U0 co-ton is said needed to fill world demand,
However, the US fo'l loi s a policy of 1 ix- _ng her cotton producing area at 25,000,000 acres
and her cotton output at 1.3,,000,000 bales a year, This amount fluctuates depending on
crop.. Last year whin the cotton c-op was bad, the US i'roduced only in the r_eig;hboi:rhdod
of l0,000000 bales, much lesa than the target amount4 The US government exercise a
rigid, export control over raw cotton, on account of which other countries are at the
mercy of the US in the import of cotton..
The US puts aside approximately 10,000.oOO bales for home consumption and allots
the surplus, together with the amount carried over from the previous year (about 2,000-
000 bales), to different countries. The quantity she can thus spare for export can-
not by' very la. ' t
It naturally occurs that increase'in the US cotton ouput will easily solve world
cotton shortage. There is reportedly a demand among American cotton cultivators and
exporters for far increas'.:d output to get more profits from export. Incidentally the
domestic price of US fiotton is 40 cents while its export price is 60 cents. If US
boosts her cotton production, hwwever, India and other cotton producing countries will
follow suit. The result will be that the shortage will give way to over-supply.
Should this happen, the cotton industry boom will end due to lower prices of raw cotton.
As it is, there is no sign of over-supply of cotton, nor does it seem possible that
the US will trade her cotton production ceiling in the near future. Under the situation,
Us only question is how to allot the amount now available. That is why some quarters cri fortfeaUr ot?` t or Releasec20(~6~/ M7i"C~A B $ e0 o4 0e7 8$b 0 or or stockpile
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sake practicable unless very soon _the causes of irL'lation are attacked with much more
V3~,Ot12'_ a 1 T 1 G ' a _ v - E C:e:n t . 6 o I1o. Y a Has bc,'L,n done so far is by eneral aL, eemen
anyt div. 04i of t fo eep clow'r 3.r a{ ionary pressures, the Govevirfien is stir. makin
large expenditures for non-essential his and is still fa 'irk; to offer ^ny roe]. irr-
centive to the publi.s to save rather t'nr to spend its rror;,, you Bey ord -i:na pL sordid
taxo^.tion, h.i. h thouf;h it is, fal.''.s fear shot l of what it must be if the excess of in-
Goitre in the tu~nds of the consuming public is to b2 a?~sorb'eti. IL.T. ~'2 ;inosxir ivewrs.
C.r . ..... ....................... The Corrunorce 6k .finance Chronicle:.
C. 1. ...........................'1'hw Chilua Mail.
?C?Q. ............ ?............ Dail Corsuiiodity Quotations.
Economist . ...................... Tile Ejeonor;li;st.
.......................... iastcrn or. F.C.W. ....r..........,a.......lForei,,n Cornmorco Weekly.
F.E.L.k. ....................... liar lantern lconomic Iceview.
H.S. ................ , ..Honk kor>