Tobacco
Media
Part of The American Chamber of Commerce Journal
- Title
- Tobacco
- Creator
- The Conde de Churruca
- Language
- English
- Source
- The American Chamber of Commerce Journal Volume XXV (No. 7) July 1949
- Year
- 1949
- Rights
-
- Fulltext
- 300 AMERICAN CHAMBER OF COMMERCE JOURNAL July, 1949 The SCAP fiscal year ends June 30, and as the funds available for purchasing abaca have been fair ly well depleted, it has bought rather less during the period than usual, despite the reduced prices asked by exporters. During the first half of the period there was some demand from Europe for June shipment to complete ECA allocations for the first half of the year. Once this demand was filled, European interest faded away, and at the time of writing, a weak and uninterested market rules in London. In the Philippines, the market declined on the average about P2.50 a picul, in line with reduced prices in consuming markets. Provincial dealers, however, continue reluctant to accept lower prices, and talk up the angle of small production. What pro ducers fail to take into account is the fact that abaca cannot escape the general deflation of all raw mate rials. At the close of the period, provincial markets became distinctly nervous and sellers began to lower their ideas. The following figures give an indication of the price changes recorded during the month: Philippine provincial quotations, June 15: Per Picul Basis Loose Davao I . . . . P61.00—Down P3.00 per picul from May 15. Davao Jl . . . P60.00—Down P2.50 ” ” ” ” ” Davao G . . . P53.00—Down P2.50 ” " ” ” ” Non-Davao I . P62.50—Down P3.00 ” ” ” ” ” Non-Davao G . P45.00—Down P3.00 ” ” ” ” ” Non-Davao K . P27.50—Down Pl.50 ” ” ” ” ” New York quotations, June 15: Per lb. c.i.f. New York Davao I . . . . 2814< * —Down per lb. from May 15. Davao Jl . . . 27 —Down 3/4<f ” ” ” ” ” Davao G . . . . 25<# —Down V2<- ” ” ” ” ” Non-Davao I . 2814( * —Down ” ” ” ” ” Non-Davao G. 21%i*—Down ” ” ” ” ” Non-Davao K. 15<? —Down ” " ” ” ” Production for May, 1949, was 41,174 bales—a decrease of 6,949 bales from April, 1949. Non—Davao balings totaled 22,907 bales—down 6,791 bales from April. Davao balings were 18,267 bales—down 158 bales from April. Exports for May amounted to 38,986 bales. Production for the first five months of the year amounted to 235,794 bales, against exports of 220,965 bales for the same period. Tobacco By the Conde de Churruca President, Manila Tobacco Association ON the 10th of this month (June), Secretary of Industry and Commerce Balmaceda and Sugar Quota Administrator Bunuan held a special meeting with businessmen to discuss the export sit uation and the possibility of filling the Philippine ex port quotas, some of which have hardly been used at all. Two points were unanimously brought forward; the present high cost of production and the high shipping rates which combined make competition in Jo Help tya technical and business magazines Every day alert industrial men and engineers all over the world are finding in the following tech nical journals the kind of information they need to increase production, reduce costs, and improve ■The ,-Hill DIGEST, an _ monthly publication (1 yr.—P10.00; 3 yrs.-P20.00) can be particularly valuable to you. This compact, interesting “Digest” is more than just another magazine—it is a service. A service restricted to overseas ibers and designed to keep iers in contact with the world-wide developments *, industry, The Magazines of the World — At One Place — At One Store! Prompt, dependable subscription service. TEL. 3*22-51 TANDUAY AT VERGARA QULAPO, MANILA July, 1U49 AMERICAN CHAMBER OF COMMERCE JOURNAL 301 foreign markets practically impossible for some producers. In the case of a manufactured product like cigars, the high cost of labor is an especially import ant factor, the more so as the time is not judged ripe for the introduction of a greater mechanization. The situation will remain difficult at least until the price of rice has been sufficiently reduced. Rice plays a double role in the tobacco industry because the to bacco planter, when the price of rice is high, has either to sell his tobacco at a higher price to live or to devote a larger part of his land and time to raising rice himself. At that, he is in a much better posi tion than the workers in the factories who have only their wages to depend on. And if the price of native tobacco is high, the tobacco factories find it more difficult to compete not only with imported cigarettes but with imported leaf. There are so many workers involved that their fate must be taken into consideration if the price of native tobacco remains as high as it has during the past few years. As to the quota situation, the factories now in operation have the capacity to fill their individual quotas, but there are a number of non-operating fac tories which together hold more than one-half of the total quota. The figures follow: Cia. Gral. de Tabacos de Filipinas . Quota: La Flor de la Isabela ........................ ” La Colonial ........................................... ” La Alhambra ...................................... ” 31,255,534 cigars 58,227 804,535 29,369,257 Those not in operation: Helena Cigar Factory ..................... El Oriente ........................................ La Flor de Intal ............................. La Yebana ........................................ Quota: 123,803,897 cigars ” 2,378,434 ” 760,917 ” 804,535 ” Total-Quota: 127,747,883 cigars It will be seen that the operating factories cover around 30% of the quota, (which amounts to about 200,000,000 cigars) so it is obvious that the quotas owned by factories that could not employ them even if conditions were favorable, represent 70% of the total. Leaf and Stripped Tobacco As per Order No. 27 of the Quota Administra tion, dated January 17, 1947, the yearly quota is dis tributed as follows: Helena Cigar Factory .............................. 1,794,124 Alhambra Cigar and Cigarette Factory 1,376,909 Aguado Hermanos .................................... 53,667 Bunning & Co., Inc...................................... 2,201,542 Go Fay & Co............................................... 113,311 Manila Tobacco Trading ......................... 824,637 Minerva ...................................................... 20,653 By Mail ...................................................... 1 Government Disposition ........................... 115,156 6,500,000 Total - Quota: 61,487,553 cigars 302 ___________ AMERICAN CHAMBER OF COMMERCE JOURNAL July, 1949 Against these quotas the following shipments were made: ,19.'f7 19 W 1.9419 Total . Helena Cigar Factory . Alhambra Cigar and 336,495 28,128 22 364,645 Cigarette Factory . .. 3 — — 3 Aguado Hermanos ....... — — Bunning & Co., Inc. ... 817,907 186,096 330,605 1,334,608 Go Fay & Co................. — — — — Manila Tobacco Trading 13,500 — — 13,500 Minerva ......................... — — — — By Mail ......................... — — — — Government Disposition . 53 9 1,000 1,062 TOTAL SHIPPED. 1,713,818 From this it can be seen that in about 2% years during which a total of 16,250,000 lbs. should have been shipped in order to fully cover the quota, only 1,713,818 lbs. were delivered, or 10.55% of the total. The reasons for the inability of the quota holders to fill their quotas were: You’ll aenee something differ ent when your fingers touch the highly responsive keys. It’s Rhythm Touch... to make your type writing easier. Your fingers will find comforting ease in the light ning key response. 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In other words, Philippine tobacco priced itself out of the American market. 2. Ocean freight charges were increased to such an ex tent that the charges to the U.S. East Coast are now 40% higher than those to European North Atlantic ports, which fact contributed to the high c.i.f. costs which Philippine pro ducers had to ask for their stripped tobacco. 3. Stripped tobacco pays 3 different government fees: a. P0.50 per .100 kilos Internal Revenue Inspection fee before the tobacco is stripped. b. P1.00 per .100 kilos Internal Revenue Inspection fee when the stripped tobacco is exported. c. P0.55 per .100 kilos License fee to the Philippine Sugar Administration. The outlook for covering the quota for 1949 ia not encouraging. Advance information received from United States buyers indicates a substantial reduction in prices w,hich would force the Philippine producers of stripped tobacco to buy at considerably lower prices than last year. Whether this will be possible, is dif ficult to say at this moment. As every quota holder, old or new, has to face the foregoing facts, we believe that the inability to cover the entire quota, or a large part of it, cannot be met simply by a redistribution of the quotas, but only by adjusting the price of leaf-tobacco to the real ities of the world market. Food Products By C. G. Herdman Director, Trading Division Marsman & Company, Inc. THE principal item of interest in imported food stuffs at present is the very heavy arrivals of wheat flour and canned milk in the Islands dur ing the month of June. Visible flour stocks today are sufficient to cover consumers’ requirements until the end of September at least. The market is very heavily overstocked. There has been very little ordering done by importers these several weeks and it is unlikely there will be any ordering in volume before late August. The very considerable disparity in price be tween Canadian and American flour is also to be noted. Canadian flours are being offered, after making allowance for Customs import duty, at prices from $0.25 to $0.50 per 100 pounds cheaper than equivalent American grades. The government loan value on wheat in the United States maintains an artificial price so much higher than in other wheat-producing countries that American export flours are being priced out of the market, and unless some method of subsidy or other protection for American flour exporters is arranged, it is apparent that a very large portion of the business they have previously enjoyed will pass to Canada. As regards canned milk, the stock situation is very much the same as in flour. There have been