The Rice industry

Media

Part of The American Chamber of Commerce Journal

Title: The Rice industry
Creator: Hill, Percy A.
Language: English
Year: 1928
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Fulltext: 34 THE AMERICAN CHAMBER OF COMMERCE JOURNAL October, 1928 THE RICE INDUSTRY REVIEW OF THE HEMP MARKET By Percy A. Hill By L L. Spellman of Muiioz, Xucra Ecija, Director, Riee Producers’ Association Macleod and Company Prices for both rice and palay have taken an advance in view of the dwindling supply. Prices for rice range from P8 to P9.20 per sack (ex-car) according to class, with palay at terminals at from P3.25 to P3.60 according to grade. These prices are substantially higher than those of the same period last year, and point to a healthychange in values. As previously pointed out, the present rice crop was never in any danger during the first period of growth. While the amount of rain was approximately 150 millimeters lower than normal, its distribution was too even to allow of excellent planting conditions. As a result, about 22,000 hectares in the Luzon plain either remain unplanted or were planted too late. The dwindling supply of stocks, visible and invisible, bears out the estimate made of the last crop. With carryover exhausted, and a new crop still unmade, prices have taken the upward trend they should have taken some months ago. There has recently been made a number of proposals as to the rice industry by legislators, with a view primarily of enhancing the price. The advocation of exports, the prohibition of imports, and the raising of the present tariff were examples of proposed aid by those unfamil iar with the status of the industry. As a corol lary to the importations, it may be noted that prices did not rise until the first imports of the year of any magnitude arrived. And the price, instead of falling, will have a tendency to rise until the estimates of the next crop are in. Cargoes of rice from Indo-Asia have come in, principally to thq southern islands, while the plague in French Indoch;na necessitates the fumigation of the cargoes, according to quaran tine regulations, which can only be affected in Manila or Cebu. It is not known if this will affect the rice in cargo. Stocks in Indo-Asia, while lowered, allow of an ample surplus avail able at present writing. The spread of the prices of rice in the Philip pines is still very remarkable, considering the growth of transportation lines. Interisland freights are high, due to the high wages paid. The shipping business, as regards freights and monopoly, has drifted back to that obtaining in the old galleon tiade, but there appears to be some renaissance in expediting shipments. The railroad, while lowering passenger rates to meet competition, has not done so with freight rates. They will have to face competition in this line also if the plans of the truck companies work out. To show the differences in prices of palay (rough rice) as quoted for last year the following may be pertinent as regards freights, which affect them in the main. The Nueva Ecija and Tarlac prices averaged P3.23 per cavan. In Ilocos Norte it was P6.74; in Tayabas, P6.23; in Union, P5.76; Iloilo, P4.60; Negros, ^4.42; Cagayan, P4.94; and in the Batanes, P7.89—all per cavan of 44 kilos. There is need of coordination in handling to equalize prices. This does not imply that the difference means inordinate gains, but that the present system of distribution is wasteful and inefficient. It must not be forgotten that the ultimate distributor pays the 1*^% merchants tax, which is passed on to the consumer, falling heavier on him than on any other entity, being a tax on a vital necessity. In any amelioration of the industry, the above should be the first things looked after if pro ducers’ and consumers’ interests are taken as a whole, as they should be in the last analysis. In reference to the attempts unnaturally to en hance prices by unwise legislation, we may add that the status of the industry is improving, as regards price, under the good old laws of supply and demand, which often runs in cycles. This report covers Manila hemp markets for the month of Sep tember with statistics for the same period. U. S. Grades: The buyers in the United States and Canada con tinue to buy only moder ate quantities, and neg lect the higher grades almost entirely. Of late they have purchased a considerable quantity of J 2 and LI, together with some of the other U.K. grades. Shipments to date are a little more than 20,000 bales less than a year ago. The early part of the month shippers were offering at the following prices: (Cents per pound) E, 13-1,4; F, 10-3,8; G, 8-3, 8; H, 7-1,8; I, 9-7,8; JI, 9-1,8; SI, 10-1,4; S2, 9-3, 4; S3, 9-1, 8. By the 15th prices had declined to E, 13; F, 10-1,8; G, 8; H, 6-1,2; I, 9-3, 4; JI, 8-1, 2, SI, 10; S2, 9-1,2; S3, 8-1/2. At the end of the month shippers were asking E, 13; F, 10; G, 7-7,8; H, 6-3,8; I, 9-1/2; JI, 8; SI, 9-3,4; S2, 9-1,4; S3, 8-/14, and undoubtedly prices could be shaded from an eighth to a quarter of a cent on some of the grades. The net loss for the month was a quarter of a cent on better grades and almost a cent a pound on the lower grades. The de crease in the production of the better grades un doubtedly accounts for the fact that prices have not declined to the same extent as on the other grades of fibre. The market in Manila has followed the trend of the consuming markets. Throughout the month prices paid here remained considerably higher than the selling equivalent. The market opened with buyers paying: (Pesos per picul) E, 30.00; F, 23.25; G, 18.25; H, 15.25; I, 21.75; JI, 20.50; SI, 22.50; S2, 21.25; S3, 20.00. By the middle of the month prices had dropped to E, 29.50; F, 22.00; G, 17.00; H, 14.00; I, 21.00; JI, 19.00; SI, 21.50; S2, 20.50; S3, 19.00; and at the close exporters were quoting E, 29.00; F, 21.50; G, 16.75; H, 13.75; I, 20.50; JI, 17.00; SI, 21.00; S2, 20.50; S3, 17.50. Dealers and brokers have resisted the decline, and a fail quantity of hemp is still unsold, and a fair per centage has gone into store awaiting better prices. U. K. Grades: The London market has remained quiet throughout the month with prices still declining. Spinners in the U. K. and on the Continent continue to buy steadily but at only reduced prices. The London dealers are apparently well supplied for shipments up to the end of the year, and seem to be interested only in distant hemp. The first of the month shippers were selling at the following prices: (Pounds Sterling per ton) J2, 36-5; K, 31-6; LI, 30-15; L2, 25-5; Ml, 26-10; M2, 25-0; DI, 24-10; DM, 23-10. By the 15th the market had declined to J2, 35-10; K, 30-10; LI, 30-0; L2, 25-0; Ml, 26-5; M2, 24-10; DI, 23-15; DM, 23-00; and by the end of the month sales were being made at the following prices: J2, 32-10; K, 29-10; LI, 29-0; L2, 24-0; Ml, 25-0; M2, 23-0; DL, 22-10; DM, 22-0. The net decline for the month averaged a little more than two pounds a ton, the heaviest decline being on the grade J2. In this market the lower grades have declined steadily, but selling prices have remained above the equivalent in the consuming markets. The range of prices paid during the month are as follows: (Pesos per picul) J2, 17.00; K, 13.50; LI, 13.50; L2, 11.50; Ml, 11.50; M2, 11.00; DL, 10.50; DM, 10.00; by the 15th J2, 16.25; K, 13.25; LI, 13.00; L2, 10.50; Ml, 10.50; M2, 10.00; DL, 9.50; DM, 9.00; and at the close J2, 15.00; K, 13.00; LI, 12.75; L2, 10.25; Ml, 10.50; M2, 10.00; DL, 9.00; DM, 8.50. It looks as if prices will decline further as sales are being made in London at from fifty cents to a peso per picul below quotations. Japan: Exchange has improved but the market continues dull and inactive. It is reported there are considerable stocks of unsold hemp remaining at several of the ports. Ship ments to Japan are more than 41,000 bales in excess of last year, and it is thought the spinners and paper makers have not been able to take care of this additional quantity. Freight Rates: There was no change during the month. The local cordage manufacturers are asking the Associated Freight Lines to change the basis on rope from measurements to weight. This seems to be a very reasonable request, and should be to the advantage of both' the cordage manufacturers and the steamship lines as it would save an enormous amount of time in calculating freight charges. Statistics: We give below figures for the period ending September 30th, 1928: Manila Hemp 1928 1927 On hand January 1st. . . . Receipts to date................ Supply to date............... Shipment to U. K............. Shipments to Continent.. Shipments to U. S............. Shipments to Japan......... Shipments to all others. . Local consumption........... Total shipments............ 139,624 1,035,093 112,382 974,026 1,174,717 1,086,408 259,441 246,038 154,272 105,430 282,967 303,133 235,889 194,494 37,720 38,860 44,000 40,000 1,014,289 927,955 Supplies for the year are 88,309 bales over 1927, while shipments are 86,334 bales more than a year ago. This leaves stocks in the Philippines practically the same as 1927. Some very effective legislation is in prospect, though practically none has passed both houses as yet. With a treasury balance of Pl5,000,000 (officially reported as eight), and the necessity to develop Mindanao, what will be done for public works is likely to be very surprising. A bridge fund is contemplated, reimbursable from tolls, to take care of the big-river-bridge projects indefi nitely ; and a goodly sum is probably to be voted for the Bumham capitol project in Manila. P. O. Box 131 Manila, P. I. TOWLINE BRAND High Quality Pure Manila Rope CROWN BRAND Good Quality Pure Manila Rope PLOW BRAND Mixed Fiber Rope Low in Price DRAGON BRAND Made of Pure Philippine Maguey Ask for Prices IN RESPONDING TO ADVERTISEMENTS PLEASE MENTION THE AMERICAN CHAMBER OF COMMERCE JOURNAL