ECONOMIC SURVEY ASIA AND THE FAR EAST 1952 OF

Economic Analysis
and Survey Branch
UNITED
DEPARTMENT
NATIONS
OF
ECONOMIC
AFFAIRS
ECONOMIC SURVEY
OF
ASIA AND THE FAR EAST
1952
Also issued as Vol. I I I , No. 3 of the
E C O N O M IC B U L L E T I N FOR A S I A A N D T H E F A R E A S T .
Prepared by the
RESEARCH AND STATISTICS DIVISION
ECONOMIC COMMISSION FOR ASIA AND THE FAR EAST
BANGKOK, 1953
ii
Price: $1.00 (U.S.)
( or e q u iv a le n t in o th e r c u rre n c ie s )
N O T E .— T h e s u b s c rib e rs to Vol. I I I o f th e E co n o m ic B u lle tin f o r A s ia
and the F a r E a s t a r e re ceiv in g th is issu e w i th o u t a d d itio n a l ch a rg e.
iii
PREFATORY NOTE
The E conom ic S u rve y of Asia and the Far East 1952 is the sixth in a series of annual economic reports prepared
by the Research and Statistics Division of the Secretariat of the Economic Commission for Asia and the F a r East.
This report, together with the quarterly Econom ic Bulletin fo r Asia and the Far East, are intended to serve the needs
of the Commission and to help in the task of reporting on world economic conditions which the Economic and
Social Council of the United Nations has entrusted to the D epartm ent of Economic Affairs.
The S u rve y is published on the responsibility of the Secretariat and the views expressed in it shoud not be
attributed to the Commission or to its m em ber Governments.
The Commission at its eighth session felt that it would be valuable for future sessions of the Commission to
open with a discussion on the economic situation of the re g io n ; such discussion to be based on the most recent
Survey. In accordance with the above view of the Commission, the date of publication of the present Survey has
been brought forw ard to F eb ru a ry instead of August. In the m eantime, a provisional edition in English and French
(not including the Introduction) was distributed to Governments on 15 December 1952 for the ninth session of the
Commission at the beginning of February.
The present Survey, while following m ore or less the same pattern of treatm ent as in earlier editions, is however
confined mainly to the developments during the first half of the year, though subsequent developments have been
noted wherever data are available. Because of the change in the date of publication, the present Survey is also
being issued as Volume 3, No. 3, of the Econom ic Bulletin for Asia and the Far East. The statistical series and
trade agreements as regularly published in the Bulletin are given at the end of this Survey and will be continued
in future num bers of the Bulletin.
V
CONTENTS
Page
Prefatory note
..
...........................................................................................................................................................................................
iii
Introduction
.....................................................................................................................................................................................................
x
Chapter
Part I.
Pr o d u c t i o n
1.
F o o d s t u f f s .....................................................................................................................................................................................................
P r o d u c t i o n ...........................................................................................................................................................................................
T r a d e .....................................................................................................................................................................................................
Consum ption
.................................................................................................................................................................................
Country r e v i e w s .................................................................................................................................................................................
1
1
2
4
4
2.
Raw M a t e r i a l s ...........................................................................................................................................................................................
Agricultural raw m aterials
....................................................................................................................................................
M ineral raw m aterials
..............................................................................................................................................................
7
7
11
3.
Industrial P roduction
.......................................................................................................................................................................
General
..........................................
..
. ..............................................................................................................................
F uel and p o w e r .................................................................................................................................................................................
M anufacturing i n d u s t r i e s ..............................................................................................................................................................
15
15
17
20
Part II.
In t e r n a t i o n a l Tr a d e a n d P a y m e n t s
4.
Further decline of export earnings
..........................................................................................................................................
General r e v i e w .................................................................................................................................................................................
Bearishness in raw m aterial m a r k e t s .................................................................................................................................
A nalysis of export decline
....................................................................................................................................................
26
26
27
31
5.
D ivergent m ovem ents of i m p o r t s ....................................................................................................................................................
Changes in level and com position of imports
.............................................................................................................
Im port o f capital g o o d s ..............................................................................................................................................................
Im port policy
.................................................................................................................................................................................
36
36
39
41
6.
.........................................................................................
D eterioration in terms o f trade and balance of paym ents
Changes in term s of trade
....................................................................................................................................................
Enlargem ent of trade deficits and the regional trade p a t t e r n ................................................................................
Changes in balance of paym ents and foreign a s s e t s ...................................................................................................
44
44
44
46
7.
International trade and paym ents of J a p a n ................................................................................................................................
50
Part III.
M o n e t a r y a n d F is c a l
D e v e l o pm e n t s
8.
Price m ovem ents and p o l i c y .............................................................................................................................................................
Price m ovem ents
.......................................................................................................................................................................
P rice policy
.................................................................................................................................................................................
W a g e s ....................................................................................................................................................................................................
55
55
57
57
9.
M oney and c r e d i t .................................................................................................................................................................................
Dem and and supply of loanable f u n d s ................................................................................................................................
Continuing rise of interest r a t e s ..........................................................................................................................................
M onetary p o l i c y ................................................................................................................................................................................
M oney supply
.................................................................................................................................................................................
60
60
61
61
62
vi
10.
Page
Fiscal d e v e lo p m e n ts .................................................................................................................................................................................64
B u r m a .................................................................................................................................................................................................... 6 4
Ceylon an d other countries
................................................................................................................................................ 65
M ainland C h i n a ............................................................................................................................................................................ 67
A ppendix t a b l e s ...............................................................................................................................................................................................
69
A sian econom ic s t a t i s t i c s ............................................................................................................................................................................
78
T rade agreem ents negotiated a n d /o r finalized d u rin g the second h alf of 1952
101
...........................................................
L IS T O F TABLES IN T H E 1952 SU R V EY
1– 1
1–2
1– 3
2– 1
2– 2
2– 3
2–4
2– 5
2– 6
2– 7
2– 8
2–9
3– 1
3–2
3–3
3– 4
3– 5
3– 6
3– 7
3–8
4– 1
4 –2
4–3
4 –4
5– 1
5– 2
5– 3
5–4
5– 5
Index num bers of volum e of to tal an d p er capita crop p ro d u c tio n . .
.................................................. ....... 1
..
Crop p r o d u c t i o n ................................................................................................................... ........................................................ ....... 2
Index num bers of volum e of trad e in ag ricu ltu ral p r o d u c t s ...............................
.................................................. ....... 3
Raw cotton: W orld supply an d c o n s u m p tio n ...........................................................
.................................................. ....... 3
Raw ju te : P roduction an d d i s t r i b u t i o n ..................................................................... .................................................. ........3
R ubber: U nited States a n d w orld prod u ctio n an d c o n s u m p tio n ............................ ................................................. ........9
T obacco: P roduction a n d a r e a ...............................
..........................................................................................................
10
Iro n ore production
..................................................................................................................................................................
11
Tin-in-concentrates production
.......................................................................................
..................................................
12
Tin m etal p r o d u c t i o n .......................................................................................................... ........................................................
12
Indices of m etal prices in L o n d o n ..............................................................................
..................................................
13
Copper, lead an d zinc p roduction
..............................................................................
..................................................
14
Ja p a n : Indices of in d u strial p r o d u c t i o n .....................................................................
..................................................
16
In d ia : Indices of in d u strial p r o d u c t i o n .............................................................................................................................
16
ECAFE region : Position in w orld p roduction of fuel a n d pow er . . . . ..................................................
17
Coal production
................................................................................................................... ........................................................
17
C rude petroleum production
....................................................................................... ........................................................
19
20
E lectricity p r o d u c t i o n ..................................................................................................................................................................
Jap an and In d ia : Iro n an d steel p r o d u c t i o n ........................................................... ........................................................
21
Fertilizer production
.......................................................................................................... ........................................................
24
Value of e x p o r t s ................................................................................................................... ........................................................
26
Q uantum index of exports of selected com m odities
........................................
..................................................
27
Indices of u n it value, of quantum and of total value of exports
.. .. .. ..
...............................
32
T otal value of exports and value of exports of selected com m odities . .
. . ..................................................
33
V alue of i m p o r t s ................................................................................................................... ........................................................
36
Index of unit value, of quantum , and of to tal value of im ports
..
. .........................................................
37
In d ia : V alue of i m p o r t s ................................................................................................ ........................................................
38
In d ia : Indices of unit value and of quantum of i m p o r t s .......................................................................................
38
E xports of selected groups of du rable goods by the U nited K ingdom , the U nited States and Jap a n to
EC A FE c o u n t r i e s ..........................................................................................................
..................................................
40
6– 1 Indices of term s of t r a d e .........................................................................................................................................................
44
6–2 Balance of t r a d e ................................................................................................................... ........................................................
45
6–3 E xports, im ports and balance of trad e
....................................................................
..................................................
46
6–4 Gold and foreign assets
.........................................................................................................................................................
47
7– 1 Ja p a n : M erchandise t r a d e .........................................................................................................................................................
50
7– 2 Ja p a n : T rend of foreign currency h o l d i n g s ...................................................................................................................
52
8– 1 B urm a: Index of cost of living
......................................................................................................................................
55
8– 2 Ceylon and the P h ilipp ines: Indices of m oney wages a n d real wages
...........................................................
59
9– 1 Index of com m ercial banks’ loans, advances and bills discounted
.....................................................................
60
9–2 Index of m oney supply
.........................................................................................................................................................
62
10– 1 B urm a: G overnm ent expenditure, revenue an d balance
.......................................................................................
64
10–2 C eylon: Estim ates of governm ent revenue and expenditure . . . . . .
. . ..................................................
65
vii
LIST OF A P P E N D IX TABLES IN T H E 1952 SURVEY
Page
1– 1
1–2
1–3
1–4
2– 1
3– 1
3– 2
5– 1
5–2
5– 3
6– 1
6–2
6–3
6–4
6– 5
6– 6
6– 7
7– 1
7– 2
7– 3
9– 1
9– 2
9–3
10– 1
10–2
10–3
10–4
Indices of wholesale prices of selected export c o m m o d i t i e s ......................................................................................
E xport of wheat and wheat flour to selected ECAFE countries from Argentina, Australia, Canada and
the United S t a t e s ................................................................................................................................................................
Estimated energy and protein content per capita of daily average food s u p p l i e s .................................................
Rice exports from selected ECAFE c o u n t r i e s ..................................................................................................................
Tin: W orld production and consumption
..................................................................................................................
China (M ainland) : Industrial production
..................................................................................................................
China (T aiw an) : Industrial p r o d u c t i o n ...........................................................................................................................
B urm a: Im ports by control categories
...........................................................................................................................
Philippines: Im ports by economic groups
..................................................................................................................
Philippines: Im ports by control categories
..................................................................................................................
Ceylon: Balance of p a y m e n t s ..............................................................................................................................................
.....................
P akistan: R egional balance of paym ents on account of current transactions by regions
Philippines: Balance of paym ents
....................................................................................................................................
B urm a: Balance of p a y m e n t s ..............................................................................................................................................
Thailand: Balance of paym ents
....................................................................................................................................
India: Balance of paym ents
..............................................................................................................................................
India: Balance of paym ents on account of current transactions by currency a r e a s ..............................
Japan: Value of trade by currency areas
..................................................................................................................
International com parison of steel p r i c e s ...........................................................................................................................
Jap an: Prospect of balance of international paym ents
......................................................................................
Ratio of bank clearings to deposit money
..................................................................................................................
Liquidity ratio of commercial b a n k s .....................................................................................................................................
Ceylon: Analysis of changes in money supply
........................................................................................................
B urm a: D istribution of government e x p e n d i t u r e .........................................................................................................
B urm a: M ajor components of government revenue
...............................................................................................
B urm a: Expenditure on economic and social development
.............................................................................
B urm a: Reconciliation of budget results with changes in cash balances . . .................................................
69
69
69
70
70
70
70
71
71
71
71
71
71
72
72
72
72
73
73
74
74
74
75
75
75
76
76
L IS T OF CHARTS IN T H E 1952 SURVEY
1.
2.
3.
4.
5.
6.
Population and food crop production in the ECAFE region (excluding m ainland C hina)
.....................
Wholesale price indices of selected export commodities from ECAFE c o u n t r i e s .................................................
Indices of cost of living and of wholesale prices in ECAFE c o u n t r i e s ...................................................................
K orea (south) : Index of retail prices and wholesale price i n d e x .............................................................................
Japan: Average m onthly total cash earnings and average monthly cash wages in all industries
.. ..
Jap a n : Indices of labour productivity and of real earnings in m anufacturing industries
..............................
1
30
55
55
58
58
ECONOM IC SURVEY
OF
ASIA AND T H E FA R E A ST 1952
xi
INTRODUCTION
Econom ic developments in the ECAFE region
were dom inated d u rin g 1952 by strongly conflicting
tendencies. On the one hand, this S u rvey gives ample
evidence of an advance in the physical volum e of
production if one takes the region as a whole. Output
of foodstuffs was som ewhat h igher in 1951/52 th an in
the preceding year, inspite of the 1951 dro u gh t in
im portant areas of In dia, a n d there is reason to believe
that this increase will continue in 1 952/53 u nder the
stimulus of h igher prices and of intensified development
in the field of food production. Sim ilarly the pro d u ction of raw m aterials has expanded, though there has
been an incipient decline in the case of a few
commodities (p articu larly r u b b e r ) . In d u strial expansion
m ade headway, helped by the provision of new equipment and by m ore am ple supplies of basic m aterials.
True, this advance was uneven and there were signs of
a slowing down of the pace in two of the m ain centres
of m anufacturing (Ja p an an d In d ia ). Yet, as far as
physical output is concerned, on balance the factors
m aking for grow th have predom inated.
They were
supported by the continuing inflow of foreign aid funds
and loans, and by technical assistance.
On the other hand, depressive influences originating
in foreign trad e have h ad a re ta rd in g effect in the
recent period. Since the spring of 1951 there has been
a decline in dem and fo r the principal export com m odities
of m ost countries of the region. The consequent drop
in export prices (which on the whole was m ore
significant than the fall in the volume of exports)
m ade deep inroads into export earnings and introduced
a contractionist element of v arying strength into the
economy of m any countries.
Two m ain developments converged to b rin g about
this crisis in exports. The one was the collapse of the
raw m aterial boom of 1950-51, the other the world
recession in textiles. Both were p a rt of a world-wide
inventory cycle which affected the p rim ary producers of
the area (except the rice exporters) as well as the
industrial countries. The m ainland of China, however,
was not exposed to this disturbance in international
m arkets and there has been a large expansion of
economic activity in th at country.
Owing chiefly to the setback in exports, the
increase in physical output was unevenly distributed
am ong countries and in some countries was not associated with a corresponding increase in real income.
One of the outstanding facts in the period under review
was the sharp worsening in the terms o f trade of all
but the rice surplus countries. In consequence, the
region’s productive effort for export now gives a m uch
lower retu rn in term s of im ported goods and services
than the same effort gave a year o r two ago. This
change was p a rt of the process of adjustm ent from the
abnorm al K orean w ar boom, b ut it is w orth noting that
in some ECAFE countries the term s of trad e in mid1952 dropped below the pre-K orean w ar level. Countries
that are heavily dependent both on raw m aterial exports
and on food im ports have suffered the greatest loss
because of the scissor movem ent of falling prices of
exports and rising prices of im ports. In some of these
countries real income has fallen, although the physical
volume of production has been well m aintained or has
expanded.
The fall of export receipts has affected the relationship between supply and dem and in domestic m arkets
of the region. D uring 1951 and for the greater p art
of 1952 industries serving hom e m arkets generally
turned out m ore goods, and in some cases there has
also been an increase in the volume of im ports, at
least d u rin g p a rt of the period. Hom e supplies therefore generally expanded. But as m oney income from
exports declined, buying pow er did not keep pace with
the increase in hom e supplies.
T he liquidation of
com m odity stocks, which occurred when prices and price
expectations took a dow nw ard turn in international
m arkets, accentuated this change, particularly in India
where, m oreover, m onetary policy seems to have acted
strongly as a check on investment in inventories. In
consequence, and as a result also of other influences,
inflationary pressures were gradually neutralised and
finally gave way to a tendency fo r prices to weaken.
Thus there was a general tu rn tow ards deflation, except
in the w ar areas and in the rice surplus countries. It
is true th at the dividing line between inflation and
deflation becam e rath er blu rred by strong sectional price
x ii
increases, especially in the food deficit countries w here
im port prices have risen. Yet this very increase in
im port prices relative to money incom e has tended to
reduce effective dem and, except to the extent th at
subsidies were p aid to offset the higher cost of im ports.
boom h ad pushed raw m aterial prices to quite untenable
levels. A t the peak prices were fa r b eyond an y th in g
needed to induce expansion, a n d were quite out of line
w ith basic scarcities ju d g e d by the requirem ents of
cu rre n t consum ption in in du stry .
Two financial aspects of the recent development
are worth noting. The one is the loss in revenues
which governments have begun to suffer since the export
boom collapsed, In spite of the efforts of governm ents
to tap new sources of income and to pru n e expenditures
(other than on defence and development) the tendency
in m any countries has been for revenues to fall faster
than could be m ade up by such counter m easures. At
the same time there has been a decline in foreign
exchange reserves, and in some cases gains in reserves,
which were m ade d uring the boom, have been practically
wiped out. These changes were very rapid, an d testify
to the great instability which has characterised the
paym ent position of the region, p articularly of countries
heavily dependent on the export of a few com m odities.
P erh a p s equally im p o rtan t h as been the gradual
grow th in the w orld sup p ly o f raw m aterials, a facto r
which m ay assum e increasing significance in the fu tu re
as a re stra in t on prices. It will be recalled th a t after
the w ar the w orld was confronted w ith an acute shortage
of food an d raw m aterials. W hile w orld m an u factu rin g
h a d expanded (because of the increase in the U nited
States in d u strial p ro d u c tio n ), the ou tput of p rim a ry
products h ad lagged, p a rtly because of the destructive
effects of the w ar an d p artly because of the v irtu al
cessation d u rin g the ‘thirties of foreign investm ent in
p rim a ry p ro d u cin g countries. As a result, the prices
of m ost p rim a ry pro d u cts h ad risen in term s of
m anufactures, if one com pares, say, the second half
of the ’forties w ith an average fo r the ’thirties. Now
in recent y ears there has been an increasing n u m b er
of com m odities, notably in d u strial m aterials, w here the
output-stim ulating effect of high prices h as begun to
m ake itself felt. By 1951, when dem and took a sudden
dow nturn, the w orld supply of raw m aterials h ad
increased quite substantially. It h ad increased p artly
th ro u g h the developm ent of new o r substitute m aterials
in industrial countries, a phenom enon of long standing,
b u t of p artic u la r im portance to v arious p ro d u cers in
the EC A FE region to w hom it m eant a reduction in
the dem and fo r th eir products. T he p rice decline in
in tern atio n al m arkets since 1951 does not seem to have
arrested this tendency. T here is some evidence of a
change in the com position of p rim a ry p ro d u c tio n , with
expansion continuing in the case of m an y com m odities
—not only food— the prices of w hich are still attractive
to p ro d u cin g countries. M oreover the present supply
potential for some com m odities is larg e r th an actual
output.
It is significant th at the recent advance of
U nited States in d u strial activity, w hich resulted in a
rise in dem and fo r m an y com m odities, was associated
in the second half of 1952 w ith a continued weakness in
the quotations of a n u m b er of basic raw m aterials. T his
indicates th a t factors on the supply side have becom e a
potent influence and th at output can now m atch a t least
m oderate increases in dem and w ithout the stim ulus of
h igher prices. N aturally, this does n o t apply to every
single com m odity; it applies as yet less to food th an
to other p rim a ry goods, an d it will h ard ly hold should
there occur large an d persistent increases in dem and.
The vulnerability of these countries to international
economic disturbances is, of course, an aspect of und erdevelopment, b ut even Jap a n is now faced w ith a
problem of re-development— or, at any rate, w ith a
large problem of in d ustrial adjustm ent— in view of the
fact that a high proportion of its exports (textiles and
other light goods) is no longer in the m ain stream of
international dem and, and th at m any of its heavy
industries are pro d ucing at relatively high costs.
On account of the trade recession, the financing of
im ports has again become an acute problem . F rom
the outbreak of the K orean w ar until well into 1951 the
limits on im portation had been m ainly physical. M ost
p rim ary p roducing countries h ad rapidly gained foreign
exchange, a large p a rt of which they could usefully
have spent on goods essential to economic development.
In some cases, they found that these goods were difficult
to obtain; in other cases, development plans were not
ready, and there were deficiencies in economic organization which p u t a relatively low ceiling on w hat they
could absorb. In any event, foreign exchange was not
then the m ost im portant lim iting factor. T he situation
has now changed with the decline in export earnings,
and what calls fo r em phasis is th at at least a p a rt of
this decline has been due to factors which are likely
to have a certain degree of perm anency. F o r one thing,
the decline reflects to no small extent the subsiding of
the abnorm al dem ands which d u rin g the K orean-w ar
x iii
In the raw m aterial boom of 1950-51 it was prices
more than sales volumes th at pushed up the export
receipts of the countries of the ECAFE region. The
benefits from these price gains were rather dubious; the
rocketing of prices, followed as it was by an almost
equally rapid decline, became a source of instability
which did much dam age, though in the case of at least
one commodity (tin) recent agreem ents have introduced
an element of stability. Signs have appeared towards
the end of 1952 that the inventory cycle which was
started off by the K orean w ar has worked itself out,
and it seems that consum er purchases and industrial
dem ands are now m ore closely related to current
requirem ents than they were d u rin g the boom and in
the period of inventory liquidation that followed. W orld
industry which earlier in the year had suffered a check,
particularly in the consum ption trades, is expanding
again, and if the upturn in United States production
and im ports continues, a new general advance may
follow. P rim ary producing countries, as a group, will
gain from this expansion, but it m ay well be th at the
price-restraining influences m entioned above will confine
these gains within narrow er limits than in the recent
past.
In the meantime im port requirem ents of the
developing countries are growing, and they are likely
to press heavily against availabilities of foreign exchange.
The implication is that consum ption and development
will compete strongly fo r import-finance, whereas in
the past, for a short period, competition was m ainly for
what was physically available. In the one case as in
the other the problem is one of deciding between
different claims on resources, but the size of the foreign
exchange reserves and of current export earnings
becomes an especially im portant element in the decision
when external finance is the limiting factor.
The
prog ram m in g of expenditures on imports, therefore, is
crucial in development planning.
XV
SYMBOLS EM PLOYED
The following symbols have been used throughout.
* = a v e r a g e o f s i x t o el e v e n m o n t h s .
¶ = a v e r a g e o f e n d - o f - q u a r t e r fi g u r e s .
‡ = 12 m onths beginning A pril of the year stated.
† = 12 m onths ending Septem ber of the year stated.
§ = e n d of p e r i o d .
M n = m illio n .
· ·= not available.
— = nil or negligible.
Figures in italics are provisional.
In referring to com binations of years, the use of an oblique stroke, e.g. 1951 /52, signifies a twelvem onth period (say from 1 July 1951 to 30 June 1952). The use of a hyphen, e.g., 1951-52, signifies the full
period of calendar years covered (including the end years indicated) as either an average or a total, as
specified.
Unless otherwise stated, the stand ard unit of weight used throughout is the m etric ton.
The following symbols are used to represent the abbreviations of national currencies in Asia and the
F a r East:
HK$ = Hong K ong dollar
K. = K y a t (B urm a)
M$ = M alayan dollar (F ederation of Malaya, Singapore, N orth Borneo, Brunei and Sarawak)
N T $ = N e w Taiw an dollar
P. = P e s o (the Philippines)
Pr. = P i a s t r e (C am bodia, Laos and Viet-Nam)
Rp. = R upiah (Indonesia)
Rs. = Rupees (Ceylon, In dia and P akistan)
W. = W o n (Republic of K orea)
Y. = Y e n (Japan)
The term Indochina is used in a geographic sense to cover the Customs U nion of Cam bodia, Laos
and Viet-Nam.
The term M alaya includes the Federation of M alaya and Singapore.
SOURCES
To ensure com parability, data compiled or published by the U nited N ations Statistical Office have
been incorporated wherever possible; the m aterial supplied by governments, publications of governments, the
United N ations and its specialized agencies and international com m odity study groups have been used as
additional sources.
Chapter 1
FO O DSTU FFS1
A lthough rice output increased in Burm a, China,
Indonesia and Thailand, decreases were recorded in
Japan, K orea (so u th ), M alaya and Pakistan.
PR O D U C TIO N
P roduction of foodstuffs in the region continued
to increase d u rin g 1951/52, when it reached a postw ar
peak and was slightly above the pre-w ar level. O utput
per head of population, however, was still below pre-war,
and has been decreasing since 1949 /50 if one excludes
C hina2 (see table 1-1).
In spite of an increase in the production of
agricultural raw m aterials following the K orean w ar
boom, food production in certain countries, including
m ainland China, was either m aintained or was increased
by m ore intensive use of agricultural resources and
lab o u r; for example, an indication of this is the increased
consum ption of fertilizers in the region.3 Thus the
production of non-food crops including fibres and rubber
in the region increased by 5 p er cent over 1950/51 and
by 21 per cent over 1949/50, while food output
increased only slightly. In P akistan and India, jute
acreage expanded by two fifths between 1950/51 and
1951/52, whereas rice acreage declined slightly and
wheat acreage rem ained virtually unchanged.
In
Indonesia, ru b b e r production increased by 16 per cent
and rice production by 8 per cent.
For food crops, substantial gains in 1951 /52 over
previous years were registered for wheat, coarse grains,
potatoes and root crops (see table 1-2). Significant
increases in output of w heat took place in India and
Jap a n ; of maize in India, Indonesia and the Philippines;
and of barley in India, Jap a n and K orea (so u th ).
CHART
I
P O P U L A T I O N AND F O O D C R O P P R O D U C T I O N
( EX C L U DING
M A IN L A N D C H IN A )
IN E C A F E R EG IO N
1 9 3 4 -3 0 -1 0 0
1.
Based on m aterials supplied by the Food and A griculture Organization of th e U nited Nations.
2.
Statistics relating to the m ainland of China are largely based on
estimates. China’s increase in food production in the last few
years is largely due to the very low level of output in 1949/50.
In 1951/52, consumption of all fertilizers in Asia increased by 17
per cent, of nitrogen by 15 p er cent, of phosphoric acid by 17 per
cent, and of potash by more th a n 34 p er cent above 1950/51.
3.
TABLE 1-1
IN D EX NUM BERS O F VOLUM E O F TOTA L AND P E R C A PITA CRO P PR O D U C TIO N a
(1 9 3 4 -3 8 = 1 0 0 )
ECAFE re g io n
1949/50
All c r o p s ....................................................................................................................
Food c ro p sb
...........................................................................................................
Non-food c ro p sc
..................................................................................................
P o p u l a t i o n ....................................................................................................................
P e r c a p ita , a ll c ro p s
........................................................................................
P e r c a p ita , food c r o p s ........................................................................................
95
96
86
112
1950/51
99
99
99
112
85
86
88
103
105
91
118
87
89
104
103
107
119
87
87
88
1951/52
101
101
104
113
89
90
ECAFE re g io n e x c lu d in g C h in a
A ll cro p s
....................................................................................................................
Food c ro p sb
...........................................................................................................
N on-food c ro p s c
..................................................................................................
P o p u l a t i o n ....................................................................................................................
P e r c a p ita , a ll c ro p s
........................................................................................
P e r c a p ita , food c r o p s ........................................................................................
Source:
a.
104
103
110
120
87
86
FAO
These index numbers are weighted by values. They are prelim inary
only. The figures include estim ates for the m ainland of China
which are approxim ations since 1949/50.
b.
c.
Food crops include cereals, sugar, root crops, pulses, edible oilseeds,
tea, coffee and cocoa.
Non-food crops include fibres, linseed, tobacco and rubber.
2
TABLE 1– 2
CRO P PR O D U C TIO N IN T H E EC A FE R EG IO N
M illion tons
1934-38
(A v e ra g e )
1 9 4 9/50
1950/51
1 9 5 1 /52
G ra in c ro p s
R ice (c le a n e d b a s i s ) ..................................................
W heat
..............................................................................
...........................................................
C o a rs e g r a in s a
T otal
...........................................................
100.6
34.8
65.0
200.4
98.2
32.6
61.0
191.8
97.5
36.6
61.3
195.4
98.3
38.1
63.1
199.5
O th e r food c ro p s
P o ta to e s a n d root c r o p s .........................................
V e g e ta b le oils a n d o ils e e d s— oil e q u iv a le n t . .
S u g a r— r a w e q u iv a le n t
.........................................
T e a .......................................................................................
41.0
8.1
7.3
0.7
51.8
7.5
5.9
0.6
52.9
7.9
6.5
0.7
53.5
8.0
R a w m a te ria ls
C otton
..............................................................................
J u t e ........................................................................................
R u b b e r ..............................................................................
T o b acco ..............................................................................
1.9
2.0
0.9
1.5
1.2
1.4
1.5
1.8
1.2
Source:
a.
1.3
1.4
1.2
6.8
0.7
1.6
2.1
1.8
1.1
FAO
Including maize, barley, oats, millets and sorghum.
it likely th at w ith favourable w eather conditions, food
production in 1 9 5 2 /5 3 will exceed th a t of 195 1 /5 2 .
D uring 1951/52, price relationships between food
and non-food crops were undergoing a fu rth e r change.
Jute prices dropped rapidly w ith increased supply at
the beginning of the season, then receded fu rth e r d uring
the first five m onths of 1952. R ubb er prices in June
1952 were at th eir lowest level since the outbreak of
the K orean w ar— a decline of about 50 per cent from
the peak in F eb ru a ry 1951 bu t still far above the
pre-K orean w ar levels. W orld m arket prices of m ost
oils and oilseeds had declined m aterially from the high
level reached arou n d M arch 1951, although by M ay and
June 1952 prices began to recover. On the other hand,
th ro u g h o u t m ost of 1951/52, prices of rice, wheat, other
food grains and sugar were generally steady or
increasing, although recently some grain prices declined
on account of the larger crop prospect in the United
States. In several countries, prices p aid to producers
of rice and other food grains were raised in order to
provide incentives for increased food production. India
allowed a 3 p er cent increase fo r rice at the beginning
of 1952, thus raising the price to $94 per ton. In the
three States of Indochina the price of rice at Saigon
rose by 40 p er cent between M arch 1951 and M arch
1952 to $139 per ton, whilst Japan in Septem ber 1952
raised the price of p addy to internal producers from
$134 to $143 per ton. The Ceylon governm ent increased
the guaranteed price of rice from Rs. 9 to Rs. 12 per
bushel in the th ird q u arte r of 1951. In m ost rice
exporting countries the internal procurem ent price is
controlled and has rem ained nom inally unchanged.
1.
The present price relationships and the great efforts
that are being m ade to expand food p roduction m ake
2.
TRADE
A lthough exports of foodstuffs from countries in
the region continued to increase d u rin g 1 9 5 1 /5 2 , they
were still only 44 p er cent in volum e of pre-w ar level,
m ainly because of the slow recovery of rice pro d u ctio n .
Im ports of foodstuffs into the region increased sharply
in 195 1 /5 2 and alm ost reached the pre-w ar level (see
table 1-3). T he region continued to be a net im p o rter
of foodstuffs.1
The region continued to be a net ex p o rter of
arom atic crops2 and in 195 1 /5 2 the volum e of net
export exceeded the pre-w ar level (see tab le 1-3).
Significant increases took place in 1 9 5 1 /5 2 in exports
of tea from In d ia and Indonesia, an d of tobacco from
In d ia and the P hilippines.
A lthough the disap p o in tin g o u tp u t of rice in some
of the m ain im p o rtin g countries is intensifying the
dem and fo r rice in w orld m arkets, tra d e in rice has not
expanded significantly in 1952. Of the m ain exporters,
T hailand is p u rsu in g a cautious policy an d has reduced
its official estim ate of available supplies. B u rm a’s
liberal shipm ents in 1951 reduced its carry-over considerably, so th a t this y ear’s increased crop m ay n o t be
reflected in larg er shipm ents. P ak istan has announced
The net im port of rice into th e region (excluding the m ainland of
China) in the first h alf of 1952 was of th e order of 90,000 tons.
The region had been a n e t ex p o rter of rice in 1951, 1950 and in
pre-w ar.
A rom atic crops comprise cocoa, coffee, te a and tobacco.
3
TABLE 1-3
IN D E X NUM BERS OF VOLUM E OF TR A D E OF T H E ECAFE REGION
IN AGRICULTU RA L PRO D U C TSa
(1 9 3 4 -3 8 = 1 0 0 )
Im p o rts
E xports
1949/50
1950/51
1951/52
1949/50
1950/51
N e t T ra d e e
1951/52
1949/50
1950/51
1951/52
A g ric u ltu ra l p ro d u c ts
68
82
84
74
89
101
- 60
- 74
- 63
Food c ro p sb
37
42
44
78
79
96
+
+
+
A ro m a tic c ro p sc .
94
88
100
68
81
86
- 99
- 90
-1 0 2
N a t u r a l fib re sd
a n d rubber
97
130
129
68
102
108
-1 4 3
-1 7 3
-1 6 3
a.
b.
.
In basic data fo r tra d e indices the same commodities are included
as for production indices as fa r as international trade existed, and
they have been weighted by corresponding or applicable uniform
price weights. (See footnote ‘a ’ to table 1-1) Not-reported China
trade 1949-51 partially estimated.
Food crops comprise wheat, rye, barley, oats, maize, millet and
sorghum, rice, dry beans, dry peas, broad beans, chick peas, lentils, unspecified pulses, sugar, potatoes, sweet potatoes, vegetable
oils, animal and m arine fats and oils, and meat.
that it will have no exportable surplus, but is exchanging
some rice for wheat from In d ia ; nor can Egypt be
depended upon for supplies. The sustained large output
in E urope and N orth Am erica will thus be doubly
welcome. The U nited States and Italy are expected to
increase their exports, and Spain and P ortugal have
recently joined the rank of exporters, if only on a modest
scale.
An unknown factor on the supply side is
the extent of exports from the m ainland of China in
the second half of 1952.
The m ain increases in dem and for rice have come
from Japan and Indonesia; the Philippines have raised
their im port requirem ents by 35 p er cent. Indian needs
rem ain high, although unevenly distributed, for in some
rice districts the m onsoon has failed for the fifth consecutive year. A lthough the rise in purchasing power
has been checked in Ceylon, Indonesia and M alaya by
the sharp fall in the prices of their m ain export products,
their effective dem and for rice has not, so far, shown
any sign of falling.
The price of rice in international trade has
continued to rise and the price differential between rice
and wheat has widened. U nder these conditions rice
consuming countries, in the region and elsewhere, took
up their full wheat quota u nder the international wheat
agreem ent and total exports of w heat and w heat flour
to 10 ECAFE countries from A rgentina, Australia,
C anada and the U nited States continued to increase
during the first half of 1952 to an annual rate almost
double that of 1950 (See Appendix 1-2).
In d ia ’s
increase in im ports was partly m ade possible by the one
c.
Aromatic crops comprise cocoa, coffee, tea and tobacco.
d.
N atu ral fibres comprise cotton, wool, jute, hard fibres, hemp and
flax.
e.
— = net exports.
+
Changed from a net exporting region to a n et im porting region
between 1934-1938 and during the postw ar period.
million tons of wheat loan from the United States and
200,000 tons under the Colombo Commonwealth Aid
Plan. The year 1952/53 will be the last year of the
present wheat agreem ent and negotiations are taking place
regarding the character of any new agreement.
Exports of fats and oils from the region increased
sharply in 1951 as com pared with 1950, following the
rapid price increases after the outbreak of the Korean
war. A declining trend in prices began in the spring
of 1951 and continued until A pril 1952, after which
there was a m oderate recovery. P artly as a result of
this break in prices, exports of m ost fats and oils from
countries of the region decreased in 1951/52. W orld
consum er and industrial dem and in 1952/53 are likely
to be well sustained by a high level of economic activity.
However, the prospects for large world supplies are
favourable so that a m ajo r rise in world prices of fats
and oils is unlikely in 1952/53.
F o r the first time since the end of war, exportable
tea supplies in 1951/52 were larger than world im ports
for current consumption. P roduction increased in the
m ain exporting countries except Japan, where the crop
was reduced by unfavourable weather. The slightly lower
harvest in N orthern India was more than counterbalanced by an exceptionally large crop in the southern
p art of the country. Ceylon, which in 1950/51 produced
a crop 42 per cent larger than prewar, again increased
production by 3 per cent, and Pakistan harvested a
record crop. Indonesia’s production rose to 62 per cent
of pre-war, notw ithstanding labour difficulties and the
spread of blister blight disease.
4
Actual export of tea during the first half of 1952
was, however, lower than in the first half of 1951, partly
because of the decline in prices at the m ain auctions
(see appendix table 1-1). Even so, prices d u rin g the
1952 season were still 150 to 200 p er cent higher than
pre-war. As production in 1952/53 is prom ising, prices
m ay decline further. In N o rth ern India, w eather conditions have been favourable and total In d ian production
is likely to exceed the 1951/52 crop. In Ceylon, the
cam paign against blister blight is proceeding with a high
degree of success. In Japan, production is likely to
rise.
On the dem and side, the most im portant development
is the end of tea ratio nin g in the U nited K ingdom which
will raise im port requirem ents by about 50,000 tons a
year as com pared with recent years and by 30,000 tons
as com pared with pre-war. The efforts of tea-producing
countries to expand consum ption in the U nited States
and in European countries are likely to show slow but
steady results.
CONSUM PTION
D uring 1951/52 there were some im provem ents in
the energy value of the diet in m any countries of the
region (see appendix table 1-3), but the p rew ar level
has still not been regained. The im provem ent noted in
food consum ption in 19 51 /5 2 was p artly due to the
large im port of foodstuffs. In 1951/52 there was some
recovery in India following the conditions of acute food
stringency that prevailed in p a rt of the country in the
preceding year, with serious shortages still being reported
from some areas.
Food consum ption in the region is about the lowest
am ong the regions of the world, and the slow im provem ent in the average p er capita supplies in m any countries
of the region seems to indicate th at considerable effort
will be needed if both the quantity and quality of per
capita food supplies are not to rem ain at levels lower
than in pre-w ar years.
W ithin the region cereal and starchy foods still
constitute the bulk of a quantitatively inadequate food
supply. A recent survey in Ceylon shows th a t the diet
is often inadequate in term s of necessary calories and
that undernourishm ent is com m on am ong the population.
In an appreciable num ber of families surveyed recently
in India, the average daily calory intake was below
2,000 and, in a few cases, below 1,500. Even in
countries in which calory levels are adequate the diet
often does not contain enough protective food. Such
unbalanced diets have deleterious effects on health and
are responsible for the prevalence of various deficiency
diseases.
It is imperative th a t the p e r capita food consum ption
w ithin the region be raised. T he S ixth Session of the
FAO conference considered an an n u a l increase in world
food p roduction by one to two p e r cent in excess of
the rate o f w orld population grow th (cu rren tly about
1 p er cent) as a m in im u m necessary to achieve some
im provem ent in nu tritio n al standards. N u tritio n al requirem ents in m any countries of the region how ever are
above effective dem and.
Food im port, although sm all in relation to total
food production, plays an im p o rtan t p a r t in determ ining
supplies in m any countries. It is linked up w ith the
ability of the countries to finance im ports. T his is
especially so in view of the decline in export earnings
of m any raw m aterial exporting countries of the region,
an d the increase in the p rice of rice. Even allowing
for unrecorded production such as subsistence fishing,
consum ption of anim al protein is so low that, w ere it
doubled o r trebled in the next ten years, it w ould still
rem ain fa r below the present stan d ard s in advanced
countries. However, livestock productio n can be in creased in the long ru n w ithout d raw in g on ad d itio n al
g ra in supplies, by culling herds, reducing diseases, and
im proving m ethods of breeding and feeding. In the
years im m ediately ahead, it would be unwise to attem pt
to expand livestock outpu t by m ethods th at m ight
dim inish the supply of high energy foods. W hile
avoiding com petition for h u m an food on the p a r t of
anim als, the supply of anim al protein, it is conservatively estim ated, can be doubled in m ost countries by
im proved p roduction techniques w ithout detrim ent to
the output of food crops. T here is also m uch scope
fo r expanding fish production from in lan d sources,
especially as the fish resources of the region are still far
from being fully exploited.
COU N TR Y R E V IE W S
M ajor rice exporting countries
P rod u ctio n of rice (p a d d y ) continued to increase
in m a jo r rice exporting countries in 19 5 1 /5 2 . Rice
p roduction in B urm a benefitted from g re ater internal
security.
C urrent yield exceeds p re w a r levels, as
re-cultivation first extends to better quality lands.1 In
T h ailan d rice acreage increased in 1 9 5 1 /5 2 to about 42
p er cent above prew ar, though yields declined som ewhat
ow ing m ainly to m arg in a l lands being b ro u g h t under
cultivation. In the three States of Ind o ch in a the area
u n d er rice cultivation has increased, th o u g h it still
rem ains 5 to 10 p er cent below prew ar.
1.
The a re a under rice cultivation in 1951/52 was about 23 p e r cent
below p re w a r level.
5
T h e e x p o rta b le su rp lu s of th e c u r re n t c ro p o f rice
from these co u n trie s, how ever, will n o t sign ificantly
in crease in 1952. In T h a ila n d th e G o v e rn m e n t p la n n e d
to keep 3 0 0 ,0 0 0 to n s as a reserve stock w ith in th e c o u n try
a n d allocated on ly 80 0 ,00 0 tons fo r e x p o rt in the first
ten m o n th s of 1952.
T o w a rd s th e en d of th e y e a r
63,000 to n s w ere allow ed to be ex p o rted . In B u rm a,
a lth o u g h th e rice c ro p is la rg e r th is ye a r, lib e ra l sh ipm ents in 1951 fro m c a rry -o v e r stocks will red u ce the
e x p o rta b le su rp lu s (o n th e a ssu m p tio n th a t it is in te n d e d
to b u ild u p stocks to the p re v io u s le v e l) . B u rm a ’s rice
co m m itm en t up to J u n e 1952 is 6 63,000 tons, o r one
h a lf of the e x p o rta b le su rp lu s fro m th e 1 9 5 1 /5 2 crop .
B u rm a a n d T h a ila n d c o n tin u e d to e x p o rt rice
m a in ly to c o u n trie s of th e reg io n (see a p p e n d ix tab le
1 -4 ), a n d In d ia a n d In d o n e s ia ’s sh a re in T h a ila n d rice
e x p o rts a re in c re asin g . In d o c h in a rice ex p o rts in p re w a r
a n d ea rly p o stw a r y e a rs w ere m a in ly to c o u n trie s outsid e
the reg io n b u t m o re recently, especially in 1952, g re a te r
rice ex p o rts h a v e been m a d e to c o u n trie s w ith in th e
region.
T h e in crease in th e p ric e o f rice in in te rn a tio n a l
m ark ets te n d e d to stim u late rice p ro d u c tio n in the
th ree States o f In d o c h in a , a n d p e a sa n ts w ere re p o rte d
to be e x p a n d in g rice c u ltiv a tio n ow in g to the e sta b lish m ent o f an a g ric u ltu ra l service, seed re se a rch , m ec h a n iz a tion a n d use of fertilizers. In T h a ila n d the p ro d u c e rs do
n o t h av e th e full benefit o f th e h ig h p ric e of rice, o w ing
to a p p lic a tio n of official ex c h a n g e ra tes fo r s u rre n d e r
of fo reig n ex ch an g e e a rn e d on rice ex p o rt, a lth o u g h
som e benefit h a s a c c ru e d to th em th ro u g h th e w o rk in g
of th e in d u c e m en t system .1 In B u rm a , in spite of th e
p a rtia l re sto ra tio n of rice tr a d e to p riv a te business, th e
c o n tro l exercised by th e S tate A g ric u ltu ra l M a rk e tin g
B o ard as th e sole b u y e r o f ric e fo r e x p o rt h as en ab led
it to keep th e in te rn a l p ric e of rice u n c h a n g e d .
T a k in g B u rm a ’s in te rn a l p ric e of rice as 100,
in te rn a l p rice s elsew here w ere r o u g h ly : T h a ila n d 230,
E gypt 280, In d ia 3 10, Ita ly 330, U .S.A . 390, J a p a n
440, In d o c h in a 460, P a k is ta n 550 a n d B razil 740. T hese
indices do n o t m e a su re re la tiv e incom es o r w ell-being
of the rice fa rm e rs in th e v a rio u s c o u n trie s, as incom es
a re dep en d en t b o th o n the p ric e received a n d on costs
of p ro d u c tio n a n d on v ery m a n y o th e r fa c to rs as well.
T he indices m erely show th a t a lth o u g h th e w o rld m a rk e t
price of rice is th e sam e fo r all c o u n trie s, th e re are
large differences in in te rn a l prices. I n th e ric e e x p o rtin g
co u n tries of B u rm a a n d T h a ila n d , th e in te rn a l p ric e of
rice is kept m u c h below the e x te rn a l p ric e, as a m a tte r
of m a rk e tin g a n d fiscal policy. I n o th e r co u n trie s
1.
See C h a p ter 4 “ F u r t h e r d e c lin e in e x p o r t e a r n in g s ” .
sub sid ies on im p o rts ex p lain th e difference, a n d th e re
a re also differences in costs o f p ro d u c tio n as betw een
the v a rio u s co u n tries. T h e d is p a rity betw een th e in te rn a l
a n d th e e x te rn a l p rice s of rice in B u rm a a n d T h a ila n d
suggests th a t, even if the in te rn a tio n a l p ric e sh o u ld fall,
a t som e fu tu re date, n e ith e r c u ltiv a to rs’ incom es n o r
p ro d u c tio n w ould suffer im m ed iately . T o th e ex ten t th a t
g o v e rn m e n t revenues a re d e p e n d en t in these tw o c o u n trie s
on p ro fits fro m rice m a rk e tin g , th e g o v e rn m e n ts’ financial
p o sitio n w o uld be affected.
I n o th e r c o u n trie s rice
o u tp u t w ould be affected unless g o v e rn m en ts a re w illing
to subsidize rice p ro d u c tio n .
Raw material exporting countries
T h e d iv ersio n o f resources, especially la b o u r, to th e
p ro d u c tio n of ra w m a te ria ls d u r in g th e K o re a n w ar
boom , affected th e p ro d u c tio n of foo d in a few areas.
A t th e sam e tim e ra w m a te ria l p ro d u c in g c o u n trie s
w ith in th e re g io n in c rea se d th e ir d e m a n d fo r foodstuffs
as th e ir incom es h a d ris e n ; th is a d d itio n a l d e m a n d
in c rea se d th e ir d e p en d en ce on fo o d im p o rts fro m
co u n tries in th e re g io n a n d elsew here.2 R ice a n d w heat
im p o rts into Ceylon, In d o n esia, M a la y a a n d th e P h ilip pines rose su b sta n tia lly in 1951 a n d 1952, as co m p a re d
w ith 1950. W h e a t im p o rts in cre a se d also because of
the slow e x p a n sio n of rice p ro d u c tio n in th e m a jo r rice
e x p o rtin g c o u n tries o f th e reg io n .
In view of the sc arc ity of rice supplies a n d th e
r a p id g ro w th of p o p u la tio n ,3 b o th C eylon a n d M alay a
a re keen on e x p a n d in g dom estic p ro d u c tio n . Som e of
th e la n d re cla m a tio n a n d irrig a tio n p ro je c ts u n d e rta k e n
in C eylon a r e com pleted o r a re n e a rin g com p letion . In
M alay a, rice p ro d u c tio n in 1 9 5 1 /5 2 h a s been m a in ta in e d
at a relatively h ig h level, w h ich is 35 p e r cent above
p re w a r. In In d o n e sia rice p ro d u c tio n is re p o rte d to
h av e re g a in e d th e p re w a r level b u t p e r c a p ita supply
re m a in s well below this. L ocal shortages, d u e largely
to d iso rg a n iz e d m a rk e tin g a n d dislocated tra n sp o rt,
cau sed a steep rise in p rice s of rice a n d o th e r foods
a n d led th e G o v e rn m en t to p la n fo r in creased im p o rt
of rice in 1952. T h e G ov ern m en t also decided to p a y
heav y su b sid ies on im p o rte d rice a n d c o n tro l dom estic
p rices. In th e P h ilip p in e s, s u g a r o u tp u t in 1 9 5 1 /5 2
cam e u p to th e p re w a r level, b u t ex p o rts h av e n o t yet
re a c h e d th e U n ite d S tates q u o ta of 85 0,000 tons.
F o o d p ro d u c tio n , th o u g h well above p re w a r levels,
suffered a slight set bac k in 1 9 5 1 /5 2 fro m ty p h o o n s an d
floods, a n d im p o rts of rice w ere co n tin u e d in o rd e r to
check ris in g prices.
2.
3.
D u r in g th e fir st te n m o n th s (A u g u s t -M a y ) o f th e r ic e m a r k e tin g
y e a r 1 9 5 1 /5 2 , th e U n it e d S ta te s e x p o r te d r ic e to th e w orld to th e
a m o u n t o f a b o u t 650,000 to n s or n e a r ly t w ic e th e a m o u n t o f 1 9 5 0 /5 1 .
O f th is, 64 p e r c e n t w a s s h ip p ed to A s ia n c o u n trie s a s com pared
w ith 3 p e r c e n t o f to ta l e x p o r ts sh ip p ed to th e s e co u n trie s in th e
c o r r e sp o n d in g p e rio d o f 1 9 5 0 /5 1 . S e e F o r e ig n C r o p s a n d M a r k e ts ,
21 J u ly 1952, p . 52.
2.8 p e r c e n t a n n u m in C eylon an d 2.5 p e r c e n t in M alaya.
6
P a k ista n fo r th e first tim e b ecam e a fo o d deficit
co u n try in 1952 a n d is stated to be r e q u ir in g 40 0 ,0 0 0
tons of fo o d g ra in im p o rts. U n fa v o u ra b le w e a th e r r e sulted in low er p ro d u c tio n of rice a n d w h e a t, w h ich
necessitated b o th an e m b a rg o on g r a in e x p o rts a n d
intensive in te rn a l p ro c u re m e n t fo r d is trib u tio n to deficit
areas. P a k ista n succeeded in n e g o tia tin g a $15 m illio n
loan fro m the U n ite d States E x p o rt-Im p o rt B a n k fo r th e
p u rc h a se of food im p o rts. In th e seco nd h a lf of 1952,
nego tia tio n s w ere p ro c e e d in g to p ro c u re 150,000 to n s of
w heat on the open m a rk e t in th e U n ite d States. P a k is ta n
h a d a lre a d y secured o r m a d e a rra n g e m e n ts fo r th e im p o rt
of 310,000 to n s of w h e a t fro m th e Soviet U n io n , In d ia ,
T u rk e y , S y ria a n d E g yp t. E a rlie r in th e y e a r, th e B ritish
G ov ern m en t h a d given tim ely a id b y d iv e rtin g to K a r a c h i
9,000 tons of w h eat on ro u te to th e U n ite d K in g d o m fro m
A u stra lia .
P a k is ta n ’s food deficit, h ow ever, is unlikely to
co n tin u e fo r long, in view of th e fall in th e p ric e s of
ju te a n d co tto n a n d th e g o v e rn m e n t’s po licy of in c re a sin g
fo o d g ra in p ro d u c tio n , so th a t th e c o u n try can expect to
be self-sufficient in w h e a t a n d rice by th e e n d of 1953.
G iven av erag e w eath er co n d itio n s fo r g r a in p ro d u c tio n
a n d effective c o n tro l over fo o d d istrib u tio n , P a k is ta n m a y
once m o re have a su rp lu s fo r ex p o rt in 1 9 5 3 /5 4 , a fte r
m eeting the e x p a n d in g re q u ire m e n ts f o r d om e stic c o n su m ption . A u s tra lia h a s offered P a k is ta n as p a r t o f its
allocation u n d e r th e C olom bo P la n £ 1 ½ m illio n w o rth
of a g ric u ltu ra l im plem ents a n d electrical go ods d u r in g
1952. M eanw hile, irr ig a tio n p ro je c ts c o n tin u e to be
given h ig h p r io r ity in P a k is ta n ’s d ev elo p m en t p lans.
Two m a jo r schem es co sting a b o u t R s.300 m illion, w h ic h
h a v e recently been ap p ro v e d , will b r in g 5 m illion
a d d itio n a l acres u n d e r cultivation.
In Ceylon a n d M ala y a , even if th e sh o rt-te rm
p ro g ra m m e s fo r a g ric u ltu ra l d evelopm ent a r e fully
im plem ented, im p o rt d e m a n d s f o r rice a re u n likely to
show a n y m a te ria l d ecline by 1 9 5 3 /5 4 . In d o n e s ia ’s
a g ric u ltu ra l p ro g ra m m e co n tin u e s to c o n c e n tra te on
m e a su re s m ost likely to b r in g im m e d ia te im p ro v e m e n t
in the p r o d u c tio n of fo o d a n d e x p o rt cro ps. T his,
to g e th e r w ith im p ro v e m e n ts in tra n s p o r t a n d m a rk e tin g ,
m a y scale dow n im p o rts of rice b y 1 9 5 3 /5 4 . P e r c a p ita
food av a ila b ility in th e P h ilip p in e s h a s exceeded th e
p re w a r level. W ith th e fin an cial a n d te c h n ic a l assistan ce
fro m the U n ited States, th e c o u n try a p p e a rs to b e on
its w ay to ach ie v in g self-sufficiency in rice, a n d re h a b ilita tion of p ro d u c tio n a n d tra d e in e x p o rt crop s.
Food and raw m aterial im porting countries
I n d ia a n d J a p a n c o n tin u e d to be la rg e ly d e p e n d e n t
o n w h e a t im p o rts fr o m o u tsid e th e r e g io n .
(See
a p p e n d ix ta b le 1 -2 ). J a p a n o b ta in e d m o st of its rice
su p p lies in 1950 a n d 1951 fr o m B u rm a , I n d o c h in a a n d
T h a ila n d . In 1952, o w in g to th e s h o rta g e o f ric e w ith in
th e re g io n , it h a s to s u p p le m e n t its f o o d g r a in r e q u ir e m e n ts b y ric e im p o r ts fr o m o u tsid e th e re g io n . In
1 9 5 1 /5 2 J a p a n p ro d u c e d a lm o st 83 p e r c e n t of its to ta l
fo o d supplies c o m p a re d w ith 85 p e r c e n t p r e w a r , despite
a r a p id in c re a se in p o p u la tio n in th e la st d e c a d e . T h is
h a d be e n m a d e p o ssib le m a in ly t h r o u g h slig h t u n d e r m illin g of rice, re s tric tio n on in d u s tr ia l uses of food,
a n d a so m e w h a t lo w e r c o n s u m p tio n level. J a p a n ’s
a g ric u ltu ra l d e v e lo p m e n t p la n s a re d e sig n e d to in c re a se
d om e stic fo o d p ro d u c tio n in line w ith p o p u la tio n g ro w th .
In In d ia , fo o d g ra in p ro d u c tio n in 1 9 5 1 /5 2 suffered
fro m d ro u g h t in som e im p o r ta n t a re a s.
F o o d g ra in
im p o rts in 1951 of 4 .7 m illio n to n s, tw ice th e volum e
o f th e p r e c e d in g y e a r, e a se d th e in te r n a l su p p ly situ a tio n
a n d th e y e a r-e n d stocks w ere la rg e r. P r o d u c tio n of
g ro u n d n u ts declined, b u t s u g a r c a n e a n d te a o u tp u t rose
o w in g to in c re a se d a c re a g e a n d f a v o u r a b le g ro w in g
c o n d itio n s.
D espite d r o u g h t in 1 9 5 1 /5 2 , p r o c u r e m e n t of foodg ra in s w as m o re successful in 1952 th a n in th e p re v io u s
y ear. W ith in c re a se d p a y m e n ts on in te rn a lly p ro c u re d
g ra in s , in v o lv in g h ig h e r p ric e s f o r f a rm e rs , m a r k e ta b le
supplies a n d stocks in the h a n d s of th e G o v e rn m e n t
in c re a se d . M illets h a v e b een d e c o n tro lle d t h r o u g h o u t
In d ia , w hile several deficit S tates h a v e d e c o n tro lle d som e
fo o d g ra in s . T h e fo o d im p o r t ta rg e t f o r 1952 is likely
to be re v ise d d o w n w a rd s fr o m th e ta r g e t o f 5 m illion
tons p re v io u sly fixed (in c lu d in g u n s h ip p e d b a la n c e of
1951 U n ite d S tates lo a n of one m illio n to n s of w h e a t) .
T h e I n d ia n P la n n in g C o m m issio n h a s g iv en high
p r io r ity to d e v e lo p m e n t of a g r ic u ltu re th r o u g h co m p letio n
of v a rio u s la rg e a n d sm all scale ir r ig a tio n p ro je c ts in
the first F iv e -Y e a r P la n , a n d a im s to se c u re b y 1 9 5 5 /5 6
a d d itio n a l p r o d u c tio n of 7.6 m illio n to n s of fo o d g ra in s,
1.2 m illio n bales of co tto n , 2 m illio n b ales of ju te , a n d
a s u b s ta n tia l in c re a se in o u tp u t of s u g a r a n d oilseeds
o v e r th e 1950 levels. T h e se ta rg e ts , if ac h ie v e d , w o u ld
in c re a se dom e stic fo o d p ro d u c tio n b y 1 9 5 5 /5 6 b y 16
p e r cen t a b o v e th a t of 1 9 4 9 /5 0 , w hile p o p u la tio n is
ex p ected to in c re a se only 9 p e r cent o v e r th a t p e rio d .
T h is w ould re d u c e I n d i a ’s re q u ir e m e n ts of fo o d im p o rts,
a n d relieve th e fo o d s h o rta g e , esp ecially in rice, of
o th e r c o u n trie s w ith in th e re g io n .
Chapter 2
RAW MATERIALS
P ric e s of b o th a g ric u ltu ra l a n d m in e ra l raw
m a te ria ls ro se ra p id ly in th e K o re a n -w a r b o o m p e rio d
a n d by 1951 o r 1952 h a d gen e ra lly d o u b le d c o m p a re d
w ith 1949 level. T h e steepest p ric e rise w as in ru b b e r
w hich at its p e a k level w as five a n d a h a lf tim es the
1949 level. T h e rise in p rices of a g ric u ltu ra l ra w
m a te ria ls sta rte d e a rlie r th a n th a t of m in e ra ls, a n d w as
m o re r a p id ; a n d the collapse of the b o o m affected
th e m first, w ith th e d o w n -tu rn of p ric e s o c c u rrin g in
the first o r second q u a r te r s of 1951. W ith th e exception
of tin the rise in p ric e s of m in e ra ls lasted lo n g er, a n d
in m a n y cases th e peak w as re ach ed only a t th e end
of 1951 o r in the first q u a r te r of 1952. T h e re were
a few com m odities, how ever, such as copper, iro n ore
a n d m a n g a n e se ore, w hose p ric e s c o n tin u e d to in crease
th r o u g h o u t 1952.
T h e in crease in p rices d u rin g th e b o om p e rio d
stim u la te d p ro d u c tio n of b o th a g ric u ltu ra l a n d m in e ra l
ra w m a te ria ls. R eg io n a l o u tp u t of ju te in 1 9 5 1 /5 2
w as a b o u t 70 p e r cent, of r u b b e r 2 6 p e r cen t a n d of
c otton a b o u t 40 p e r cent h ig h e r th a n in 1 9 4 9 /5 0 .
O u tp u t of m in e ra ls also re a c h e d levels 50 to 100 p e r
cent above 1949, th o u g h in tin th e e x p a n sio n w as m u ch
sm aller ( + 1 0 % a t the p e a k ) . T h e m ost significant
in creases to o k place in th e p ro d u c tio n of lead a n d zinc
ore, a n d in refined su lp h u r in J a p a n . T h e increase in
p ro d u c tio n of a g ric u ltu ra l raw m a te ria ls w as m a d e
possible b y a m o re intensiv e use of a g ric u ltu ra l reso u rces
a n d to a lim ited extent b y the d iv e rsio n of reso u rces
fro m the p r o d u c tio n of foodstuffs. T h e e x p a n sio n in
m in e ra l p r o d u c tio n w as a c o n tin u a tio n , in m a n y c o u n tries, of th e p o stw a r recovery.
In sp ite of the collapse of th e K o re a n -w a r boom ,
prices of m o st ra w m a te ria l, to w a rd s the e n d of 1952
were still above th e 1949 level; one of th e exceptions
is ju te . O u tp u t of a n u m b e r of p r im a r y m a te ria ls h a s
begun to d ecline in 1952 b u t in all cases it w as still
very m u ch above th e 1949 level.
AG RICULTURAL R AW M ATERIALS
Cotton.
still
P o stw a r co tto n p ro d u c tio n in th e re g io n , th o u g h
below p re -w a r level, h a d im p ro v e d .
D u rin g
1 9 5 1 /5 2 p ro d u c tio n rose fu rth e r to 1.6 m illion tons,
w ith sig n ifican t increases in m a in la n d C hina, In d ia a n d
P a k is ta n w h ere h ig h prices a t th e p la n tin g season gave
a stim ulus.
W o rld c o tto n p ro d u c tio n fo r 1 9 5 1 /5 2 , e stim ated a t
35.4 m illion bales, w as th e la rg e st in p o stw a r years
a n d th e second la rg e st o n re c o rd . T h e increase in
supply to g e th e r w ith the su b sid in g of speculative
d em an d s, b ro u g h t a b o u t a ra p id decline in prices d u rin g
1951, a n d th is w as a g g ra v a te d b y a c o n tra c tio n in
1 9 5 1 /5 2 of textile o p e ra tio n s a n d cotton consum ption,
a n d b y th e a c c u m u la tio n of tex tile a n d a p p a re l stocks
a t all levels fro m m a n u fa c tu re r to co nsu m er. W hile
tra d e rs re d u c e d th e ir o rd e rs, m a n u fa c tu re rs reduced
th e ir c o m m itm en ts fo r cotton a n d the d ecline in cotton
prices in d u c e d fu rth e r ca u tio n w ith respect to new o rders.
It is n o t clear w h e th e r the recession will have any
g re a t effect in In d ia . G o v e rn m e n t co n tro ls have held
dow n the p ric e of In d ia n cotton (a s well as p rices of
th e e n d -p ro d u c ts) so th a t th e in d u stry e njoys a stro n g
com petitive p o sitio n in ex p o rt m a rk e ts, alth o u g h th e fall
in textile p rices in o th e r c o u n trie s h as red u ced its
com petitive a d v a n ta g e . In Ja p a n , a la rg e unsatisfied
dom estic m a rk e t fo r textiles (ra tio n in g w as abolished
in J a p a n only in 1951) a n d su b sta n tia l m ilita ry o rd e rs
offset th e fall in exports.
As a resu lt of the textile recession a n d the general
u n c e rta in ty in th e cotton m a rk e t d u rin g 1 9 5 1 /5 2 ,
tra d e in cotton (lin t) of c o u n trie s in the reg io n decreased
s h a rp ly d u r in g the second h a lf of 1951 a n d in 1952.
E x p o rts of cotton fro m In d ia a n d P a k ista n fell
su b sta n tia lly in the first h a lf of 1952. D u rin g the first
q u a r te r of 1952 th e co tto n tra d e in P a k ista n cam e
p ra c tic a lly to a standstill. E x p o rts reviv ed only when
th e C otton B o a rd revised its su p p o rt policy a n d agreed
to sell cotton a t 10 p e r cent below th e official m in im u m
price. In th e second h a lf of 1952, th e p rice su p p o rt
schem e w as abolished.
W o rld cotton supply a n d c o n su m p tion in th e last
th re e seasons, as re c o rd e d by th e In te rn a tio n a l C otton
A d v iso ry C om m ittee, a re show n in T ab le 2-1. T he
1 9 5 2 /5 3 season opened w ith a carry -o v er of 13.7 m illion
8
T A B L E 2-1.
RAW
COTTON:
W ORLD
SUPPLY AND
C O N S U M P T IO N
M illion bales a
1 9 4 9 /5 0
Item s
O p e n in g sto c k s
...........................................................................................................
T o ta l s u p p l y
C o n su m p tio n
..................................................................................................
............................................................................................... ..
C lo sin g s t o c k s ............................................................................ .....................
1950/51
1951 /5 2
15.2
16.9
11.5
31.2
27.9
35.4
46.4
44.8
46.9
29.5
33.3
32.2P
16.9
11.5
13.7P
S ou rce: F A O
a. O ne b a le = 4 7 8 lb. n e t.
p. P r o v is io n a l.
T A B L E 2-2
RAW JU T E :
P R O D U C T IO N A N D D IS T R IB U T IO N
Thousand tons
1934/3519 3 8 /3 9
(A v e ra g e )
P ro d u c tio n
P a k i s t a n ..............................................................................
In d ia
..........................................................
T otal
............................................................
From P a k is ta n
To In d ia
............................................
1,860
1,860
1949/50
1950/51
1 9 51/52
613
1,105
1,165
568
597
849
1,181
1,712
2,026
305
471
309
317
773
589
109
—
—
E xports
O v erseas
F rom In d ia
760
............................................................
...................................................
T otal o v e r s e a s
.........................................
760
426
773
589
...............................................................................
1,178
905
966
1,045
C o n su m p tio n
In d ia
S ou rc e :
FAO
bales. Given a re p e titio n o f th e 1 9 5 1 /5 2 v o lu m e of
w o rld p ro d u c tio n , to ta l su p p ly in 1 9 5 2 /5 3 w o u ld be
a b o u t 4 8 m illio n bales— a re c o rd p o stw a r supply. It
a p p e a rs ho w ever th a t p ro d u c tio n is unlik ely to be as
la rg e as in 1 9 5 1 /5 2 , as p ric e is less fa v o u ra b le to c o tto n
p la n tin g .
Jute
T h ro u g h o u t th e p o stw a r e ra , ju te a n d ju te p ro d u c ts
h av e been in sh o rt supply, p a rtic u la rly in th e first h a lf
o f 1951 w hen p ric e s re a c h e d a level 12 o r 15 tim es
th e p re-w a r.
W ith th e h a rv e stin g o f m u c h la rg e r
c ro p s in 1 9 5 1 /5 2 sup plies becam e p len tifu l w hile
d e m a n d de c re a se d ; p rices in consequence d ro p p e d .
B oth P a k is ta n a n d I n d ia e x p a n d e d th e ir ju te
a crea g e b y 35-40 p e r c en t in 1 9 5 1 /5 2 , re s u ltin g in a
cro p of o v er 11 m illio n bales. T h is w as th e first tim e
since 1940 th a t p ro d u c tio n h a d ex c e ed e d th e p re -w a r
level. Y ields in P a k is ta n w e re a b o u t a v e ra g e . I n I n d ia
yields, a lth o u g h slig h tly h ig h e r th a n la st y e a r, w ere still
m a rk e d ly lo w e r th a n in e a rlie r p o s tw a r y e a rs, o w in g to
th e ex ten sio n of a c re a g e o u tsid e W e st B e n g al in to a rea s
less su ited to, o r less e x p e rie n c e d in, ju te c u ltiv a tio n .
W ith m o re ra w ju te , m ills in C a lc u tta ex te n d ed
th e ir o p e ra tio n s in D e c em b e r 1951. O n a c c o u n t of
w eak U n ite d S tates d e m a n d , h e ssia n m a n u fa c tu r e w as
re la tiv e ly u n p ro fita b le a n d o n e e ig h th o f th e H essian
loo m s r e m a in e d sealed. A s la r g e r o u tp u t of sa ck in g
co u ld n o t b e a b s o rb e d , th e C a lc u tta m ills re v e rte d to
th e 4 2 ½ h o u r w eek a t th e e n d of M a rc h .
T o e n c o u ra g e e x p o rts, th e I n d ia n G o v e rn m e n t
h a lv e d th e e x p o rt d u ty o n h e ssia n in F e b r u a r y 1952 an d
9
su bsequently ab o lish ed q u o ta s on ex p o rts of g u n n ies to
soft c u rre n c y m a rk e ts. E ven so the C alcu tta in d u stry
w as b e in g u n d e rso ld b y E u ro p e a n m ills w h ich in c rea se d
th e ir e x p o rts sig n ific an tly to th e U n ite d K in g d o m , th e
U n ite d States a n d o th e r m a rk e ts.
In th e U n ited
K in g d o m , n o ta b le im p ro v e m e n ts h a v e ta k e n place in th e
p ro d u c tiv ity of th e D u n d e e in d u s try a n d m o re am ple
supply of ra w ju te h a s m a d e possib le th e a b a n d o n m e n t
of ra tio n in g . T o s tre n g th e n th e com petitive p o sitio n of
In d ia ’s ju te m ills, th e e x p o rt d u ty on b o th h e ssian an d
sacking w as f u rth e r re d u c e d in M a y 1952.
Because of th e la rg e d o m e stic c ro p a n d re d u c e d
d e m a n d fo r ju te p ro d u c ts, C alcu tta m ills h av e n o t been
ta k in g up th e ir full q u o ta (2 .5 m illio n bales fo r th e
season) of P a k is ta n ju te . S h ip m e n ts fro m P a k is ta n
overseas, w h ich in 1 9 5 0 /5 1 re g a in e d th e p re -w a r level
of ex p o rts fro m th e In d o -P a k ista n sub -co n tin en t, w ere
also sm aller in 1 9 5 1 /5 2 .
W ith fa llin g ex p o rts, p ric e s in P a k is ta n receded
sh a rp ly in th e e a rly m o n th s of 1952. In M a rc h , the
G ov ern m en t a n n o u n c e d a new sch edu le of m in im u m
prices fo r loose ju te , a t w h ich th e Ju te B o a rd expressed
its w illingness to b u y . A s p ric es sho w ed signs of fallin g
fu rth e r, especially in th e C a lc u tta m a rk e t, th e P a k is ta n
m in im u m p ric e w as re d u c e d by a b o u t 2 6 p e r cent a t
th e en d of J u n e 1952.
P a k ista n h a d 97 p e r cent of th e licensed a re a
p lan te d in 1 9 5 1 /5 2 , b u t a t th e tim e o f p la n tin g in
1 9 5 2 /5 3 ju te p rice s w ere less fa v o u ra b le th a n ric e pric e s
a n d p lan tin g s w ere re p o rte d to b e n o h ig h e r th a n in
the p rev io u s season. In a d d itio n , th e G o v ern m en t
a n n o u n ce d in 1952 its in te n tio n to red u c e su b sta n tia lly
the a re a u n d e r ju te . In In d ia , th e a re a p la n te d in
1 9 5 2 /5 3 is expected to be less th a n in 1 9 5 1 /5 2 . But
RUBBER:
U N IT E D
given fa v o u ra b le w e ath e r c o n d itio n s p ro d u c tio n should
be a d e q u a te to m eet th e re q u ire m e n ts of ju te fa c to ries
a n d a re c u rre n c e of th e v ery h ig h p ric es of ra w ju te ,
w hich h a d p re v a ile d in p re v io u s y ea rs, seem s unlikely.
S uch h ig h price s h a d g re a tly e n c o u ra g e d th e d isp lacem e n t of ju te a t b o th th e ra w m a te ria l a n d m a n u fa c tu re d
g oods stages. Illu stra tiv e of th is w as th e in c re a sin g
use of p a p e r as a p a c k in g m a te ria l in th e U n ite d States.
W ith th e fall in p rice s of ra w ju te in 1952 to levels
below th o se p re v a ilin g in 1949, ju te is likely to replace
su b stitu te s a n d th e c o n su m p tio n of ju te is likely to
increase.
Silk.
Silk p ro d u c tio n in J a p a n co n tin u e d to in crease
d u rin g 1 9 5 1 /5 2 to 11,400 to n (m a c h in e reeled) w hich
was 15 p e r cent g re a te r th a n in th e p re c e d in g season
th o u g h only a th ir d of p re -w a r p ro d u c tio n . In spite
of th e in c re ase in recen t p ro d u c tio n , J a p a n ’s ex p o rt of
silk, afte r a n in crease in 1950 declined in 1951 a n d
1952, ow in g p a rtly to th e in crease in d om estic c o n sum p tio n .
R ubber.
T h e I n te rn a tio n a l R u b b e r S tu d y G ro u p gives th e
fo llow ing estim a te of th e p ro sp ectiv e supply of, an d
d e m a n d fo r, ru b b e r in 1952 (see ta b le 2 -3 ).
T h e p ric e of ru b b e r, like th a t o f m a n y o th e r ra w
m a te rials, fluctuated v iolently d u r in g a n d a fte r th e
K o re a n w a r boom . A fte r re a c h in g a p e a k in th e first
q u a r te r of 1951, it c o n tin u e d to d ecline d u r in g th e
first h a lf of 1952 (see a p p e n d ix ta b le 1 -1 ). M a in ly as
a re su lt of this p ric e fall a d ro p of som e 140,000 tons
(7 p e r cent) is expected in n a tu r a l ru b b e r p ro d u c tio n
in 1952; th e loss of o u tp u t is alm ost en tire ly on a cco u n t
of sm all h olders.
T A B L E 2-3
S T A T E S A N D W O R L D P R O D U C T IO N A N D
C O N S U M P T IO N
Thousand tons
1952a
1951
U.S.
P roduction
N a t u r a l ...............................................................................
S y n th e tic
.....................................................................
T otal
.....................................................................
C o n su m p tio n
N a t u r a l ...............................................................................
S y n th e tic
.....................................................................
T otal
.....................................................................
S ou rc e : I n te r n a tio n a l R u b b er S tu d y G ro u p .
a. A n n u a l r a te based on J a n -O c t.
W o rld
859
859
1,905
923
2,828
461
771
1,232
1,524
826
2,350
—
U.S.
__
W o rld
820
820
1,765
902
2,667
448
815
1,263
1,466
893
2,359
10
As fo r synth etic r u b b e r , the U n ite d S ta te s R e c o n stru c tio n F in a n c e C o rp o ra tio n h a s been d ire c te d to
p ro d u c e GR-S ru b b e r at an a n n u a l ra te of n o t less th a n
60 0,000 tons until, in a d d itio n to sa tisfy in g all o th e r
re q u ire m e n ts, a G o v e rn m e n t stock of a t least 75,000
tons h a s been a c cum ulated. W h e n th is p o in t is re a c h e d ,
p ro d u c tio n of GR-S r u b b e r m a y be allow ed to fall, b u t
to n o t less th a n 450 ,0 0 0 tons a n n u a lly , a n d only w ith a
c o rre sp o n d in g in c re a se of GR-S stocks u p to a t least
122,000 tons. L im ite d e x p o rts of sy n th e tic r u b b e r fro m
the U n ite d States a re n ow ta k in g place.
T otal w orld c o n su m p tio n is expected to b e a b o u t
the sam e in 1952 as in 1951. T h e re m o v a l o f re stric tio n s
on the use of ru b b e r in the U n ite d S tates is n o t expected
to have any a p precia b le effect on the relatively low level
of n a tu ra l r u b b e r c o n su m p tio n th e re , in view of the
p ric e a d v a n ta g e e n jo y e d b y synthetic r u b b e r e a rly in
1952. H ow ever, the s h a rp fall in n a tu r a l ru b b e r p rices
h a s n a rro w e d the m a r g in a n d re c e n t statistics of ru b b e r
con su m p tio n in th e U n ite d S tates d u r in g th e m o n th of
A u g u st to N o v e m b e r show th a t A m e ric a n m a n u fa c tu re rs
are now u sin g a g re a te r p ro p o r tio n of n a t u r a l ru b b e r
as c o m p a re d w ith the sy n th e tic p ro d u c t th a n e a rlie r in
the y e a r.1 T h e e x te n t to w h ic h c o m p e titio n betw een
the two p ro d u c ts c an take place is lim ite d b y the
re q u ire m e n t th a t a t least 510,000 tons of sy n th e tic r u b b e r
(450,000 GR-S a n d 60,000 b u ty l) m u st be co nsum ed.
T h is am o u n ts to a b o u t 22 p e r cent of to ta l w o rld
c o n su m p tio n of b o th n a tu r a l a n d sy n th e tic ru b b e r .
1.
c .f. L o n d o n E c o n o m is t, 13 D ec 1952.
TOBACCO:
T h e excess of p r o d u c tio n over c o n s u m p tio n , e stim a te d a t 308 ,0 0 0 to n s in 1952, is c o n s id e r a b ly sm a lle r
t h a n i n t h e p r e v i o u s y e a r . F o r n a t u r a l r u b b e r , i t is
3 00 ,0 0 0 to n s in 1952 as a g a in s t 3 8 0 ,0 0 0 to n s in 1951.
T h e U n ite d S tates sto c k p ilin g p r o g r a m m e is n e a r in g
c o m p le tio n , h o w ever, a n d p u r c h a s in g is on a d e c re a sin g
scale, w hile lo w e r g ra d e r u b b e r is g r a d u a lly b e in g
r o ta te d o u t of th e stockpile. T h e o u tlo o k fo r ru b b e r ,
th e re fo re , re m a in s u n c e rta in .
In view of the u n c e rta in tie s in th e r u b b e r situ a tio n ,
the In te r n a tio n a l R u b b e r S tu d y G ro u p re so lv e d to
e sta b lish a W o rk in g P a r t y “ to c o n s id e r w h e th e r
m e a su re s d e sig n e d to p re v e n t b u rd e n s o m e s u rp lu se s or
se rio u s sh o rta g e s of r u b b e r a re n e c e ssa ry a n d p r a c tic a b le ;
to p r e p a r e d ra fts of a n y a g re e m e n ts r e q u i r e d to
im p le m e n t su c h m e a s u re s ; a n d to r e p o r t b a c k to the
S tu d y G ro u p as so o n as p o ssib le .”
Tobacco.
P ro d u c tio n of to b a c c o in the F a r E a s t d e c lin e d in
1 9 5 1 /5 2 , as a re su lt of a d e c re a se in a r e a u n d e r
c u ltiv a tio n (see ta b le 2 - 4 ) . G e n e ra lly sp e a k in g , yields
in 1 9 5 1 /5 2 w ere n o t v e ry d iffe re n t f r o m p re v io u s y ears,
a lth o u g h th e y c o n tin u e d to be below p re -w a r levels.
D u rin g the c u r r e n t y e a r sig n ific a n t in c re a se s in p r o d u c tio n to o k p la c e in C h in a ( T a i w a n ) , I n d o c h in a a n d
the P h ilip p in e s a n d , to a lesser extent, in C eylon a n d
T h a ila n d . I n I n d ia p r o d u c tio n c o n tin u e d to decline,
m a in ly b e cause of th e d e c re a se in th e a r e a u n d e r the
crop. C o u n trie s w ith la r g e r o u tp u ts te n d e d to inc re a se
th e ir e x p o rts in 1 9 5 1 /5 2 .
T A B L E 2-4
P R O D U C T IO N
AND
AREA
T housand tons and thousand hectares
T otal ECAFE R e g io n
P ro d u c tio n
.....................................................................
A rea
...............................................................................
CEYLON
P ro d u c tio n
.....................................................................
A rea
...............................................................................
CH IN A (T aiw an)
P ro d u c tio n
.....................................................................
A rea
..............................................................................
INDIA
P ro d u c tio n
.....................................................................
..............................................................................
A rea
INDOCHINA
P ro d u c tio n
.....................................................................
..............................................................................
A rea
PHILIPPINES
P ro d u c tio n
.....................................................................
A rea
...............................................................................
THAILAND
P ro d u c tio n
.....................................................................
A rea
...............................................................................
S o u rc e : F A O
a . Unofficial.
1934-38
( A v e ra g e )
1 9 49/50
1950/51
1 9 51/52
1,459
1,478
1,173
1,287
1,183
1,286
1,165
1,269
1.0
2 .6 a
4.0a
3.4a
4.0a
3.6a
5.0a
2.3
1.0
10. 0
6.3
5.0
10.6
8.0
344.4
364.0
268.0
348.0
255.0
340.0
217.0
296.0
13.0
15.0
6.8
11.0
7.7
12.0
12.4
17.0
34.7
67.0
24.1
40.0
29.9
41.0
32.5a
56.0a
9.1
16.4
26.0
21.3
30.0
22.4
33.0
10.0
9.6
11
T A B L E 2-5
IR O N O R E P R O D U C T IO N
(M o n th ly averages or calendar m onths)
Thousand tons of iron content
1951
1949
1 9 5 2
1950
Jan-Jun
H o n g K ong
. . . .
I n d i a ....................................
J a p a n ....................................
M a l a y a .............................
P h ilip p in e s
. . . .
2. 5
152
32.4
0.5
17.1
7. 0
161
36.7
27.0
26.8
Jul-Dec
6. 3
35.5
41.6
40.0
A ug
Sep
7. 3
6.2
7. 4
6.0
6.2
44.6
44.5
48.7
39.2
41.4
61.8
55.8
73.0
55.6
50.6
78.1
51.0
50.0
79.8
52.2
Tungsten
Iro n O re a n d F erro -allo y s
A fa irly ra p id increase in w o rld p ro d u c tio n of
tu n g ste n was re c o rd e d in 1951 a n d in 1952, b u t the
sh o rta g e of tu ngsten in c re a se d as d e m a n d e x p an d ed m ore
ra p id ly . In the reg io n , especially in B u rm a a n d K orea,
the im p ro v e m e n t in o u tp u t was slow. In C hina m a in land, o u tp u t is re p o rte d to have re ached in 1950 76
p e r cent of the “ p re -lib e ra tio n ” p e a k a n d in 1951 80
p e r cent.
Iro n ore
P ric e s of iro n o r e 1 in c re a se d d u r in g 1950-52,
m ain ly o w ing to the inc re a se in p rice s of iro n a n d
steel p ro d u c ts in w o rld m arkets. T h e ra te of increase
in p rices fo r iro n ore, ho w ever, w as n o t as ra p id as
t h a t fo r o th e r m etallic m in e ra ls, especially tin. T he
in c re a se in p rices b ro u g h t a b o u t a n in c re a se in o u tp u t
in the P h ilip p in e s, M alay a, J a p a n a n d H o n g K o n g (see
ta b le 2 - 5 ) . S tatistics of I n d i a ’s 1952 p ro d u c tio n are n o t
a vailable, b u t j u d g in g fro m the increase in o u tp u t in
1951 a n d fro m the in cre ase in iro n o re e x p o rts in 1952,
p ro d u c tio n seem s to ha v e a dv anced.
T h e in c re a se in d e m a n d fo r ir o n o re cam e m ain ly
fro m J a p a n w here r a p id p ro g re ss w as re c o rd e d in the
iro n a n d steel in d u s try : th e p ro d u c tio n of p ig iro n a n d
steel ingots in 1951 re g iste re d an in c rea se of a p p r o x im ately 100 p e r cent over 1949, a n d this exp ansion
co n tin u e d till the m id d le of 1952 ( M a y ) .
J a p a n ’s in crease d d e m a n d fo r iro n ore was p a rtly
m et b y an in c re a se in d om estic iro n o re p ro d u c tio n
a lth o u g h th e m a in sup ply c am e fro m im p o rts w hich in
1951 w ere m o re th a n d o uble the level in 1950; im p o rts
c o n tin u e d a t h ig h levels in 1952.2 T h e y cam e m a in ly
fro m H o n g K o n g , the P h ilip p in e s, In d ia , M a la y a, the
U n ited S tates a n d C a n a d a . I n d i a ’s p o sitio n as a
su pplier of iro n ore w ill be f u r th e r im p ro v e d as new
iro n ore deposits to th e extent of 930 m illion tons
have been located in th e M a d ra s a n d M a d h y a P ra d e s h
states, th u s b r in g in g th e to ta l reserves of iro n ore to
10,000 m illio n tons.
2.
Jul
198
M IN E R A L R A W M A T E R IA L S
1.
Jan-Jun
A s in d ic a te d by th e u n it v a lu e o f e x p o r ts o f ir o n ore fr o m In d ia ,
w h ic h in c r e a se d fr o m R s.2 5 .8 p e r to n in 1950 to R s.32 .2 p e r t o n in
1951 a n d s till fu r t h e r to R s.39.2 p e r to n in th e fir s t fo u r m o n th s
o f 1952.
M on th ly a v e r a g e o f ir o n ore im p o rts in t o J a p a n in c r e a se d fr o m
122,000 to n s in 1950 to 288,000 to n s in 1951 a n d d u r in g th e fir st
h a lf o f 1952 reach ed 3 30,000 to n s.
A lth o u g h tu n g sten w as in sh o rt supply, p rices did
n o t increase as ra p id ly as fo r c e rta in o th e r m in e rals
ow ing to allocations by the “ T u n g sten M o ly b d en um
C om m ittee” 3 of th e I n te rn a tio n a l M a te ria ls Conference.
F u r th e rm o r e , in th e c o m m itte e ’s re c o m m e n d a tio n fo r
a llocation fo r the th ir d q u a rte r of 1951, an a rra n g e m e n t
w as in tro d u c e d w h e re b y the spot p u rc h a se p rice of
tu n g ste n w as n o t to be less th a n $55 a n d n o t h ig h e r
th a n $65 f.o.b. p e r sh o rt ton. A lth o u g h one p a rtic ip a tin g
c o u n try w as u n a b le to a gree to th is p ro p o sa l a n d alth o u g h
this p ric e a rr a n g e m e n t was n o t co n tin u e d , th e re has,
in p ractice, been a c o n sid era b le degree of stability of
tungsten p rices in the first h a lf of 1952 ow ing to the
g en eral ad o p tio n of long-term co n trac ts a t p rices ra n g in g
betw een $ 60 a n d $65.
Manganese
W ith th e in c re a se in p ric e s,4 m a n g a n e se o re o u tp u t
in In d ia e x p a n d e d f ro m 9 00,000 tons in 1950 to 1.3
m illio n to n s in 1951. J u d g in g fro m the fu rth e r in crease
in e x p o rts of m a n g a n e se o re fro m In d ia , it seem s likely
t h a t p ro d u c tio n h as been risin g d u rin g 1952. E x p o rts
f ro m I n d ia c o n tin u e d to be d irec ted m a in ly to the
U n ited States b u t also to the U n ited K in g d o m , west
3.
4.
T h is c o m m itte e, fir st con v e n e d on 8 M arch 1951, h as a m em b er sh ip
c o n s is t in g o f A u str a lia , B olivia, B razil, Chile, F r a n c e , G erm an y,
P o r tu g a l, S p a in , S w e d e n , t h e U n it e d K in g d o m a n d t h e U n it e d
S ta te s.
A s in d ic a te d by th e u n it v a lu e o f e x p o r ts o f m a n g a n e s e o r e fr o m
In d ia w h ic h in c r e a se d fr o m R s.96 p e r to n in 1950 to R s.113 p e r
t o n in 1951 a n d still fu r th e r t o R s.1 66 p e r t o n in 1952.
12
G e rm a n y a n d J a p a n . L a rg e r supplies fro m I n d ia a n d
h ig h e r o u tp u t elsew here h a v e he lp ed to ease th e w o rld
sh o rta g e of m a n g a n e se in 1952.
p e a k in F e b r u a r y 1951 w h e n th e p ric e w as a b o u t
tw ice th a t in th e first h a lf of 1950 a n d a lm o st two
a n d a h a lf tim e s th e a v e ra g e o f 1949. U n d e r the
stim u lu s o f h ig h e r p r ic e in c re a se s th e r e g io n ’s p ro d u c tio n
o f b o th tin -in -c o n c e n tra te s a n d tin m e ta l in c re a se d
d u r in g th e se c o n d h a lf o f 1 9 5 0 (see ta b le s 2-6 a n d 2 - 7 ) .
T h e e x p a n sio n re s u lt fro m th e w o rk in g of lo w e r g ra d e
g ro u n d a n d m a r g in a l m in e s, r a th e r th a n fro m new
in v e stm e n t f o r th e d e v e lo p m e n t o f h ith e rto u n ta p p e d
re s o u rc e s ; as th e K o re a n -w a r b o o m w a s to o s h o r t a
d u r a tio n to serve as a stim u lu s f o r in c re a s e d p ro sp e c tin g
a n d in v estm en t.
I n d ia ’s p o sitio n as a m a jo r su p p lie r of m a n g a n e se
o re will be im p ro v e d as a re su lt o f field w o rk u n d e rta k e n
b y the G eological S u rv ey in O rissa w h ich is ex p ected
to yield o ver a m illio n to n s o f m a n g a n e se deposits.
I n th e P h ilip p in e s m a n g a n e se p ro d u c tio n d e cre ase d
c o n tin u a lly fro m 3 2 ,7 3 9 ton s in 1 9 4 8 /4 9 to 18,950 to n s
in 1 9 5 1 /5 2 , o w ing to la c k o f su itab le ore.
In o r d e r to stab ilize p ric es, tw o in te rn a tio n a l
c o n feren ces w ere h e ld in 1950 a n d in 1951 b u t no
a g re e m e n t w as re a c h e d b etw een th e p r o d u c e r a n d
c o n su m e r c o u n trie s .2
N o n -F e rro u s M etals
T in
In 1948, w o rld tin p ro d u c tio n ex ceed ed c o n su m p tio n a n d th e g a p w id e n e d in 1949 (see a p p e n d ix
ta b le 2 -1 ). T h e o u tb re a k of th e K o re a n w a r in c rea se d
b o th sto c k p ilin g d e m a n d s a n d co m m e rc ia l co n su m p tio n
o f tin so th a t in 1950 th e excess su p p ly w as re d u c e d
c o m p a re d w ith 1949; co m m e rc ia l stocks of tin also
d e c lin e d .1 T h e p ric e of tin rose ra p id ly , rea c h in g its
1.
2.
W orld c o m m e r c ia l s to c k s o f t i n h a d d e c lin e d f r o m 173,6 00 to n s a t
th e e n d o f 1945 t o 133,000 to n s in 1949 a n d w e r e r ed u c ed fu r t h e r
t o 120,000 to n s a t t h e e n d o f 1950.
T h e fir s t w a s th e U n it e d N a t io n s c o n fe r e n c e h eld a t G e n e v a in
O c t-N o v 1950. I n J a n 1951 th e g o v e r n m e n ts o f F r a n c e , t h e U n it e d
K in g d o m a n d t h e U n it e d S t a te s p r o p o s e d t h e c r e a tio n o f in t e r n a tio n a l c o m m o d ity c o m m it te e s a n d in M a rc h a c o n fe r e n c e w a s held
b e tw e e n th e U n it e d S t a te s a n d s o m e o f th e m o s t im p o r t a n t tin
p r o d u c in g a n d c o n s u m in g c o u n tr ie s .
T A B L E 2-6
T IN -IN -C O N C EN TR A TES P R O D U C T IO N
(M onthly averages or calendar m onths)
Tons
B u r m a .............................
C h in a e
.............................
In d o n e s ia
. . . .
J a p a n ....................................
L ao s a n d V iet-N am e
M a l a y a .............................
T h a i l a n d .............................
T o t a l .............................
1 9 5 2
1 9 5 1
1 9 5 0
Jan-Jun
Jul-Dec
Jan-Jun
Jul-Dec
Ja n-Jun
Jul
A ug
Sep
129
340
2,661
24
5
4,902
788
8,849
129
340
2,774
31
5
4,841
967
9,087
138
400
2,591
35
138
400
2,656
38
80e
400
2,691
49
80e
400
3,448
56
80 e
400
3,474
50e
80e
400
3,009
50e
8
8
8
8
8
8
4,744
791
8,707
4,937
818
8,995
4,775
743
8,746
4,925
776
9,696
4,831
783
9,623
4,564
819
8,930
So u rc e : I n te r n a tio n a l T in S tu d y G ro u p .
e. E stim a te d .
TABLE 2-7
T IN M ETAL PR O D U C T IO N
(M onthly averages or calendar m onths)
Tons
C h in a e
.............................
J a p a n ....................................
M a l a y a .............................
T o t a l .............................
19
19 5 1
19 5 0
5 2
Jan-Jun
Jul-Dec
Jan-Jun
Jul-Dec
Ja n-Jun
Jul
A ug
Sep.
340
29
5,715
6,084
340
37
5,926
6,303
400
45
5,555
6,000
400
52
5,607
6,059
400
51
5,108
5,559
400
55
5,491
5,946
400
50e
5,796
6,246
400
50e
6,183
6,633
S o u rc e : I n te r n a tio n a l T in S tu d y G r o u p .
e. E s t im a te d .
13
T A B L E 2-8
IN D IC E S O F M E T A L P R IC E S IN L O N D O N
(1949= 100)
1950
A l u m i n i u m ..................................................
C o p p e ra .........................................................
L e a d ................................................................
N ickel
.........................................................
T i n ................................................................
Z i n c ................................................................
1952
1951
Jan-Jun
Jul-Dec
Jan-Jun
Jul-Dec
Jan -M ar
A pr-Jun
Jul-Sep
115.9
120.5
90.5
132.5
100.9
109.3
124.1
147.6
117.4
155.3
150.9
160.4
130.6
158.1
144.6
168.3
206.6
175.9
130.6
172.3
172.9
180.9
157.1
211.4
156.0
170.2
166.6
181.0
164.6
214.9
162.2
180.0
140.4
181.0
163.2
192.0
162.2
214.0
128.5
181.0
161.9
141.8
S ou rce: I n te r n a tio n a l T in S tu d y G ro u p .
a . E le c tr o c o p p er.
T o w a rd s th e en d of th e first q u a r te r of 1951,
how ever, th e m o n o p o liz atio n of U.S. im p o rts by th e
g o v e rn m e n t th o u g h th e R e c o n stru c tio n F in a n c e C o rp o ra tion, th e decrease in sto ck p ilin g d e m a n d a n d also in
co m m ercial co n su m p tio n of tin in th e U n ite d S ta te s1
cau sed tin p ric es to fall r a p id ly fro m F e b ru a ry to
A u g u st 1951.
In 1952, tin p rice s w ere levelling off a t h ig h e r
levels th a n those a t w h ich th ey h a d stood b efo re th e
K o re a n w ar. A m ea su re of p ric e su p p o rt a n d p ric e
sta b ility w as secured by th e two lo n g -term tin agre em e n ts
w hich th e U n ited States co n clu d ed w ith In d o n e sia on
th e one h a n d a n d w ith th e U n ite d K in g d o m a n d
M a la y a on th e o th er. In these agre em en ts pric es h a d
been fixed a t an eq u iv a len t of £965 p e r to n in L o n d o n .2
R eg io n a l tin o u tp u t, w hich c o n tra c te d w hen p rice s
fell d u r in g 1951, w as s tim u la te d a g a in b y th e firm e r
p ric e te n d en cy a n d th e g re a te r sta b ility secured by these
ag reem en ts.
Copper, lead and zinc
T hese m etals w ere in sh o rt su p p ly in 1950 a n d
1951, a n d c o p p e r a n d zinc ha v e been su b je c t to
allo catio n s b y th e C opper-Z inc-L ead C om m ittee of th e
In te rn a tio n a l M a te ria ls C o n feren ce since 1951. D u rin g
these tw o y e a rs th e p ric es o f all th ese m etals rose ra p id ly
(see ta b le 2 - 8 ), b u t in e a rly 1952 p ric e s first f o r le a d
a n d la te r fo r zinc fell as m o re supplies b ecam e av ailable.
C opper h a s co n tin u e d to be in sh o rt supply, w ith fu rth e r
p rice in creases d u r in g 1952 (9 m o n t h s ) .
1.
T h e d eclin e w a s m a in ly du e t o v a r io u s g o v e r n m e n ta l r e s tr ic tio n s
fir st issu ed in D e c 1950 an d fu r t h e r tig h te n e d in 1951. S e e I n te r n a t io n a l T in S tu d y G roup, T in , 1950-51, A R e v ie w o f th e W o r ld
T i n I n d u s t r y , p p . 64-65.
2.
S e e C h a p ter 4, “ F u r t h e r d e c lin e o f e x p o r t e a r n in g s ” , p . 30, fo r
d etails.
W h e n th e supply p o sitio n of zinc eased, in te rn a tio n a l
zinc allocations fo r the second q u a rte r w ere suspended
b y th e I n te rn a tio n a l M a te ria ls C onference in th e last
w eek of M ay a n d no fu rth e r allocations w ere m a d e fo r
th e th ir d q u a rte r. W ith the im p ro v e m e n t in lead
supplies, tra d in g in lead on the L o n d o n M etal E x ch an g e
w as p e rm itte d in O cto b e r 1952 a fte r a suspension of
13 years. In the free tra n sa c tio n s, pric es slu m p ed to
£111 p e r to n as a g a in st th e c o n tro l ra te of £131 a t
w hich th e m e tal w as peg g ed p r io r to decon trol. F ree
d ea lin g s in zinc will be resu m e d in L o n d o n a t the
b e g in n in g of J a n u a r y 1953.
U n d e r th e stim u lus o f p ric e increases, p ro d u c tio n
of co p p er, lead a n d zinc w ith in th e reg io n in creased in
1951 a n d in 1952 (see ta b le 2 -9 ), as p rice s w ere still
above p re -K o re a n -w a r levels. In J a p a n in te rn a l prices
o f these m etals w ere above those p re v a ilin g in the w orld
m a rk e t. F o r co p p er, th is h a s m e a n t th a t alth o u g h the
In te rn a tio n a l M a te ria ls C on ference fixed J a p a n ’s ex p o rt
q u o ta fo r the th ir d a n d fo u rth q u a rte rs of 1952 a t 4,100
a n d 3,400 to n s respectively, n o t a single to n h a d been
e x p o rte d b y N o v e m b er— in view of th e h ig h prices
offered b y Ja p a n e se sm elters. In th e case of lead a n d
zinc, even th o u g h J a p a n ’s pric e s w ere red uced, as a
re su lt of th e tu r n in m a rk e t c o n d itio n s, the in te rn a l
p ric e level, w h ich w as still ab o v e th e w o rld level, m ad e
ex p o rts difficult.
A lth o u g h In d ia is a p ro d u c e r of these m etals it
relies on s u b sta ntia l im p o rts fo r its req u ire m en ts. T he
I n te rn a tio n a l M ate ria ls C onference allocated to In d ia
8 ,550 to ns of co p p e r a n d 6,500 to n s o f zinc3 fo r the
second q u a rte r of 1952. In d ia , w hich a t p re se n t
p ro d u c e s only refined copper, will b egin p ro d u c in g
electrolytic co p p er in c o n ju n c tio n w ith th e p ro d u c tio n
of silver som e tim e in 1954.
3.
I n d ia im p o rted 32,900 to n s o f c o p p e r m e ta l a n d 26,200 to n s o f
z in c m e ta l in 1950.
14
TABLE 2-9
COPPER, L E A D A N D ZINC P R O D U C T IO N
(M onthly averages or calendar m onths)
Tons
1950
1 9 5 2
1 95 1
Jan-D ec
Jan-Jun
Jul-Dec
Ja n-Jun
Jul
Aug
C opper
J a p a n ........................................................................
P h i l i p p i n e s .........................................................
3,286
865
3,403
996
3,724
1,122
4,172
1,118
4,601
1,118
4 ,572
1, 115
L ead
J a p a n .......................................................................
P h i l i p p i n e s .........................................................
908
73
1,104
41
1,041
54
1,369
103
1,590
340
1,468
216
4,336
5,279
5,458
6,772
7,883
7,343
Copper
I n d i a ........................................................................
J a p a n ........................................................................
560
3,098
572
3,349
627
3,792
546
4,067
498
4,128
469
3,930
L ead
I n d i a ........................................................................
J a p a n ........................................................................
53
832
74
900
71
890
96
1,187
61
1,410
91
1,260
4,084
4,644
4,747
5,863
5,945
5,901
M etallic o re s (m etal content)
Zinc
S m e lte r p ro d u c tio n a
Zinc
J a p a n ........................................................................
a.
F r o m b oth d o m estic a n d im p o rted ores a n d c o n c e n tr a te s .
Non-M etallics Other Than Fuel
Sulphur
T h e w orld s h o rta g e of s u lp h u r c o n tin u e d in 1951
a n d in the first h a lf of 1952. In the second h a lf of
1952 the sh o rta g e w as less se rio u s a n d th e S u lp h u r
C om m ittee of th e I n te rn a tio n a l M a te ria ls C o n feren ce
allocated 3.3 m illion to n s of s u lp h u r w h ic h w as a b o u t
2 51,000 ton s m o re th a n w as av a ila b le in the first h a lf
of 1952. F o r the first tim e also, th e new allo catio n s
allow ed a few c o u n trie s e n o u g h s u lp h u r to b u ild u p
th e ir depleted stocks. In th e o p in io n of th e conference,
as the result of its s u lp h u r allo catio n s since J u ly 1951
“ c o n su m p tio n h a s been v irtu a lly b ro u g h t into line w ith
p ro d u c tio n a n d the severe d r a in on stocks h a lte d .”
im p o rta n t c o n su m e rs. J a p a n e s e p r o d u c tio n of refined
s u lp h u r a n d g y p su m in c re a s e d ra p id ly in 1951 a n d
re a c h e d a p e a k to w a rd s th e e n d of th e y e a r. I n 1952,
the ra te of in crease declin ed a n d su lp h u r p r o d u c tio n
p ra c tic a lly levelled o u t d u r i n g th e first e ig h t m o n th s of
the y e a r. In d ia , w h ich relies on im p o rts f o r its supply
of s u lp h u r, w as a b le to o b ta in its m i n im u m re q u ire m e n ts
fo r essential in d u s trie s a fte r h a v in g jo in e d th e S u lp h u r
C o m m itte e of th e I n te r n a tio n a l M a te ria ls C onference.
In d i a w as a llo c a te d 3 0 ,000 to n s f o r th e p e r io d JulyD e c e m b e r 1952. T h is w as e x pected to he lp th e In d ia n
su lp h u ric a c id in d u s try w h ic h h a d su ffe re d fro m
in a d e q u a te su p p lie s of s u lp h u r in th e la st few y ears
c a u sin g its o u tp u t to b e m u c h below c a p a c ity .1
1.
W ith in th e reg io n J a p a n is th e o nly sig nificant
p ro d u c e r of su lp h u r, w hile b o th I n d i a a n d J a p a n a re
A lth o u g h th e in s ta lle d c a p a c it y is 16,000 to n s p e r m o n th , d u r in g
t h e fir st h a lf o f 1952 a c tu a l m o n th ly p r o d u c tio n r a n g e d b e tw e e n
6,000 a n d 9,500 to n s . S ee G o v e r n m e n t o f In d ia , M in is tr y o f C om m e r ce , M o n th ly S t a t i s t i c s o f th e P r o d u c t i o n o f S e le c te d I n d u s tr i e s
o f In d ia .
C h a p ter 3
IN D U S T R IA L
GENERAL
Industrial production in the region is concentrated
in Japan , Ind ia and China. L arge additions to industrial
output are reported from m ainland China. In Japan
and India, however, there have been some signs of a
slowing down of industrial activity. The increase in
output observed in both countries in the preceding year
continued in 1952, but at a dim inishing pace; and by
the spring or early sum m er the rising curve of production
h ad levelled off to a m ore or less horizontal course. As
far as the other countries of the region are concerned,
there are no indications that the recent recessive
tendencies in in ternational trade have interrupted the
policies of establishing industries or of developing
tran sp o rt and power facilities as a basis of industrial
growth. Thus taking the region as a whole, the general
p icture in 1952 has been one of continuing, though
uneven, advance.
China: In the m ainland very large and continued
increases are reported, over the whole field of production.
The inform ation is however not presented in the
conventional statistical form . It consists throughout of
statem ents of percentage or p roportional increases against
base figures for the year of “ liberation” (1 9 4 9 ). Thus,
official figures show a rap id increase in basic industries
d u rin g the perio d 1949 to 1952, e.g. power from 72
to 115, and coal from 45 to 90, pig iron from 11 to
104, steel ingots from 16 to 155, rolled steel from 18
to 167. Increases in consum er goods industries d u rin g
the same period are also stated to have been notable,
for example, cotton yarn from 72 to 144, cotton cloth
from 73 to 161, cigarettes from 83 to 145 and wheat
flour from 78 to 106. The year 1949, the year of
“ liberation,” m arked however a very low level of
economic activity in m ainland C hina (see appendix
table 3-1).
Increases in in dustrial production are especially
m arked in the N ortheast, the h ea rt of indu strial China,
where state enterprises now predom inate. In other p arts
P R O D U C T IO N
of China state enterprises have extended in scope,
although private enterprises under government control
are still functioning. Such control takes the form of
allocation of raw m aterials and of transport facilities
as well as production for governm ent orders.
The rap id increase in production as represented by
the official figures m ay be accounted for by a num ber
of factors of which the m ost im portant are the restoration
of internal peace and order, the rehabilitation of transport
especially railways, and the application of competitive
m ethods as a spur to both workers and firms.
Industrial production in Taiw an also increased in
1952 com pared with 1951 for m any products, especially
coal, power, fertilizers, cement and salt; the output of
sugar, however, declined. (See appendix table 3-2).
Japan: Ja p a n ’s industrial expansion in the years
up to 1951 was m ainly supported by the increase in
private investment and in exports, while consumption
was lagging behind. In the course of 1951 these
expansionary forces weakened. Exports ceased to make
fu rth er advance, and after a period of uncertainty
declined sharply in the second and th ird quarters of
1952. Investm ent activity also decelerated after the late
autum n of 1951 (except in power development and
sh ip b u ild in g )1 and output of investment industries began
to contract, partly on account of declining exports. On
the other hand, there has been some increase in public
o r semi-public investment and in governm ent expenditure
on “ national security,” as well as an increase in personal
consum ption. As a result of these conflicting tendencies,
some industries show m ore or less pronounced output
losses, while others, particularly consum er industries
serving the home m arket, have continued to gain ground.
T he net effect on total industrial production has been
a slackening in the rate of growth, between, roughly,
mid-1951 and mid-1952.
1.
F o r e v id e n c e see E c o n o m ic S u r v e y o f J a p a n , 1951-52, b y th e
E c o n o m ic S ta b ili z a tio n B o a r d , J a p a n e s e G o v e rn m e n t, J u l y 1952.
16
TABLE 3-1
JA P A N :
IN D IC ES OF IN D U ST R IA L PR O D U C T IO N
(1 9 3 4 - 3 6 = 1 0 0 )
M a n u f a c tu re s
T otal
I n d u s tria l
p ro d u c tio n
T otal
In v e s tm e n t g o o d s
C onsum er g oods
1950
93.8
93.2
117.2
66.5
1951
Ja n -M a r
A pr-Jun
Jul-Sep
Oct-Dec
.....................................................................
.....................................................................
.....................................................................
.....................................................................
114.3
130.2
129.8
131.8
115.2
131.5
130.9
132.3
151.0
175.4
174.3
173.8
84.4
90.7
90.8
96.0
1952
Jan-M ar
A pr-Jun
Jul-Sep
.....................................................................
.....................................................................
.....................................................................
129.4
135.6
139.1
129.0
136.4
140.2
157.8
167.0
173.3
100.6
104.9
110.7
S ource:
Japan
E c o n o m ic C o u n c il B o a r d .
In d ia : The year 1951 and the early p a rt of 1952
saw a relatively large expansion of industrial production
in India, with basic m aterials, engineering and chemical
industries in the forefront. Better raw m aterial supplies,
capacity extensions and perm itted increases in various
controlled prices stimulated production which reached a
peak level in A pril 1952. Since then there has been
a slightly recessionary tendency, extending not only to
export industries (particularly jute m anu fa ctu rin g ) but
to a fairly wide range of prod ucer and consum er
industries serving the hom e m arket. T his slackening is
probably attributable to m ore cautious buying both on
the p a rt of firms and of consum ers who have taken a
“ wait and see” attitude after the severe b reak in Indian
com m odity m arkets in F e b ru a ry and M arch.
TABLE 3-2
IN D IA :
IN D IC ES OF IN D U ST R IA L PR O D U C T IO N
(1 9 4 6 = 1 0 0 )
1950
C otton
c loth
Jute
S te e l
G e n e r a l e n g in e e r in g a n d e le c tric
e n g in e e rin g
G e n e ra l
in d e x
93.8
76.8
111.2
203.5
105.2
1951
J a n - M a r ...............................
A p r - J u n e ...............................
Jul-Sep
...............................
O c t - D e c ...............................
101.0
106.2
106.5
103.3
75.2
82.3
77.8
85.8
114.7
115.0
115.8
117.6
262.3
258.5
284.9
256.2
113.6
117.3
117.8
120.5
1952
J a n - M a r ...............................
A p r - J u n e ...............................
J u l y ........................................
A u g u s t ...............................
106.2
116.5
128.1
125.4
95.5
87.8
90.9
80.6
124.6
117.1
117.6
117.6
278.4
210.7
217.8
221.3
126.3
126.7
128.8
124.7
S ource:
I n d i a M i n i s t r y o f I n d u s t r y a n d S u p p ly .
17
F U E L AND PO W E R
indications th at in the course of the next few years the
rate of increase will be accelerated.
The region’s share in world coal production shows
a h earten in g increase from 5.9 p er cent d u rin g the
first half of 1951 to 6.9 per cent d u rin g the first half
of 1952, and indicates th at the rate of increase in
production w ithin the region exceeds th at in the rest
of the w orld by a significant m argin.
The fall in the region’s share of electricity production
from the second half of 1951 is partly due to the effects
of abnorm al w eather conditions on the output of
hydroelectric power, principally in Jap a n (which has
three-quarters of the electric pow er capacity of the
region) and secondly in India, but it is also a fact that
the rate of electric power development outside the region
is higher than w ithin the region.
The contribution of the region to w orld production
of petroleum is still low but it is rising, and there are
TABLE 3-3
PRO D U C TIO N OF FU EL AND PO W E R IN EC A FE REG IO N EX PR ESSED
AS A PERC EN TA G E OF W ORLD PR O D U C TIO N a
195
1
1952
1950
C oal
........................................................................................
P e tro le u m , c r u d e .....................................................................
E lectricity
...............................................................................
5.77
2.28
6.27
W o r ld t o t a l e x c l u d in g U .S .S .R . p r o d u c t i o n . C o u n tr ie s c o v e r e d a r e : —
F o r c o a l: C h in a ( T a i w a n ) , I n d ia , I n d o n e s ia , J a p a n , K o re a
( s o u t h ) , M a la y a , P a k i s t a n a n d V ie t- N a m .
F o r p e t r o l e u m : B r u n e i, B u r m a , I n d o n e s ia , J a p a n , P a k i s t a n
a n d S a ra w a k .
Coal
As shown in T able 3-4, coal production in the
region (excluding m ainland C hina) in the first half of
1952 was about 15 per cent higher th an in the
corresponding p erio d of 1951, owing to increased output
Jan-Jun
Jul-Dec
Jan-Jun
5.88
2.34
6.30
6.15
2.41
5.90
6.87
2.43
6.18
F o r e l e c t r i c i t y : B u r m a , C a m b o d ia , C ey lo n , C h in a ( T a i w a n ) ,
H o n g K o n g , I n d ia , J a p a n , K o r e a ( s o u t h ) , M a la y a , P a k i s t a n , P h il ip p in e s , T h a i l a n d a n l V ie t- N a m .
of Jap an and India, though the recovery of m inor
producers, such as Viet-Nam and K orea (so u th ), was
a m arked feature. P roduction in July and A ugust was
about 10 per cent below th at for the first h alf of 1952,
an d m ay indicate a reversal of the trend.
TABLE 3-4
COAL PR O D U C TIO N
(M o n th ly averages or calendar m onths)
Thousand tons
19 5 2
19 5 1
1950
Jan-Jun
C h in a (T aiw a n )
......................
I n d o n e s i a .........................................
J a p a n ..................................................
K o re a (south)
...............................
M a la y a
.........................................
P a k is ta n
.........................................
V iet-N am
.........................................
T o t a l .........................................
e.
E s tim a te d .
117
2,735
67
3,205
47
35
37
42
6,286
130
2,922
74
3,414
1
32
45
49
6,666
Jul-Dec
Jan-Jun
Jul
147
173
3,164
78
4,122
38
26
54
67
7,721
193
2,906
2,888
71
3,805
18
33
41
56
7,058
86
3,822
46
34
42
62
7,191
Aug
190e
2,878
85
3,538
43
29
42
53
6,858
18
The year began in Japan with m ark et and colliery
stocks reduced to about 1 m illion tons, a q u a rte r of
the available m arket stocks at the beginning of the
K orean war. In the m eantim e, m onthly pro d u ction h ad
risen to a postw ar peak of 4.3 m illion tons on the
average of the first q u arte r of 1952. The effects of the
rationalisation in the preceding perio d continued to be
felt; output p er worker was still rising, though it had
no t yet reached pre-w ar levels. M eanwhile, in d ustrial
dem and declined an d m arket an d colliery stocks increased
rapidly (by some 35 p er cent in the first q u arte r of
1952). The decline in dem and an d increase in stocks
continued and were intensified in the second q u a rte r;
though the production of coal fell to an average of
slightly less than 4 m illion tons p er m onth for the second
quarter, and to 3.5 m illion in August. M arket stocks
were over 2.2 m illion tons in June, and were estim ated
to have risen to over 2.5 m illion tons by August.
Governm ent policy since 1951 has been to encourage
the substitution of heavy fuel oil for coal. The present
decline in the dem and in Ja p a n relates principally to
the hom e-produced low-grade coals. H igh g rad e coals
m ust still be im ported; but these foreign coals which
have been chiefly relied on du rin g the recent p erio d to
replace coals from m ainland C hina have recently been
considerably reduced in price.
The course of the development was broadly the
same in India. The production of coal in the first
q u arter of 1952 (with a m onthly average of 3.2 m illion
tons) was considerably above the rate of p ro d u ctio n in
1951 (m onthly average ju st u nder 3 m illion to n s ).
This high rate of production was m aintained in A pril
and M ay, but declined in June, July an d August.
D istribution continues to present serious problem s.
A recurrent them e of com m ent in In dia has been the
extent of the dependence of industries on coal supplies,
and the dependence of coal supplies on im provem ent
in transport. The im provem ents of recent years in the
provision and handling of railw ay waggons do no t seem
to be sufficient; the continued accum ulation of pithead
stocks is p artly attributable to this cause. In claims
for tran sp o rt priority, coal competes sharply with other
commodities, especially food grains. It is estim ated
that p ro p e r provision for the carry in g of coal would
m ean devoting to th at purpose one fifth of all the
waggons available on first class railways.
In China m ainland, great increases in the output
of coal are reported, these being attribu ted largely to
the enthusiasm of the w orkers, an d also to the in tro duction of Soviet m ethods of w ork-planning.
In T aiw an, coal m in in g has been given special
attention by the G overnm ent and the foreign assistance
agencies, since lack of coal, h igh cost of p ro d uctio n and
h igh m ark et p rice have been serious weaknesses in the
island’s economy. P ro d u ctio n has recently increased,
but costs have also increased, a n d the price of coal has
recently risen m ore th an o ther prices.
The output in V iet-N am fo r the first q u a rte r of
1952, with a m onthly average of 67,000 tons, was m uch
above the co rrespo n din g q u a rte r of 1951 (m onthly
average 4 8 ,0 0 0 ). T he outp ut reached 89,000 tons in
M arch 1952, a postw ar record, b u t still m uch below
pre-w ar levels (m onthly average was 195,000 tons in
1938). Exports were increased in the first half of 1952.
In the second quarter, the m onthly p ro d u ctio n figures
fell off from the h ig h level of M arch (A p ril 78,000
tons, M ay 68,000 to n s ), b u t the p erio d as a whole shows
a m ark ed im provem ent.
T he G overnm ent of P akistan has stressed the need
for m ine-owners in B aluchistan to develop an d m odernise
th eir operations. T h o u g h p ro d u c tio n of coal increased
very considerably in the first h alf of 1952, official
statem ents have suggested th a t the prospects of oil
development in P ak istan are relatively favourable, and
that oil fuel would be substituted fo r coal as fa r as
possible. M eanwhile, the expert surveys recently concluded have established the existence of considerable
lignite deposits in both East an d W est P akistan.
In T hailand also, it is planned to develop the use
of lignite fuel, in which a b eginning h as been m ade.
In B urm a, p relim in ary w ork continued in the Kalewa
area, where it is intended to exploit the newly-discovered
deposits of low-grade coal.
The advance of p ro d u c tio n in B ru nei continues to
be striking. It is reported th at d u rin g the first two
m onths of 1952 a record output of 14,000 tons a day
was reached in the Seria field. A new agreem ent was
signed in Ju ne between the operato rs an d the G overnm ent
of Saraw ak, clarifying the tax an d royalty obligations
of the com pany.
In Indonesia, the 1951 level of o utput was slightly
exceeded d u rin g the first half of 1952. T he output
in July and A ugust was m ain tain ed at a hig h level
and reached 728,000 and 708,600 tons respectively.
19
Petroleum
The p ro duction of petroleum in the region is stated in T able 3-5.
TABLE 3-5
CRUDE PETR O LEU M PR O D U C TIO N
(M o n th ly averages or calendar m o n th s)
Thousand tons
19 5 1
19
5 2
1950
Jan-Jun
B r u n e i ..................................................
B u r m a ..................................................
I n d o n e s i a .........................................
J a p a n ..................................................
P a k is ta n
.........................................
S a ra w ak
.........................................
T o t a l .........................................
e.
343
408
Jul-Dec.
420e
Jan-Jun
Jul
Aug
429e
6
8
8
8
534
25
14
5
927
594
29
13
4
1,056
646
28
13
4
1,119
653
26
14
4
1,134
728
27
14
709
26
15
••
E s tim a te d .
There was slow progress tow ards form al agreem ents
between the Governm ent and foreign interests on the
question of the latter’s status, but both parties collaborated effectively in practical m atters, especially in
the development of new production.
The opening, in July, of the th ird distillation unit
of the refinery at B alikpapan completed the rehabilitation of th at installation. Refinery output at Balikpapan
was about 6,000 tons a day in the m iddle of 1952, but
was expected to rise to nearly 7,000 tons a day. The
present crude oil production of the district (about 70,000
tons per m onth, o r half the prew ar) is insufficient to
occupy this refinery fully; the possibility is envisaged
th at it m ay serve a m uch w ider district, since fields in
the B alikpapan area are to some extent “ drying out.”
R ehabilitation at T arakan, where w artim e destruction was very great, had also been nearly com pleted;
by Ju n e 1952, 463 wells were in production, com pared
to 475 in 1942, some 300 of which were totally destroyed
during the war.
P ro d u ctio n in the M inas field (C entral S u m atra)
began in A pril. P lans were m ade in the m iddle of the
year for the reh ab ilitation of the N orth S um atra fields.
The erection of a large drum factory at T jilatjap was
planned, an d m achinery fo r this was received in April.
In Japan, p ro duction of crude petroleum continues
evenly at a rate som ewhat below prew ar, though
consum ption is now considerably above prew ar. The
refinery capacity has however been increased, and is
expected to cover 20 p er cent of the country’s requirem ents of finished petroleum products in 1952. The
supply position eased considerably in the early p art of
1952, by which time “ black-m arket” prices were hardly
above official rates.
In the region generally, present plans m ean that an
increasing proportion of requirem ents will be refined
locally in future years. The Philippines, which produce
no petroleum , m ay become another centre of this
activity for South Asia. The construction of a refinery
was planned to begin in Septem ber 1952 to be completed
in two years, at an outlay of $20 million. Plans for
refineries in Bom bay an d Chittagong have also been
discussed.
In Pakistan, experim ental drillings are continuing
in both the Eastern and the W estern p arts of the country.
Electric Pow er
P roduction of electricity increased throughout the
region in the first half of 1952 (Table 3-6). After the
passing of the abnorm al droughts which affected both
Japan and In d ia in the preceding months, and with the
com pletion of new productive capacity, the supply of
electricity increased in the early p a rt of 1952.
20
TABLE 3-6
E L E C T R IC IT Y PR O D U C TIO N
(M o n th ly averages or calendar m o n th s)
M illion K W H
19
19 5 1
5 2
1950
Jan -Ju n
B u r m a ..................................................
C a m b o d i a .........................................
C e y lo n
.........................................
C h in a (T aiw a n )
......................
H o n g K ong
...............................
I n d i a ..................................................
J a p a n ..................................................
...............................
K o rea, so u th
........................................
M a la y a
P a k is ta n
.........................................
P h ilip p in e s b
...............................
T h a ila n d c .........................................
V i e t - N a m ........................................
T o t a l .........................................
3
1
7
86
24
425
3,236
34
56
15
38
4
14
3,944
Jul-D ec
3
Jan -Ju n
3p
1
9
1
9
104
28
477
3,555
16
64
17
40
5
16p
4,334
1
Aug
Jul
2
9a
108
32
494
3,614
47
79
119
34
534
3,874
55
81
44
5
19
4,479
48
5
19
110
31
502
3,297
36
68
20
43
5
18p
4,143
22
..
34
532
3,681
53
81
48
20
Source:
a.
Jan -A p r.
b.
M a n il a o n ly .
In Japan, the production in the second half of
1951 was severely affected by unusual w eather conditions,
but recovery was ra p id after the New Y ear. G overnm ent plans fo r hydroelectric development are on a very
large scale. In June a law “ for the acceleration of
electric pow er resources developm ent” was passed.
U nder this law, the Electric Pow er Resources Developm ent Com pany was established on 16 Septem ber, to
develop electric power in areas where private com panies
are inadequate. Over one half of the authorized capital
of 100 billion yen is expected to be governmentsubscribed.
In In d ia , sim ilarly, cuts im posed by the irregularity
of the m onsoon w eather were discontinued, an d new
capacity came into operation, so th a t the first half of
1952 showed m ore electricity generated than in the
corresponding period of 1951. The increased availability
of electricity for ru ra l use is a recent feature in India.
The grow th of tube-well irrig atio n in the U nited Province
is sustained by pow er draw n from the Ganga canal
stations. O ther states in In dia have also tube-well
program m es. The first of the new electricity generating
stations und er the plan, at Bokaro, will come into
operation in 1953.
G enerating capacity in Pakistan now totals nearly
100,000 KW , o r about double the capacity at the tim e
of the P artitio n , but is well below in d ustrial needs.
c.
p.
E le c tric ity g e n e ra te d
P r e l i m i n a r y fig u r e .
by B angkok
E l e c t r i c W o r k s o n ly .
The developm ent p ro g ram m e includes large hydroelectric
projects.
P ro d u ctio n in m ainlan d C hina is rep o rted to have
increased from 72 p er cent of the “ pre-liberation peak"
in 1949 to an expected high of 115 p er cent in 1952.
In Taiw an, outpu t shows a steady increase. R ehabilitation is declared to have been com pleted an d a five-year
expansion program m e instituted, the aim of w hich is
to raise output by 1957 to about double the present
level.
The increase in the p ro d u ctio n of electricity in
K orea (south) resulted p artly from better w eather
conditions, but is m ainly attrib u tab le to rehabilitation
and renovation. In d u strial consum ption, at about 7
m illion K W H per m onth at present, is less th an oneth ird of w hat it was fo u r years ago. T he increased
availability of electric pow er is expected to stim ulate the
fu rth e r resto ratio n of in d u strial pro d u ction .
M A N U F A C T U R IN G IN D U S T R IE S
Iron and Steel
The iro n an d steel in d ustry is concentrated in
Jap an , In d ia an d China, w ith lim ited p ro du ction in other
countries. D u rin g the second q u a rte r th ere was a slight
fall in total In d ian p roduction an d in the production
of finished steel in J a p a n . (see T able 3 -7 ).
21
TABLE 3-7
JA PA N AND IN D IA :
IR O N AND STEEL PRO D U C TIO N
( M onthly averages)
Thousand tons
19 5 2
1950
1951
Jan -M ar
P ig iro n a n d fe rro -a llo y s
Japan
...............................................................................
In d ia
...............................................................................
S te el in g o ts a n d c a s tin g s
Jap an
...............................................................................
In d ia
...............................................................................
F in is h e d s te e l
Jap an
...............................................................................
In d ia a
...............................................................................
a.
Apr-Jun
192
142
269
154
308
161
311
150
403
122
542
127
586
136
597
128
272
85
414
91
446
93
428
89
I n c lu d e s s e c o n d a r y p r o d u c ts .
In Japan the industry is actively engaged in the
m odernization p ro gram m e for the purpose of reducing
costs of production th rough replacem ent of existing old
style by up-to-date equipm ent. It is anticipated th at
upon com pletion of the pro g ram m e in 1954, Jap an would
attain a p ro duction of 5.4 million tons of pig iron,
5 m illion tons of steel and 400,000 tons of special steel,
and would be able to m eet both probable domestic and
foreign dem and at lower prices.
In pre-w ar years C hina used to constitute the m ajo r
m arket fo r J a p a n ’s iron and steel products, but recently
A ustralia, A rgentina, Pakistan, etc. have become m ore
im p o rtan t as potential custom ers.
T he in d u stry ’s position with respect to raw m aterials,
including iro n ore and coking coal, has been adversely
effected by increased freight charges and suspension of
supply from m ain lan d C hina. Of the total estim ated
requirem ent of 6 m illion tons of iron ore for 1952, it
is planned to im p o rt 5 m illion tons including 1.9 million
tons from the U nited States and C anada, 1 m illion tons
each from the Philippines and M alaya and sm aller
quantities from In d ia and H ong Kong. In the m eantim e,
Japan has been exploring the possibility of developing
iron ore resources in India, Indonesia, M alaya and the
Philippines. Jap a n also requires for the current year
3 m illion tons of coking coal fo r m etallurgical use.
W hile im ports from the U nited States have tended to
decline, a contract for 1 m illion tons from In d ia is
reported to have been concluded.
In dia produces less th an 2 m illion tons of pig iron
and over 1 m illion tons of finished steel per year.
There is a p roposal to increase the output of the three
existing units by about 500,000 tons of finished steel
in the next 4 o r 5 years. T he Governm ent of India
is actively engaged in planning the installation of new
units in collaboration with Japan and the United States,
possibly also with the assistance of a loan from the
International Bank.
In the m ainland of China, the iron and steel
industry is concentrated in the Northeast. A ccording to
reports, the annual output of iron and steel has now
increased by about 8 times the production of 3 years
ago. C om paring 1952 figures with those of recorded
peak years, the output of pig iron was expected to be
4 p er cent greater, steel ingots 55 p er cent greater and
steel m aterials 67 per cent greater.
A m ong other countries of the region the Philippines
has a num ber of small units for the m elting and rolling
of scrap. One of the plants has 3 electric furnaces for
m aking steel from scrap and a newly installed m erchant
b ar and rod mill. The Governm ent has placed orders
in the United States for a new steel plant, which is
expected to come into operation early next year. In
B urm a there are at present small rolling mills with a
capacity ranging from 400 to 800 tons per year. The
G overnm ent plans to erect a small iron and steel plant
with a capacity of about 16,000 tons annually. Tenders
for m achinery have been called fo r to process her large
resources of scrap. Pakistan has advanced plans for
the construction of additional electric furnaces with an
annual capacity of about 15,000 tons to make billets
from remeltable scrap and supply the existing foundries.
It is also planned to establish a new hand b ar mill with
an annual capacity of 30,000 tons to supplement the
existing rolling m ill capacity, a p a rt of which is of
22
the older type. Thailand has a small iron an d steel
industry producin g about 350 tons of bars per m onth at
T ha Luang, S ara b u ri Province. The G overnm ent is
prom oting plans fo r the construction of an iron sm elting
works in the N orth ern province of P h rae, and for the
production of 100 tons of finished steel shapes daily.
In Indonesia, there are plans for the establishm ent in
central Java of a steel m anufacturing unit with a plant
to utilize the country’s scrap iron resources to the extent
of about 30,000 tons annually. In Ceylon the G overnm ent has under consideration plans to establish a plant
to m anufacture pig iron and steel. It is expected to
produce about 18,000 to 25,000 tons annually of
m erchant sections, bars, rods, hoop iron, belts, nuts,
wood screws, etc. T hough tenders have been called for
an d the Governm ent have approved the scheme in
principle, fu rth er action on the project has been deferred
pending consideration of the Intern atio n al Bank M ission’s
report.
Cement
Changes in the dem and for cement and in the
output of the industry are a good index of changes in
the volume of constructional activity.
In Japan, which is the leading producer of cement
in the region, m onthly average output d u rin g the first
half of 1952 (572,000 tons) was at a som ewhat lower
rate than in the last q u arte r of 1951 (604,000 t o n s ) .
Exports have fallen, and constructional activity in Jap a n
has not expanded fu rth e r since 1951. T he industry is
keenly aw are of the possibility of over-production, but
expects th at the grow th in public investm ent will provide
new outlets.
In the m ainland of China, taking the “ pre-liberation”
peak as the base, output is stated to have risen from
the low level of 31 in 1949 to 66 in 1950 and to 107
in 1951 and is expected to reach 148 in 1952. The
rapid increase in dem and, to which output responded,
arose m ainly from extensive construction work in dyke
and dam building for flood prevention and irrigation,
as well as from other public construction projects.
In India, average m onthly output in 1952 (295,000
tons fo r Ja n u a ry to August) was well above the average
for 1951 (271,000 to n s).
In Pakistan, the output of cement, mostly from West
Pakistan, increased from the F eb ru a ry low of 38,000
tons to 51,000 tons in M arch and 50,000 tons in April,
as com pared with the m onthly average of 42,000 tons in
1951. In view of increasing dem and, the Governm ent
has proposed to install three m ore factories of 400 tons
daily capacity each in W est P akistan, an d has advanced
loans to the C hatak factory in E ast P ak istan to double
its present capacity of 60,000 tons p er year.
In other countries w here p ro d u ctio n is at a low
level, the first half of 1952 witnessed the launching of
g overnm ent plans to expand existing capacity o r erect
new plants. In Ceylon, the K an k esan tu rai State Cement
F actory, with a present p ro d u c in g capacity of 65,000
tons p e r year, is expected to increase its capacity to
90,000 tons, to m eet the c o u n try ’s consum ption req u irem ent of double the present capacity. In Indonesia, a
p roposal was presented to the E xp o rt-Im p o rt Bank for
the building of a new cem ent factory n e a r Sourabaya,
to supplem ent the p ro d u c tio n of the P u d a n g cement
factory. In the P hilippines the cem ent outp ut du rin g
the first eight m onths of 1952 averaged 26,700 tons which
was slightly in excess of the average output of 25,200
tons in 1951. A new up-to-date p o rtlan d cem ent factory
in G uim aras Island was opened in A pril. T he dem and
is increasing owing to governm ent attem pt to speed
up its public works re habilitation prog ram m e. In
Thailand, in addition to the T h ai Cem ent C om pany in
Bangkok which has a daily p ro d u cin g capacity of 460
tons, the G overnm ent has approved the construction in
1953 of a new p lan t at T h a L u an g in S a ra b u ri Province,
with a daily p ro d u cin g capacity of 600 tons, p rim arily
to m anufacture cem ent fo r the C hainat D am an d other
projected hydro-electric installations.
M achinery
M achinery in d ustry in the region is confined to
Jap an , In d ia and C hina. In Japan the index of engineering production, with 1934-36 as the base, rose to the
peak of 183 in the second half of 1951, fro m which
it fell to 170 in the first half of 1952 ow ing to a
decline in overseas dem and, reduced dom estic investment
and shortage of power. T his decline of output applied
to m achinery and electrical equipm ent, b u t n o t to the
production of tra n sp o rt equipm ent.
A m ong other items, p ro duction of m achine tools
has suffered a drastic decline from its w ar-tim e peak.
In 1951 p ro d u ctio n was not m ore th an 9,100 units
(4,600 tons in w eight) as com pared with the war-tim e
peak of over 60,000 units. M an u factu rin g capacity at
present is rated at 16,000 to 20,000 tons. T here was a
slight increase from the second half of 1951 to th e first
half of 1952. F u tu re prospects depend on the tempo
of equipm ent renovation in other industries.
A n in d u stry w here overproduction is feared, an d
where production has actually been falling in the first
half of 1952, is the m an u factu re of textile m achines.
23
The 1952 o utput of spindles is estim ated at 1.8 million
units as against the total estim ated dem and of 1.2
m illion units (tw o-thirds for domestic consum ption and
one-third for e x p o r t). The reported p artia l lifting of
the em bargo on exports to m ainland China is considered
welcome news to the textile m achine m akers.
Jap a n is beginning to m anufacture TV sets, the
num ber of which is expected to reach 25,000 by the
end of September. The only deterring factor is the
high cost under the present lim ited scale of production.
Most m akers have entered into contracts with leading
overseas m anufacturing establishm ents in the United
States for the use of their patent rights and for obtaining
technical aid.
In In d ia production of selected m achinery products
showed increases from the second half of 1951 to the
first half of 1952 in m any items including electric motors,
electric transform ers, sewing machines, bicycles, etc.,
but there was a decline of production in some branches,
p articularly diesel engines. In the m eantim e, the project
for the establishm ent of the m achine tool factory at
Jalahalli, near Bangalore, in collaboration with a Swiss
concern, has taken m ore definite shape. O rders for
p lan t and m achinery w orth about 10 million Swiss
francs have been placed and the equipm ent has started
to arriv e; a provision of Rs.15 m illion for the project
has been m ade in the budget estimates for 1952/53.
Chemicals
The production of heavy chemicals in several
countries of the region continues to m ake significant
progress. This is especially tru e of the fertilizer branch
of the in d u stry which, in this region, includes only
nitrogenous and phosphoratic products. According to
an FAO survey1 based on prelim in ary d ata for the
period Ju ne 1 9 5 1 /Ju ly 1952, production of chemical
fertilizers in the ECAFE region (excluding China m ainland) increased by 20 p er cent as com pared with the
previous year. The outlook for 1952/53 is for fu rth er
increases of about 12 per cent for nitrogen production
and 13 p er cent for phosphoric acid production.
The country with the largest production of chemicals
including fertilizers, in term s of both quantity and
variety of products, is Jap an. This situation is likely
to rem ain unchanged for a considerable period despite
new or additional capacity in C hina (T a iw a n ), India,
Pakistan, the Philippines and other countries. Indeed,
if fertilizers m ay be considered typical, the rate of
im ports by countries of the region other than Japan,
1. FAO, Fertilizers, A World Report on Consumption and Production,
Aug 1952.
2. Supra, section on sulphur, Chapter 2, p. 15.
is still increasing even though production in the last
four countries is expanding.
The shortage of sulphur,2 perhaps the basic chemical
raw m aterial, in those countries which are mem bers of,
or cooperate with, the International M aterials Conference
am ounted to 1.3 million tons in 1951. E arly in 1952
the deficit fo r the year, despite increased production,
was estim ated to be in the neighbourhood of 1.7 million
tons.3 But on the strength of later evidence it now
seems th at the shortage is likely to be of a smaller
order. Jap a n as one of the larger sulphur producers
has a balanced supply. India, on the other hand, had
been experiencing difficulty, although some improvement
was noted during the second half of this year. Effort
to increase production of sulphur, thereby increasing
fertilizer production, hinges on discovery an d utilization
of the m aterial in form s other than the elemental state.
Thus in In d ia and Pakistan gypsum is being exploited
while pyrite has been used in Japan over a long period
and is now being experim ented with in the Philippines.
F or the year ending June 1952 the region produced
510,000 tons of nitrogen contained in fertilizers. This
represents an increase of 80,000 tons of nitrogen and
is due almost in equal m easure to production from the
new Sindri am m onium sulphate factory in India
(capacity about 70,000 tons per y e a r ) 4 and to increased
capacity in Japan. In d ia ’s production am ounted to
38,000 tons, J a p a n ’s 457,000, while K orea (south) and
China (T aiw an) accounted for 300 an d 13,850 tons
respectively. A m m onium sulphate is by fa r the m ajor
source of fertilizer nitrogen in the region. In India it
is probably the exclusive product. Japan produces a
wider range including am m onium nitrate, calcium nitrate
and cyanam ide. The last nam ed is produced in small
quantities in Taiwan.
A dditions to nitrogen capacity m ay be expected in
Ceylon, Pakistan and the Philippines. The Philippines
has its plant under construction with production
scheduled for 1953. Its capacity is 50,000 tons of
am m onium sulphate (about 10,000 tons of nitrogen).
In Ceylon and P akistan negotiations are being concluded
with foreign firms for setting up 80,000 tons am m onium
sulphate plants.
Production of phosphoratic fertilizers increased by
a larger percentage than nitrogenous fertilizers. Of the
total increase of 55,000 tons during 1951/52 Japan
accounted for all but a 4,000 tons increase in Taiwan.
In d ia ’s production fell by 1,000 tons, possibly because
of the dearth of sulphur. Total production in the region
am ounted to 310,000 tons.
3.
4.
International Materials Conference, Report on Operation, 1951-52.
Ammonium sulphate may contain about 18 to 20 per cent nitrogen.
24
TA B LE 3-8
F E R T IL IZ E R P R O D U C T IO N IN T H E EC A FE R E G IO N a
T h o u sa n d tons
A ll f e r t i l i z e r s ..............................................................................................................................
N itro g e n (content)
...........................................................................................................
P h o sp h o ric a c id ( c o n t e n t ) ..................................................................................................
S ource:
a.
1950/51
195 1 /5 2
(E stim ate)
684
429
255
819
509
310
1 9 5 2 /53
(O utlook)
916
567
349
FAO
I n c l u d i n g C h in a
T h a ila n d .
( T a i w a n ) , In d ia , J a p a n , K o re a
(s o u th ), an d
It m ay be of interest to record th a t J a p a n ’s
production of calcium superphosphate in F eb ru a ry
reached 151,800 tons. Subsequently, however, accum ulation of stocks began to cause alarm as exports of this
fertilizer fell off. F rom F eb ru a ry to August, production
has declined from the peak of 151,800 tons to 85,000 tons
while inventories have increased over the same period.
It m ay be recalled th a t India and Jap a n m ade
substantial gains d u rin g 1951 in the production of
caustic soda, soda ash and related products. Since
Jan u a ry 1952 Ja p a n ’s production of caustic soda has
decreased by about 20 per cent. T here are indications
that production will rem ain below capacity production
until at least the th ird q u arte r of 1952.
The situation in In d ia is not quite clear. The
m onthly average of soda ash for the period January-June
1952 was 2,900 tons as com pared with a m onthly average
of 4,000 tons fo r the full year 1951. In July 1952,
production was 4,600 tons. The chief custom ers for
soda ash and caustic soda are the rayon industry and
the paper and pulp m anufacturers. The recent developm ent of the rayon yarn industry should provide a steady
m arket for these chemicals although disposition of
chlorine, a by-product of the electrolytic process, m ay
require special effort.
Small quantities
Taiwan, and in both
ments have concluded
caustic soda plants
facturing capacity.
of caustic soda are produced in
Ceylon and P akistan, the G overnarrangem ents for the provision of
in connection with D D T m an u -
The two m ain producers of sulphuric acid are Japan
and India.
J a p a n ’s production increased d u rin g the
first half of 1952 as com pared with the second half of
1951, while In d ia ’s decreased during the sam e period.
Two plants of 20 and 10 tons per day respectively
have been functioning in W est P akistan an d a th ird (of
10 tons p er day) is to be set up shortly. Still an oth er
10 ton p er day p lan t is to be built in E ast Pakistan.
Ceylon is also installing a small plant. The P h ilippines
and Taiw an produce sm all am ounts.
Since 1947 the pulp in d ustry in Ja p a n has increased
its production from a m onthly average of 23,600 tons
to one of 90,300 tons, owing to p ro d u ctio n fro m newly
built or expanded factories. Alm ost 50 p er cent of
J a p a n ’s p rew ar pulp capacity was installed outside the
m ain islands an d is no longer available to J a p a n ’s
economy. D uring 1951 the in dustry experienced fa v o u rable m arkets and showed an increase over 1950
production of some 45 p er cent. F ro m Ja n u a ry to M ay
1952 production was about 10 p er cent over the 1951
m onthly average.
Some p aper pulp is p roduced in In d ia a n d Taiw an,
but so fa r as is known, no ray o n o r chem ical fibre pulp
is produced outside of Japan. It is possible th a t the
P hilippines m ay im plem ent a pro p osal fo r the construction of six pulp and p ap er mills havin g a total annual
p roduction of 228,000 tons of pulp. Of th a t am ount,
100,000 tons m ay be converted into p ap e r and the
rem ainder exported.
Textiles.
C otton textiles.
The three m a jo r producers of
cotton textiles in the region are, in the o rd e r of
im portance, Ind ia, Ja p a n an d China. Of these, a large
p o rtio n of the o utput from Jap a n , an d a sm aller p ortion
from India, cater to the export m arket.
C hina is
relatively self-sufficient.
25
J a p a n 's cotton textile industry had increased its
capacity when the ban on expansion beyond the 4,000,000
spindle lim it was lifted by the SCAP (June 1 9 5 0 ). This
increase in productive capacity continued in the period
under review, b ut faced with the textile recession, the
G overnm ent h ad to take action to reduce cotton textile
operation by 40 p er cent in M arch 1952 and a lim it
was placed on cotton y arn output to aro u n d 150,000
bales (from the Jan u a ry peak of 178,000 b ales). The
subsequent m onthly production figures of y arn during
1952 were below this lim it which, in view of the gradual
reduction in stocks, was raised to 165,000 bales for
A ugust and September.
Owing to a significant rise in the 1 951/52 crop of
raw cotton in India, cotton textile output rose on a
m onthly basis from 51,000 tons of yarn d u rin g the first
quarter to 52,400 tons d u rin g the second, with corresponding increases of cotton cloth output from 324 million
metres to 346 m illion m etres d u rin g the same period.
This represents a high er rate of output th an was achieved
in 1951. In d ia ’s cotton textile production was largely
absorbed by the dom estic m arket; in fact exports were
deliberately restricted in 1951 in order to m aintain home
supplies. W ith the easing of the supply position,
controls were rem oved in 1952 (until end S eptem ber),
but overseas dem and was too weak to sustain higher
export sales.
In the m ainland of China, taking the “pre-liberation”
peak as equal to 100, cotton y arn output d u rin g 1952
was planned to surpass the peak by 44 p er cent, and
cotton cloth output by 61 p er cent.
A m ong other countries, Pakistan witnessed a rapid
expansion of cotton textile production d u rin g the last
4 years, 1948-51, when the annual output of cotton
fabrics rose from 6.7 million m etres to 9.7 million metres.
T here are now 32 textile mills in the country, all
w orking double shifts, w ith 870 pow er looms. W hereas
at the tim e of partitio n P akistan h ad 177,418 spindles, it
now has 333,126 spindles; the target set by the F irst
Industries Conference is 1,350,000. The P rim e M inister
in the in au g u ral address on 21 A pril to the F irst Session
of the Council of Industries stated th at in respect of
cotton textiles, “ we can reasonably hope to become
self-sufficient w ithin the next 3 or 4 years.” In Burm a,
Ceylon, M alaya an d T h ailan d ,1 development of cotton
textile industry is evidenced in the recent construction,
or proposed construction, of new mills. These countries,
like Pakistan, still depend, however, on the im port of
cotton textiles from India, Japan and the United
Kingdom .
Jute manufactures. India, the w orld’s m ajo r p ro ducer and exporter of jute goods, continued to experience
depression in the industry, owing to the slowing-down
of dem and in m a jo r consum ing countries. The target
of the P lanning Commission for 1955/56 is a level of
production of 1.2 million tons and a level of export of
1 m illion tons, com pared with about 890,000 tons and
780,000 tons respectively in 1951. The prospect for
1952 export is limited, despite the reduction in the
export duty by the Governm ent. On 1 M arch w orking
hours were reduced from 48 to 42½ per week. The
production of substitutes— p ap er bags— in the United
States and elsewhere, and the establishm ent of new mills
in P akistan and the Philippines were factors contributing
to the depression of the industry.
The problem now facing the industry, according to
the C hairm an of the In d ian Jute Mills’ Association at
the latest annual meeting, is th at of m odernizing existing
plant and m achinery. A ccording to one estimate, about
62,000 jute looms are old and require to be replaced
at an estim ated cost of Rs.700 million.
In Pakistan, the G overnm ent aim s to set up jute
mills with 6,000 looms by June 1955. Three new mills
at N arayangunj, E ast Bengal w ith 1,000 looms each, to
be jointly owned by the Governm ent and a private
enterprise, ought to be in full production by 1953.
(The first of these mills has gone into production during
the current y ea r; a second mill will be in production
by the end of 1952, and a th ird by June 1953). Orders
have been placed for another 3,000 looms. The Finance
M inister felt th at the establishm ent of jute m anufacturing
in P akistan would stabilize prices and b rin g new
em ploym ent and prosperity to East Bengal. Em phasis
is also laid on im proved m arketing facilities.
1.
I n T h a ila n d , th e a p p r e c ia tio n o f th e c u r re n c y w h ic h low ered p r ic e s
o f im p o rted c o m m o d itie s, a ffec te d a d v e r se ly th e p ro d u ctio n o f th e
on ly m od ern m ill r e c e n tly esta b lish e d in B a n g k o k ( w it h C hinese
c a p ita l).
Chapter 4
THE FURTHER DECLINE OF EXPORT EARNINGS
T H E G ENERAL V IE W
C hina (T aiw an ) where exports were at a h ig h er rate
th an last year, an d P akistan an d the P hilippines where
they were h ig h er th an in the second half of 1951 though
lower th an in the first half. However, in P akistan, the
total value of exports fell steeply in the second q u a rte r of
1952 on account of the sh arp decrease in prices of
cotton an d jute. H o n g K o n g ’s exports were low er not
only than those in 1951, but also th an those before the
outbreak of the K o rean war.
Owing m ainly to the weakness in raw m aterial
m arkets, the total export earnings of the region in the
first half of 1952 decreased fu rth e r from the peak
reached in the first half of 1951. The export earnings
of fourteen countries of the reg io n 1 totalling $3,826
m illion, were 8 p er cent below the second half of 1951
and 26 p er cent below the first half of 1951 (the boom
p e rio d ). However, export earnings were still 55 per
cent higher than in the half year before the outbreak
of the K orean war.
T he raw m aterial expo rtin g countries generally
suffered the heaviest losses. T h a t b o th prices an d
quantities of exports of several p rim a ry com m odities
(particularly ru b b e r) declined clearly indicates th a t the
decrease in dem and was the do m in an t factor. The
m ovem ent of export prices an d of the q u an tity of
exports in the sam e direction aggrav ated the decrease
in total earnings, tho u gh this was not the case in all
countries. M oreover, the severe price fall placed various
export industries in a difficult position as costs of
The value of exports d u rin g the first half of 1952
of most countries listed in Table 4-1 fell below the level
it had reached in both the first and the second half of
1951. The exceptions— a p a rt from Ja p a n 2— are Burm a,
1.
Not including British Borneo, mainland China, Korea and Nepal
for which data are not available.
2. Japan will be dealt with separately in chapter 7.
TABLE 4-1
V A LU E O F E X P O R T S
(M o n th ly averages)
M illion dollars
1952
19 5 1
1950
Jan-Jun
Jan-Jun
Jul-D ec
Jan -Ju n
R a w m a te r ia l s u rp lu s c o u n trie s
M a l a y a ...............................................................................
In d o n e s ia
.....................................................................
.....................................................................
P a k is ta n a
P h ilip p in e s
.....................................................................
C e y lo n
...............................................................................
66.9
41.7
28.7
23.7
22.5
190.2
111.5
79.6
40.1
36.0
140.6
98.3
47.6
28.2
30.9
111.9
76.3
53.5
31.4
29.0
R ice s u rp lu s c o u n trie s
T h a ila n d b
.....................................................................
B u rm a
...............................................................................
In d o c h in a (C a m b o d ia , L aos, V iet-N am )
19.8
12.5
5.0
27.7
19.3
10.2
26.3
15.1
12.2
25.8
21.8
11.5
O th e r c o u n trie s
In d ia
...............................................................................
C h in a (T aiw a n )c ...........................................................
H o n g K ong
.....................................................................
Jap an d
...............................................................................
T otal
........................................................................................
T otal, e x c lu d in g J a p a n
..................................................
88.4
6.5
42.3
53.8
411.8
358.0
148.4
9.6
82.6
110.3
865.5
755.2
126.0
5.9
47.4
115.5
694.0
578.5
112.4
11.6
38.5
113.9
637.6
523.7
Source: United Nations Statistical Office.
a. For 1950 excluding overland trade (private account only).
b. Source of 1950: IMF; 1951 and later figures based on national
trade statistics taking into account the effect of multiple exchange
rates.
c.
Data are from Monthly Economic Review published by the Bank
of China.
d. Excluding special procurement.
27
production, which had risen d uring the boom period,
resisted adjustm ent. T his applies p articularly to wages
which generally follow the price of food; in the face
of rising— or continually high— food prices, wages are
ra th e r sticky.
As to the rice surplus countries, T h ailand and
Ind o ch ina produce and export in addition to rice a
substantial am ount of raw m aterials, so th at the bearishness in raw m aterial m arkets, especially of rubber,
affected th eir export earnings. However, the m ajo r
com ponent of th eir total export is still rice. T hat the
total value of exports of these rice surplus countries
decreased d u rin g the first half of 1952 is m ainly
explained by the fact that governm ents have decided to
preserve a p a rt of exportable rice for domestic m arkets.
T he decline in In d ia ’s total export earnings was
m ainly attributable to the fall both in the prices and
the quantity of exports of tea and of jute m anufactures.
In d ia ’s exports of cotton goods, however, were m aintained in the first half of 1952.1 The entrepot trad e
of H ong K ong rem ained inactive. In addition to the
em bargo and counter-em bargo on trade with the m ainland
of China, H ong K ong’s entrepot trade was h it by the
fall in the purch asin g pow er of raw m aterial exporting
countries and by the w orld textile recession.
1.
T h e sh a r p c o n tr a c tio n o f I n d ia ’s e x p o r ts o f c o tto n fa b r ic s in th e
s ec o n d q u a r te r o f 1951 w a s n o t s o m u ch th e r e s u lt o f a d e c lin e in
d e m a n d as o f d e lib er a te G o v e r n m e n t a c tio n d e sig n e d t o p r e se r v e
s u p p lie s f o r th e h o m e m a r k e t.
Several governm ents in the region have adopted
m easures to alleviate the decline in exports. Export
control was relaxed in In d ia where, am ong other
m easures, the destinational control of ju te an d cotton
m anufactures was abolished. E xport duties in several
countries were considerably reduced, notably the duties
on cotton, ju te and wool in Pakistan, on ju te m an u factures in India, on rubber, copra and coconut oil,
and tea in Indonesia. Those export duties th at are
levied on a sliding-scale basis, e.g. duties on rubber in
M alaya, and on rubber, coconut products and tea in
Ceylon, were autom atically lowered when prices fell. In
Indonesia, the ru p iah export rate was changed from
3.80 to 11.40 p er dollar.
T H E B EA R ISH N ESS IN RAW M ATERIAL MARKETS
Raw m aterial m arkets rem ained bearish in the first
half of 1952. The dem and for and the prices of almost
all staple raw m aterials of the region, especially of
n atu ra l rubber, copra, coconut oil, hides and skins,
cotton, hem p and jute, declined fu rth er d uring the
period under review. The price of tin, however, was
relatively stable as a result of the two trade agreements
concluded by the United States with the United Kingdom
on behalf of M alaya on the one hand, and with Indonesia
on the other. A brief account of changes in several
m a jo r raw m aterial m arkets d u rin g the first half of
1952 is given below :—
TABLE 4-2
QUANTUM IN D E X OF EX PO R T S OF SELECTED COM M ODITIES
O F EC A FE C O U N TR IESa
(Jan-Jun 1 9 5 0 = 1 0 0 )
19 5 0
Tin m e t a l .............................
R u b b e r .............................
H id e s & s k in s
J u t e ....................................
.............................
C otton
H e m p ....................................
C o p ra & c o c o n u t oil
T e a ....................................
S u g a r ....................................
R i c e ....................................
S o u rc e :
a.
III
IV
125
129
73
143
84
110
152
131
38
99
129
83
216
36
126
170
156
51
91
101
1952
19 5 1
I
II
III
IV
I
II
81
81
125
114
89
103
78
98
16
151
174
143
40
115
80
118
72
176
60
107
161
169
38
89
73
117
75
205
125
127
134
124
151
114
84
94
69
90
90
97
128
109
122
93
231
189
161
134
142
161
123
R u b e r — I n te r n a tio n a l R u b b er S tu d y G roup.
T in — I n te r n a tio n a l T in S tu d y G roup.
T ea — I n te r n a tio n a l T e a C o m m itte e .
O th er s— N a t io n a l s t a t is t ic s .
B a se d on e x p o r ts fr o m t h e fo llo w in g c o u n tr ie s :
R u b b er: N o r t h B orn eo , B r u n e i, B u r m a , C eylon, I n d o c h in a , I n d o n e s ia , M a la y a , S a r a w a k , T h a ila n d .
T in m e ta l: H o n g K o n g , M a la y a (e x p o r ts fr o m H o n g K o n g w e r e
n e g lig ib le in 1951 a n d 1 9 5 2 ).
122
70
156
150
111
165
111
108
H id es a n d s k in s : In d ia .
J u t e : S e a -b o rn e e x p o r ts o f P a k ista n .
C o tto n : In d ia a n d P a k ist a n .
C opra a n d c o co n u t o il: N o r th B orn eo, C eylon, H o n g K on g, Indon e s ia , M alaya, P h ilip p in e s, S a r a w a k , T h ailan d .
T e a : C eylon, In d ia , In d o n e sia , P a k is ta n .
H e m p : P h ilip p in e s.
S u g a r : P h ilip p in e s.
R ic e : B u r m a , In d o c h in a , T h a ila n d .
28
N atural rubber represents a typical case in which
the fall in both prices and quantu m of exports since
early 1951 indicates clearly that the decline in dem and
was the basic cause. The dem and for ru b b e r h a d been
strongly influenced by stockpiling. E arly in the year,
it was stated by the P resident of the U nited States th at
the U nited States stockpiles of n atu ra l ru b b e r h ad reached
a high and “ safe” level an d that it m ight be possible
to begin soon to taper off stockpile purchase of n atu ral
ru b b e r.1 This statement, which h a d an unfavourable
effect on the international ru b b e r m arket, was followed,
in early F ebruary, by the discontinuation of purchases
of five of the lower grades of crude ru b b e r.2 This
restriction hit especially Indonesia, the m a jo r exporter
of low grade rubber. By June 1952, a surplus stock
of about 300,000 tons of low g rade ru b b er h ad
accumulated in Indonesian ports. As to high grade
rubber, the change in the ru p iah export rate an d the
introduction of the dollar exchange certificate in F eb ru a ry
have increased the competitive power of the Indonesian
pro du ct an d forced down the price of ru b b e r in M alaya.
The price of ru b b er in Singapore after a p eriod
of m oderate fall d u rin g the latter half of 1951 dropped
sharply du ring the first half of 1952. In the second
q u arter of 1952, it was 56 per cent lower than in the
first q uarter of 1951, the peak period. The volume of
ru b b er exports from the region declined du rin g the
same perio d by 28 per cent.
The decontrol of n atu ral ru b b er in the U nited States
was welcomed by the prod ucin g countries.3 However,
rub ber was decontrolled on the condition th a t the
consum ption of the synthetic prod uct in the U nited States
should not fall below a certain m inim um ,4 and that the
Government-built synthetic plants should be kept in peak
operation, for shifting quickly to em ergency production
if necessary. It is only within these limits th at n atu ral
rub ber is allowed to compete with synthetic ru b b e r in
the U nited States m arket. It was estim ated th at in 1951
synthetic ru b b er was preferred for products representing
some 25 per cent of the total consum ption of new rubber.
The preference for n atu ral ru b b er was about 30-35 per
1.
2.
3.
4.
A m e s s a g e fr o m th e P r e s id e n t o f th e U n it e d S t a te s t o th e C o n g r e s s fo r th e e x te n s io n o f th e R ubb er A c t.
T h e o n ly e x c e p t io n t o th e n e w r u lin g is rubb er offered by T h a ilan d , o w in g to th e b u y in g a g r e e m e n t w h ic h th e U n it e d S t a te s
G o v e r n m e n t h a d con clu d ed w it h T h a ila n d in 1951.
In A p r il 1952, th e s p e c ific a tio n c o n tr o l w h ic h lim its th e a m o u n t o f
n a t u r a l rub b er t h a t m a y be used in m a k in g e n d -p r o d u c ts ( w it h
th e e x c e p t io n o f p a le a n d so le c r e p e ) w a s r ev ok ed . S p ec ific in v e n to r y lim its fo r m a n u fa c tu r e r s w e r e a ls o r em o ved . I n J u n e , th e
im p o r t in g o f rubb er w a s r e v e r te d to p r iv a te b u sin e s s, s u b je c t to
lic e n c es.
See C h a p ter 2, R a w M a te ria ls.
cent in tyres a n d other specialities. T he re m a in in g 45
per cent or less represented an area of indifference
determ ined by price. The p rice of general purpose
synthetic ru b b e r has been reduced to 23 cents p e r pound
since early M arch by the U nited States R econstruction
F inance C orporation (R F C ) which controls the synthetic
ru b b e r industry. F o r the n a tu ra l p ro d u c t the London
price at the beginning of Decem ber 1952 hovered around
26 d. or approxim ately 30 cents p e r p o u n d ( R S S ) .
As in the case of ru b b e r, b oth prices a n d volume
of exports of copra and coconut oil declined fu rth er
d u rin g the first half of 1952. T he prices of cop ra and
coconut oil were ab o u t one th ird below the pre-K orean
W ar level and one half of th at in the first q u a rte r of
1951, the peak period. The slackness in dem an d was
due m ainly to heavy inventories in im p o rtin g countries
in N o rth A m erica a n d E urope, to good harvests of cotton
an d other seed oil crops, and to in creasing com petition
from babassu oil and synthetic detergents.
The prospect of the reg io n ’s export of cop ra and
coconut oil is ra th e r uncertain. In W estern Europe,
except G erm any, it appears th a t the p e r capita consum ption is nearly at the pre-w ar level. In the U nited
States, the development of synthetic detergents produced
m ainly from petroleum has restricted the use of fats
and oils in the soap industry. The an n u a l am o un t of
coconut oil used by the soap industry, as rep orted by
the Soap Institute, was reduced by one half between
1947 an d 1950. On the other han d, the ann ual per
capita consum ption of synthetic detergents increased
from 3 to 8 pounds d u rin g the sam e p erio d .5 The
three p er cent excise tax on coconut oil im p orted from
the P hilippines also reduced its pow er to compete with
other close substitutes p ro du ced in the U nited States.
The price decline in copra an d coconut pro d u cts m ight
be m ore than ju st tem porary, and m igh t reflect a
long-term trend.
The slackening in the rate of purchases fo r stocks
since late 1950 has reduced the d em and for raw jute.
The heavy purchases in the previous season, especially
in several E u rop ean countries, have greatly im proved
the stock position of foreign m anu facturers. M oreover,
there was a strong expectation of a very large ju te crop
in 19 52/53, and the com petition am ong the two jute
exporting countries, In d ia and P akistan, was increasing.
5.
T h e A m e r ic a n C h a m b e r o f C o m m erce J o u r n a l , F e b 1952. p . 60-20,
M a n ila .
29
The price of raw ju te in E ast P akistan thus fell by 40
p er cent in the first q u arter of 1952 from the peak of
the second q u arte r of 1951. The quantity of raw jute
export from P ak istan was 16 p er cent lower in the first
h alf of 1952 th an in the corresponding period in 1951.
In order to m aintain prices of ju te at a level which
m ight ensure a fa ir retu rn to the cultivator, the
G overnm ent announced in late M arch 1952 a ju te support
scheme au thorizing the Jute B oard to buy ju te at fixed
m inim um price. It is estim ated th at by the end of
M ay, the G overnm ent had purchased about 330,000 bales
of jute. Because of the low foreign dem and, the
G overnm ent was unable, however, to take up all the
jute offered at the floor price an d the m inim um price
h ad to be reduced by one fourth. B eginning 1 July,
1952, export duty on raw ju te was substantially reduced.1
As ju te in P akistan was planted when the price of
raw ju te was very high, it is expected th at the com ing
new crop will be nearly as big as the previous crop.
There is also a sizeable am ount of carry-over stock.
Meanwhile, India, which norm ally buys large quantities
of P akistan ju te, is well stocked and its own crop in
1952/53 is also expected to be large, as the trade
difficulties between these two countries an d the special
levy on ju te export to In d ia 2 have stim ulated the
expansion of ju te plantation in India. M oreover, In d ia
is p lann in g to prom ote its own raw ju te sales in overseas
m arkets particularly in N orth Am erica. The lower
exchange rate of the In d ian rupee in relation to the
P ak istan rupee helps In d ia ’s jute export in competition
w ith th a t from Pakistan. All these are uncertainty
factors in the m ark et outlook fo r jute.
The up w ard tendency in prices of raw cotton in
P akistan since October 1951 continued until the end of
Jan u a ry 1952.3 However, increased selling pressure
caused by larg er arriv als from upcountry and the
announcem ent of an E xport-Im port Bank Loan to Japan
for U nited States cotton purchases d u rin g the current
season checked the price rise. In addition, there was
a substantial reduction of foreign dem and m ainly because
1.
2.
.
F o r d e s tin a t io n s o th e r th a n In d ia , th e r ed u c tio n r a n g e d fr o m 46
to 57 p e r c e n t, d e p e n d in g o n th e g r a d e . A s to e x p o r t d u ty o f
ra w ju te to In d ia , th e n e t r ed u ctio n s w e r e 11 t o 21 p e r c e n t, a ft e r
a llo w in g f o r t h e e x p o r t lic e n s in g f e e a p p lie d to s h ip m e n ts to th a t
c o u n tr y .
J u t e w a s e x clu d e d fr o m th e la t e s t tr a d e a g r e e m e n t b e tw e e n th e s e
t w o c o u3 n tr ie s .
T h e w o r s e n in g o f th e E g y p tio n s itu a t io n a n d th e s u c c e s siv e rep o r ts o f a s m a lle r A m e r ic a n cro p h a d h elp ed t o m a in ta in a firm
to n e in th e m a r k e t, w h ic h w a s a ls o s u p p o r te d b y th e in c r e a se d
d e m a n d fr o m J a p a n a n d s e v e r a l n on -d o lla r c o u n tr ie s . T h e w o r s e n in g d o lla r p o s itio n o f m a n y c o u n tr ie s h a d in d u ced th e m to
d iv e r t p u r c h a s e s to P a k is t a n c o tto n , a t p r ic e s w e ll a b o v e A m e r ic a n p a r itie s .
of the textile recession. The cotton m arket at K arachi
grew uneasy and broke sharply a few days before the
end of Jan u ary , resulting in the closure of the m arket
fo r a few days tow ard the end of F ebruary. In order
to m aintain prices, the Governm ent of P akistan a n nounced a price support scheme on 1 M arch authorizing
the Cotton B oard to buy cotton at fixed floor prices.4
F orw ard tra d ing in cotton was suspended.
A lthough the P akistan Governm ent h ad by these
m easures m aintained its internal prices of cotton, foreign
dem and shifted to other sources where prices had fallen
m ore than in Pakistan. Meanwhile, cotton from upcountry continued to arrive in large quantities and
heavy stocks were accum ulated by both the Cotton Board
an d private traders. Cotton stocks a t K arachi by the
end of Ju n e were estim ated a t 550,000 bales as com pared
to 151,000 bales a year ago.5 The position had been
aggravated by the abolition of the E gyptian export duty
on cotton in May.
W ith a view to facilitating sales, the Cotton Board
of P akistan had introduced export subsidies since early
April. It perm itted sales ab ro ad of certain varieties of
cotton at prices below the governm ent support levels
and agreed to m ake good the difference to the exporter
between the m inim um prices an d the actual export
prices, provided the transactions h ad p rio r approval of
the Board. The Cotton B oard was also authorized to
sell, for purposes of export, stocks held by it at 10
per cent lower th an the support level. In August, the
price support scheme was abolished.
Following the change in the buying policy of the
U nited States, the price of tin m etal im proved further
in early 1952, an d rem ained rem arkably stable during
the first h alf of the year. In Jan u a ry 1952, an AngloA m erican metals exchange agreem ent was concluded
which involves the repurchase of the M alayan tin metal
by the U nited States. A ccording to this agreem ent the
U nited K ingdom will in 1952 get about one th ird more
steel and related metals from the United States than
was initially announced, and in turn, the United States
will get 20,000 long tons of M alayan tin and 55.1 million
pounds of C anadian alum inium . The agreed price of
tin is $1.18 p er pound, f.o.b. Singapore. The am ount
of tin m etal thus supplied accounted for one third of
total M alayan production of this commodity.
4.
5.
T h e floor p r ic e fo r fu lly g ood 2 8 9 F R oller g in n e d c o tto n o f 1 5 /1 6 "
s ta p le s w a s fix ed a t R s .9 0 /- w ith a p p r o p r ia te p r ic e d ifferences for
o th er v a r ie tie s a n d “ o ff” a n d “ o n ” m a r g in s fo r d iffe re n tia l g ra d es.
R e p o rt o f th e C entra l B o ard o f D irectors, S ta te B a n k o f P a k ista n ,
1951-52, p . 24. I t is a ls o r e p o r t e d t h a t g o v e r n m e n t c o tto n s to c k s
rea ch ed 3 00,000 b a les.
30
The initial result of the agreem ent was to raise the
domestic price of tin m etal in the U nited States from
$1.03 p er p o u n d to $1.2105 an d to raise the price in
Singapore by about 10 p er cent between Decem ber 1951
an d F eb ru a ry 1952. The steadiness of the Singapore
price d u rin g the subsequent m onths was chiefly due to
the standing orders placed by the representatives of the
B ritish Governm ent in its effort to fulfil the agreem ent
with the United States. P urchase of M alayan tin by
other countries, however, showed no increase.
M eanwhile, the B ritish G overnm ent p u rch ases were
virtually completed. D em and from C ontinental E urope
was also slack. However, it is generally believed th at
com m ercial stocks in the U nited States are low a n d it
seems unlikely th a t A m erican tra d e rs will be able to
stay out of the m arket fo r long.
CHART 2
W H O L E S A L E P R I C E IN D IC E S O F S E L E C T E D
E X P O R T C O M M O D IT IE S
J A N -J U N 1 95 0=1 0 0
In M arch another agreem ent on tin, a m edium -term
contract, was concluded between Indonesia an d the
United States, stipulating th at the U nited States w ould
buy 18,000 long tons of Indonesian tin a y ea r.1 This
agreem ent m arks an im portant move in A m erican com m ercial policy, as it covers a p erio d longer th an one
year custom arily accepted by the United States. F o r
the first two years the price has been fixed a t $1.18
f.o.b. D jak a rta p er p o u n d which is the sam e as th at
agreed with the United K ingdom fo r the bulk sale of
M alayan tin. The price fo r the th ird year will be
discussed in 1953, in accordance with the m arket price
then prevailing. The agreem ent also provides for an
optional 2,000 long tons annually, which Indonesia is
free to sell either to the R FC o r on the free m arket.
The am ount of tin thus offered by Indonesia accounts
for m ore than 60 p er cent of its production.
The agreed price should thus set a floor lim it to
tin prices for the com ing two years, and give producers
confidence in m ain tain in g and even expanding output.
In early August, the R FC ceased to be the sole
im porter of tin for the United States. T he sixteenm onth ban on private im ports of tin ended; an d tin
metal m ay be purchased at any price. C ontrols of the
domestic use of tin were also relaxed.2 T he R FC ,
however, retained its rig h t to buy and sell tin at the
ceiling price of $1.2105 p er pound. The A m erican
im porters will be able to find custom ers fo r th eir m etal
only if they can offer it below this level. So far,
A m erican trad ers are not showing inclination to buy
even at m uch lower prices th an this.
1.
B u t sh ou ld p r o d u ctio n drop, In d o n e s ia w o u ld n o t b e o b lig ed to
d e liv e r m o r e th a n 85 p e r c e n t o f it s p r o d u ctio n .
2.
C on su m ers m a y n o w b u y t in fr o m a su p p lie r o f th e ir o w n c h o ic e .
T h e y s till m a y n o t u s e m o r e th a n th e a m o u n t a llo c a te d b y th e
g o v e r n m e n t, b u t c a n r e c e iv e a llo c a tio n s fo r th r e e -m o n th p e r io d s
r a th e r th a n m o n th -b y -m o n th a s b e fo r e .
N o te:
T h e fo ll o w i n g s p e c if i c a tio n s a p p l y t o t h e a b o v e s e le c te d c o m m o d itie s :
T in
R u b b er
H id e s
C o tto n
H em p
J u te
R ic e
Sugar
T ea
C o c o n u t o il
e x -w o r k s; S in g a p o r e .
R .S .S . N o . 1; S in g a p o r e .
r a w , s a lte d , c o w ; C a lc u tta .
r a w , 4 F P u n ja b , R .G .; K a r a c h i.
M a n ila .
r a w , m id dle; N a r a y a n g u n j .
w h it e , g o v e r n m e n t e x p o r t p r ic e ; B u r m a .
M a n ila .
M ed iu m g r o w n ; C olom bo.
M a n ila .
31
ANA LYSIS OF EX P O R T DECLIN E
R aw m aterial exporting countries
The decline in export earnings varied from country
to country, because of differences— and changes during
the period — in the com position of exports. In Malaya,
Indonesia an d Pakistan raw m aterials form a larger
share in total exports th an in Ceylon and the Philippines
where tea and sugar, in addition to several raw m aterials,
are also im p o rtan t items.
T he export earnings in dollars of M alaya, Indonesia
and Ceylon decreased substantially d u rin g the first half
of 1952 (see Table 4 -1 ). In P akistan and the P h ilip pines, the total value of exports in the first half of
1952 was hig her th an in the previous half year but still
lower than in the corresponding period in 1951. In
M alaya the decrease in the total value of exports can
be explained alm ost entirely by the fall in the export
price an d export q u an tum of ru b b e r which in 1950
accounted for ab ou t 60 per cent of M alaya’s total exports.
In Indonesia, the dollar value of ru b b er exports during
the first half of 1952 did not decrease as m uch as in
Malaya, owing p artly to devaluation of the ru p iah for
export1 in F eb ru a ry 1952 which stim ulated Indonesia’s
ru b b er exports. In P akistan, export of jute and cotton
usually accounted for about 80 per cent of the total
value of exports. In the second quarter, prices, quantity
and value of ju te an d cotton exports were substantially
reduced, an d the total value of exports fell by m ore
than one half from the first quarter. The decline
continued in the th ird q u arte r (cf. Table 4 -4).
C om pared with the first half of 1951 (the boom
period) so as to avoid seasonal variations, the decrease
in total export earnings in dollars of these three m ajo r
raw m aterial exporting countries was especially striking.
The decrease was a result of the fall in both prices and
quantum of exports. F o r Malaya, statistics show that
the 41 p er cent decrease in total export earnings was
the com bined result of a 30 p er cent fall in export
prices an d a 19 p er cent reduction in the quantity of
exports. In Indonesia and Pakistan, export volumes are
also likely to have declined along with the fall in export
prices.
In Ceylon, the decrease in total export earnings
d u rin g the first half of 1952 would have been larger
but for the stability of tea exports. In fact, the value
of tea exports slightly increased because a larger export
quantum m ore than offset the price fall. This, however,
was partly seasonal. F o r nine m onths, the price of
tea had been fairly stable, but fell substantially in
M arch 1952. It rose again since June, but in August
1.
T h e e ffe c tiv e r a te o f e x c h a n g e a p p lie d t o im p o r ts w a s n o t c h a n g e d .
it was still below the pre-K orean w ar level. The fall
in tea prices was due not so m uch to a decline in
dem and as to the m arked increase in output in almost
all the principal producing countries. The world dem and
for tea showed no significant deterioration; it m ay
im prove in the near future on account of the abolition
of tea rationing in the United Kingdom ,2 the w orld’s
largest im porter. However, prices of tea have declined
to a level at which a num ber of plantations are actually
w orking at a loss not only in Ceylon but also in other
tea exporting countries in the region, e.g. India, Indonesia
and Pakistan. The relatively high costs of production
m ainly reflect wage increases during the boom .3 In
Indonesia, several tea estates are reported to have
closed down because of this unfavourable price cost
development.
In the Philippines, the rise in exports in the first
half of 1952 com pared with the previous half year was
due almost entirely to the considerable increase in sugar
exports. F o r the first tim e in postw ar Philippine trade
sugar and related products outranked coconut products
as the leading export, thus regaining their pre-war
position.4 Exports of centrifugal sugar in the first half
of 1952 were 28 p er cent greater in volume and 26 per
cent higher in value th an in the first half of 1951. The
production of sugar in the crop year 1952 increased
by about 12 per cent. However, as sugar exports are
seasonally low in the second half of the year, total
exports d u rin g the rem ainder of the year are unlikely
to reach the level of the first six months. Besides the
general weakness of w orld prices and the slack demand
fo r P hilippine export products, the growing dollar
shortage and the increasing com petition from soft
currency areas are of particular significance to the future
of P hilippine exports.
Unlike in M alaya (and probably also Indonesia and
P a k ista n ), prices an d quantum of exports in Ceylon and
the Philippines moved in opposite directions, which
m itigated the change (fall) in export proceeds. Thus
the 20 per cent decrease in the total export earnings
of Ceylon in the first half of 1952 as com pared with
the first half of 1951 was the result of a 25 per cent
fall in export prices accom panied by an increase of 9
per cent in the quantity of exports. Similarly, in the
Philippines, the 21 per cent decrease in export proceeds
was the result of a 23 per cent fall in export prices
accom panied by an increase of 7 per cent in the quantum
of exports.
2.
3.
4.
S e e C h a p ter 1 o n F o o d stu ffs.
R e c e n tly th e r e h a v e b een w a g e r ed u c tio n s. S ee C h a p ter 8.
S u g a r a n d rela te d p rod u cts m ad e u p 36 p e r c e n t o f th e to ta l e x p o r t
v a lu e d u r in g th e fir st h a lf o f 1952, follo w ed b y 29 p e r c e n t fo r
c o c o n u t an d p r e p a r a tio n s , a n d 16 p e r c e n t fo r ab a c a a n d m a n u fa c tu r e s .
32
TABLE 4-3
IND ICES OF U N IT VALUE, OF QUANTUM AND OF TOTA L VALUE OF
EX PO R TSa
(Jan-Jun 1 9 5 0 = 1 0 0 )
19 5 2
19 5 1
Jan-Jun
Jul-Dec
Jan-Jun
177
119
211
161
T otal v a l u e ....................................................................
231
126
285
168
152
159
155
INDONESIAb
Unit v a lu e c ....................................................................
T otal v a lu e d ...................................................................
218
268
182
235
381
466
37 8
577
382
489
350
432p
CEYLONg
Unit v a lu e
...................................................................
Q u a n tu m
...................................................................
Total v a lu e ( d o m e s tic ) .................................................
142
111
162
124
111
94
123
107
97
117
109
116
138
107
122
128
140
169
113
106
119
94
150
133
81
165
115
12 2
1 11
INDOCHINA (C am bodia. Laos, Viet-Nam )
Unit v a lu e
....................................................................
Q u a n tu m
....................................................................
Total v a l u e ....................................................................
141
146
206
153
164
246
160e
153e
230
INDIA
Unit v a lu e
...................................................................
Q u a n tu m
....................................................................
T otal v a lu e f ....................................................................
133
127
165
160
85
138
132
97
112
108
110
118
121
125
128
MALAYA
U nit v a lu e
....................................................................
PHILIPPINES
Unit v a lu e
....................................................................
Q u a n tu m
....................................................................
Total v a l u e ....................................................................
N ote:
a.
b.
12 2
V a lu e in d ic e s a r e c o m p u te d d ire c tly f r o m v a lu e fig u r e s ,
will n ot n ecessa rily equal q u a n tu m tim e s u n it va lue.
Indices a re based on value o f e x p o r ts in n a t io n a l c u r re n c ie s.
F ig u r es fo r A p r 1950-Feb 1952 exclude th e v a lu e o f e x c h a n g e
tifica tes. The rise in 1952 is p r in c ip a lly due to th e c h a n g e in
co n versio n r a te o f th e ru p ia h in F eb fr o m 3.80 ( e x c lu d in g
value o f th e e x c h a n g e c er tific a te ) to 11.40 p e r dollar.
and
c.
c er th e
th e
d.
e.
f.
g.
Rice exporting countries
The rice-surplus countries have been much less
affected by the recent changes in international m arkets
than those surveyed above. Burma, where 80 per cent
of total export earnings are derived from rice, was the
least affected. It was followed by Thailand with 50
per cent and the three States of Indochina where the
share of rice in total exports before the raw m aterial
boom was 50 per cent and 30 per cent respectively.
While m arkets of most prim ary commodities were weak,
rice has been one of the outstanding exceptions. The
export prices of rice were raised in early 1952, the season
when bulk tradin g contracts on rice are negotiated and
concluded between governments, as dem and was strong
while allocations by exporting governments were reduced.
Jul
A ug
Sep
138
106
102
W e ig h te d w h o le s a le p r ic e in d e x
p r ic e s.
In c lu d in g e x p o r ts o f p e tr o le u m .
F i r s t q u a rter only.
L an d -b or n e e x p o r ts e xcluded.
D o m e stic e x p o r ts only.
82
of
18 e x p o r t p r o d u c ts
100
11 1
92
102
78
107
104
113
a t f.o .b .
In Burm a, early in the year, one half of the exportable surplus of rice was allocated for the first half of
1952. Two-thirds of the y ear’s export will be undertaken
by the governm ent and one-third by private trad ers, as
com pared with 90 per cent and 10 per cent respectively
in 1951. The export prices of rice on a governm entto-government basis were fixed for each half year, and
in the first half of 1952 they were abo ut 11 p er cent
higher than in the second half of 1951. Rice for export
by private traders is also provided, th ro u g h tenders, by
the State A gricultural M arketing B oard ; the price paid
by traders m ay change from time to tim e depending on
bids of those subm itting tenders in foreign exchange.
U nder present conditions this price is always higher,
usually by about 10 per cent, than the governm ent trade
agreem ent prices, thus bringing to the State A gricultural
33
TABLE 4-4
TOTA L VALU E OF EX PO R TS AND VALUE OF EX PO R TS OF SELECTED
C O M M ODITIES OF SELECTED ECAFE COUNTRIES
(M o n th ly averages)
19
19 5 1
1950
5 2
Jan-Jun
Jan-Jun
Jul-Dec
Jan-Jun
Jul
Aug
Sep
99
32
74
204
396
54
131
582
264
42
124
430
184
41
118
342
133
49
129
311
137
45
142
324
127
55
135
317
46
16
16
38
245
22
41
66
169
29
41
80
377
62
51
115
443
69
36
167
290
125
34
151p
103
26
177
373
319
605
715
158
423
371
737
909
45
32
18
99
123
61
35
220
37
58
19
115
92
60
8
161
62
20
12
6
101
72
56
26
11
165
62
41
28
10
140
64
38
21
7
129
18
11
6
12
47
34
18
13
16
80
26
5
10
16
56
52
7
59
70
21
92
50
21
72
77
26
104
37
29
36
102
105
61
44
211
100
85
67
252
72
104
61
236
19
17
157
121
23
77
377
156
94
14
104
368
6
43
82
7
24
112
99
89
40
178
406
168
118
60
316
662
R a w m a te r ia l e x p o rtin g co u n trie s
M A LA Y A (mn. M $)
R u b b e r ..................................................
T i n ...........................................................
T otal e x p o rts (including re-export)
IND ONESIA (mn. Rp.)a
R u b b e r ..................................................
T i n ...........................................................
C o p ra
..................................................
O th e rs
..................................................
T otal e x p o rts (ex clu d in g p e tro le u m
& p e tro le u m p roducts)
T o ta l e x p o rts (in clu ding p e tro le u m
& p e tro le u m p ro ducts)
PAKISTAN (mn. Rs.)
Cotton, r a w .........................................
O th e rs
..................................................
T o ta l e x p o rts (in clu d in g re-exports)
CEYLON (mn. Rs.)
R u b b e r ..................................................
.....................
C o c o n u t & p r o d u c ts
T o ta l e x p o rts (dom estic)
PHILIPPINES (mn. P esos)
C o p ra & c o c o n u t oil .....................
Sugar
..................................................
A baca
..................................................
O th e rs
..................................................
T otal e x p o rts (in clu d in g re-export)
44p
14p
12p
70
822
68p
15p
15p
98
15p
34p
48p
69
13
19
7
108
62
23
19
7
110
58
28
19
7
112
54
52
37
86
13
99
40
13
53
28
9
37
153
98
19
76
345
166
82
17
54
319
147
87
15
50
299
174
15
16
39
69
108
10
32
151
58
20
38
116
4
52
42
98
233
39
97
205
574
169
52
53
224
499
130
71
69
244
515
103
105
78
242
529
18p
16p
9p
18p
63
Rice e x p o rtin g c o u n trie s
BURMA (mn. K.)b
R ice a n d rice p ro d u c ts
O th e rs
..................................................
T otal e x p o rts (dom estic)
IN D O C H IN A (C a m b o d ia , L aos,
V iet-N am ) (mn. Pr.)
R u b b e r ..................................................
R ice
..................................................
T o ta l e x p o rts ( s p e c i a l ) ......................
THAILAND (mn. Baht)
R ice c
..................................................
R u b b e r ..................................................
T i n ............................................................
O th e rs
..................................................
T otal e x p o rts (in clu d in g re-export)
275
O th e r c o u n trie s
CH IN A (T aiw a n ) (mn. N.T.$)
Sugar
..................................................
R ice
..................................................
O th e rs
..................................................
T o ta l n e t e x p o r t s ...............................
INDIA (mn. Rs.)d
Jute y a r n & m a n u f a c tu r e s
C otton y a r n & m a n u f a c t u r e s
O th e rs
..................................................
T o ta l e x p o rts (dom estic)
a.
37
F ig u r e s fo r A p r 1 9 5 0 -F eb 1952 e x c lu d e th e v a lu e o f e x c h a n g e cer tific a te s. T h e r ise in 1952 is p r in c ip a lly due to th e c h a n g e in th e
c o n v e rsio n r a te o f th e r u p ia h in F e b fr o m 3 .80 (e x c lu d in g th e
v a lu e o f th e e x c h a n g e c e r tific a te ) t o 11.40 p e r dollar.
b.
c.
d.
p.
106
72
90
196
464
F ig u r e s fo r J u l-S e p 1952 r ela te to th e p o r t o f R a n g o o n only.
P o r t o f B a n g k o k o nly .
E x c lu d in g o v e rla n d tr a d e .
P r o v is io n a l.
34
Marketing Board a larger profit per ton from its supply
to private traders than from its direct sales to foreign
countries. Even if the total quantity of rice exports
should not be larger in 1952 than in 1951, B urm a’s
total foreign exchange earnings will benefit from the
higher export prices.
In Thailand, the baht value of rice export during
the first half of 1952 was slightly lower than in both
half year periods of 1951. It was predicted at one time
that the exportable surplus of Thailand in 1952 would
amount to 1.6 million tons. However, the government
only allocated 800,000 tons of rice for export for the
first ten months, the rem ainder to be kept as a reserve
against possible local shortages and international disturbances. A small part of this reserved stock was
released for export by October 1952. The allocations
made in March were less than what had been wanted
by the governments of importing countries, and prices
were raised. For 35 per cent broken rice the ex-mill
price was raised by 7.4 per cent above that for 1951.
Prices for other grades were also adjusted. Export prices
of private rice rose even more than this.1
Other exports from Thailand show a declining
trend since the first half of 1951, partly on account of
the fall in the world price of the commodities concerned
and recently only because of the currency appreciation
which, at given world prices, reduces the baht proceeds
of T hailand’s exports (see table 4-4).
Both the quantum and value of exports from the
three states of Indochina decreased slightly during the
first two quarters of 1952, on account of the low level
of export of rubber and rice. The value of rubber
exports declined because of the decline in foreign demand
and prices, while rice exports dropped owing to export
restrictions.
It is reported that Viet-Nam and Cambodia expect
to export at least 500,000 tons of rice this year with
60 per cent from Cambodia and the rem ainder from
south Viet-Nam.
Whereas the centralized purchase of rice in Burma
and the penalty exchange rate for export rice in Thailand
have isolated— in the one case fully, in the other partly
1.
S h ip m e n ts o f rice fr o m T ha ila n d w ere c o m p a r a tiv e ly lo w d u rin g
F e b and Mar, th e n orm al peak s h ip m e n t period, o w in g m a in ly to
efforts o f m illers and m e r ch a n ts to hold rice a n d paddy fo r better
p r ic e s w h ich n o t only affected th e local rice su p p ly an d p r ic e s, bu t
also m ade it difficult fo r th e R ice B ureau to sec u r e e n o u g h rice
to m e e t fo r e ig n c o n tr a c t c o m m itm e n ts . A s a result, th e g o v e r n m e n t had to im p o se a n em b a r g o a g a in s t all p r iv a te rice e x p o r ts
e ffe c tiv e fr o m 25 F eb. A f t e r sev e n days, th e e m b a r g o w a s lifte d
an d on 12 A pr, th e G o v e r n m e n t a n n o u n c e d a n in d u c em en t m e a su r e
fo r s u p p ly in g rice to th e R ice B urea u by p e r m it t in g o n e to n o f
rice fo r p r iv a te e x p o r t fo r th e s u p p ly o f ev ery 4.5 to n s to th e R ice
B u reau . T h is m ea su re w orked o u t v e ry s a tis fa c t o r ily a n d w it h in
a s h o r t tim e b r o u g h t in m ore th a n 100,000 to n s o f rice t o th e
G o vernm ent.
— the internal price of rice from the export price, this
is not so in Indochina where the strong foreign dem and
has brought about ra p id increases in the intern al price
of rice. At the end of May, 1952, rice prices in Saigon
were reported to be 50 p er cent h igher th an a year
ago. As a counter-measure, both Viet-Nam and C am bodia imposed em bargoes on rice exports in late May,
but the export ban had little effect on prices.
Other countries
In Taiwan, China,2 rice counts less in total exports
than sugar. The considerable increase in total exports
for the first half year of 1952 was due to the (largely
seasonal) expansion in sugar exports. W hile sugar
exports will be m uch less, as usual, in the second half
of the year, rice exports will increase. The first crop
of rice was satisfactory, and exports will m ake m ore
headway with the harvest of the second crop.
In India, the total export earnings decreased further
in the first half of 1952 when they were about 11 per
cent lower than in the second half of 1951. The increase
in the quantity of exports could not offset the substantial
fall in export prices. But in com parison with the first
half of 1951 it was the fall in the quantum of exports
rather than in prices which accounts for the lower export
proceeds in the first six m onths of 1952.
The decrease in In d ia ’s export earnings du rin g the
first half of 1952 was concentrated in the second q uarter
and was due mainly to the decrease in exports of “ food,
drink and tobacco” and “ m anufactured articles.”
Among the form er, the decrease in tea exports was
striking. It was due partly to the fall in prices and
partly to the reduction in the quantity of export.
Jute m anufactures, the largest export item, accounted
in 1948 for m ore than one-third of In d ia ’s total value
of exports. Since October 1951 world dem and for
In d ia ’s jute m anufactures slackened. At the same time,
the high export duties raised selling prices abroad.
Substitutes were increasingly used in the U nited States
and exports of jute m anufactures from C ontinental
Europe competed strongly with In d ia ’s exports.
In order to enable the industry to im prove its
competitive position, the export duty on hessian was
reduced by 50 per cent in F e b ru a ry 1952. Foreign
demand did not recover, however, with the result that
stocks of jute m anufactures rem ained high and th at
prices continued to decline. As a consequence the jute
mills in India were forced to curtail production.
2.
N o n e w in f o r m a tio n on in t e r n a t io n a l tr a d e in th e m a in la n d o f
C h in a oth er th a n w h a t w a s g iv e n in t h e la s t S u r v e y is a v a ila b le -
35
In o r d e r to p ro m o te ex p o rts, th e q u o ta re stric tio n s
on e x p o rts to soft c u rre n c y c o u n trie s w ere re m o v e d at
th e e n d of Ju ly , a n d licences a re n ow issued freely.
In e a rly M ay, e x p o rt d u ties on ju te m a n u fa c tu re s w ere
a g a in re d u c e d , fo r h e ssia n b y a b o u t 73 p e r cen t.1 Since
th is d ra stic re d u c tio n of th e e x p o rt d uty , I n d ia n e x p o rte rs
h a v e been ab le to u n d e r b id co m p etito rs on the C o n tin e n t
o f E u ro p e .
I t seem s th a t th e w o rld slu m p in textile m a rk e ts
d id n o t affect I n d ia as m u c h as o th e r in d u stria liz e d
c o u n trie s. T h e v alue of e x p o rt of cotton y a rn a n d
m a n u fa c tu re s — a n o th e r la rg e item in I n d ia ’s ex p o rts—
m a in ta in e d its level d u r in g th e first h a lf of 1952, th ro u g h
a m o d e ra te in crease in th e q u a n tity of exports. Com-
p a re d w ith 1950 a n d e arly 1951 th e level of ex p o rts is
low, how ever. E x p o rts of cotton goods w ere d e liberately
re stric te d in 1951, w ith a view to m a in ta in in g dom estic
c o n su m p tio n . R ecently, as a resu lt of th e decline in
fo re ig n d e m a n d a n d th e im p ro v e m e n t in dom estic supply,
q u o ta s by d e stin a tio n s have been lifted fo r the tim e being.
R e stric tio n s on the ex p o rt of cotton piecegoods to
e n tre p o t p o rts have been rem oved. T h e com petitive
p o sitio n of the I n d ia n in d u s try in re la tio n to o th e r lead in g
e x p o rte rs is still relativ ely fav o u ra b le — th o u g h I n d ia ’s
p ric e a d v a n ta g e is now sm aller th a n in 1950— but
d e m a n d is still weak.
1.
F o r j u te h e s sia n , th e e x p o r t d u ty w a s reduced fr o m R s.750 to
R s.275 p e r to n , fo r j u te s a c k in g fr o m R s.8 50 t o R s.173.
C h a p ter 5
D IV E R G E N T
M OVEM ENTS
C H A N G E S IN L E V E L A N D C O M P O S IT IO N
O F IM P O R T S
IM P O R T S
m ents. T h e e x tra -o rd in a r y in c re a se in e x p o rts d u r in g
1950-51 h a d given rise to a n in c re a se of m o n e y incom e
in several ra w m a te ria l e x p o rtin g c o u n trie s, a n d this
h a d resulted in an e x p a n sio n of im p o rts. M o re v e r, the
in creased a v a ilability of fo re ig n e x c h a n g e h a d m a d e
possible the re la x a tio n of im p o rt controls. W ith the
a b a te m e n t of the boom , e x p o rts a n d m o n e y incom es fell
in m a n y c o u n trie s a n d im p o rt c o n tro ls w ere tig h te n e d
a gain. O verstocking of som e c o m m odities, especially
textiles, te n d e d to act as a n a d d itio n a l b ra k e on im p o r t
dem ands.
H ow ever, the actually re c o rd e d im p o rts
d u rin g the first h alf of 1952 reflect the d e m a n d fo r
them at the tim e w hen o rd e rs w ere p la c e d , a n d w hen
the fa cto rs m e n tio n ed abo ve h a d n o t y et fully m a d e
them selves felt. T h e difference in th e deg re e of the
previous incom e e x p ansion, in the tim in g of cha n g e s
in im p o rt a n d exc h a n g e co ntrols, a n d in in v e n to ry levels
largely explain the d iv e rg e n t m o v em en ts in im p o rts.
T he total im ports of 14 c o u n tries of the E C A FE
re g io n 1 d u rin g the first h alf of 1952 a m o u n te d to $4,750
m illio n ; this was slightly less th a n in the p re c e d in g h alf
year but still 9 p e r cent above the c o rre sp o n d in g p eriod
in 1951 a n d 89 per cent above the h alf ye a r period
prece d ing the K o re a n w ar. C o m p a re d with the second
half of 1951, the value of im p orts d ecreased in M alaya,
Indonesia, the Philipp in es and H o n g K ong, but increased
in all other countries. C o m p a re d w ith the first h alf of
1951, im p orts were lower in M alaya, H o n g K o n g a n d
Ja p a n (See T ab le 5 -1 ).
M any factors accounted for these d iv e rg e n t m ove1.
OF
N o t in c lu d in g B ritish B orn es, m a in la n d C hina, K orea a n d N e p a l for
w hich data are not available.
T A B L E 5-1
VALUE OF
IM P O R T S
(M onthly average)
M illion dollars
1 9 5 1
1950
1952
Jan-Jun
Jan-Jun
Jul-Dec
Jan-Jun
M a l a y a .............................................................................
In d o n e sia
....................................................................
P a k is ta n a
....................................................................
P h ilip p in e sb ....................................................................
C e y lo n
.............................................................................
60.9
24.5
22.7
31.2
19.8
135.6
44.0
41.9
34.5
27.0
123.3
90.3
47.2
45.5
27.6
110.8
Rice surplus countries
T h a ila n d c
....................................................................
B urm a
.............................................................................
In d o c h in a (C am b o d ia, Laos, Viet-Nam)
15.2
6.8
14.0
18.7
10.3
19.8
19.4
12.6
31.0
28.8
14.5
39.5
7.7
48.8
87.5
6.1
75.7
136.8
7.9
67.0
158.3
9.8
54.3
171.7
8 0 .8
41 9 . 9
1 7 5 .9
7 2 6 .3
164-8
794 .9
1 6 5 .5
7 9 1 .6
339.1
550.4
630.1
626.1
R aw material surplus countries
Other countries
C h in a (T aiw an)d ..........................................................
H ong Kong
....................................................................
In d ia
.............................................................................
Japan
.............................................................................
Total
......................................................................................
.................................................
Total, e x c lu d in g J a p a n
Sou rce:
U n ite d N a tio n s S ta tis tic a l Office.
a.
F o r 1950, e x c lu d in g overland tra de
b.
Im p o r ts valued f.o.b.
68.8
60.2
36.5
31.2
c.
S ou rce o f 1950 fig u re s: IM F ; 1951 a n d la te r fig u re s b a se d on
n a tio n a l tr a d e s ta tis tic s t a k in g in t o a c c o u n t th e e ffe c t o f m u ltip le
e x c h a n g e r ate s.
d.
E x c lu d in g M S A /E C A
(p r iv a t e a c c o u n t o n ly ) .
im p o r ts.
D a t a a r e fr o m
Bank
o f C h in a .
37
T A B L E 5-2
I N D I C E S a O F U N IT V A L U E , O F Q U A N T U M A N D O F T O T A L V A L U E O F IM P O R T S
( Jan-Jun 1950 = 100)
Unit v a lu e
M A LA YA
1951
Jan-Jun
Jul-Dec
1952 Jan-Jun
CEYLON
1951
Jan-Jun
Jul-Dec
1952 Jan-Jul
Jan-Jun
PHILIPPINES
1951 Jan-Jun
Jul-Dec
1952 Jan-Jun
..........................................................................................................
IND OCHINA
1951 Jan-Jun
Jul-Dec
1952 Jan-Jul
INDIAb
1951
1952
a.
Jan-Jun
Jul-Dec
Jan-Jun
I n d ic e s a r e based on v a lu e o f im p o rts in n a t io n a l c u r r e n c ie s .
A n o th e r fa c to r w hich is re le v a n t in this context is
the c o m m o d ity stru c tu re of im ports. In fo o d deficit
c o u n trie s, such as C eylon a n d In d ia , th e need fo r food
im p o rts is of p a r a m o u n t im p o rta n c e . A s the d e m a n d
fo r fo o d is g e n e ra lly inelastic, a larg e cha n g e in
disposable incom e m a y be a c co m p an ie d by a sm all
c h an g e in food im p o rts. F u rth e rm o re , a c ro p fa ilu re
w ith in the c o u n try will result in an in c re a se in food
im p o rts, a lth o u g h n a tio n a l incom e m a y fall. Im p o rts
of m a n u fa c tu re d c o n su m p tio n goods, w hich constitute a
su b sta n tia l p a r t of the to ta l im p o rts in m ost co u n trie s
of the re g io n , how ever, a re sensitive to ch a n g e s in
incom e a n d in v e n to rie s. Im p o rts of ra w m a te ria ls w hich
a re h ig h ly resp o n siv e to cha n g e s in in d u s tr ia l p ro d u c tio n
a n d in in v e n to ry a re im p o rta n t only in In d ia , J a p a n 1
a n d M alaya.
A m o n g the c o u n trie s w h ic h show ed la rg e r im ports,
the in c re a se w as m a in ly o n a c c o u n t of food im p o rts in
In d ia a n d Ceylon, a n d on a c c o u n t of m a n u fa c tu re d goods
in B u rm a a n d P a k is ta n . In T h a ila n d , the a p p re c ia tio n
of the b a h t on the fre e m a rk e t was p ro b a b ly the chief
fa c to r m a k in g fo r h ig h e r im p o rts, while in C hina
b.
Q u a n tu m
T otal v a lu e
145
141
131
155
144
140
223
202
182
114
133
139
122
106
117
137
139
159
121
137
125
89
105
92
108
142
115
107
117
125
179
142
222
282
124
125
130
122
139
153
150
171
200
O verlan d tr a d e excluded.
(T a iw a n ) a n d in the th re e states of In d o c h in a the
e x p a n sio n of m o n ey incom es m a y h av e been decisive.
In India the increase in im p o rts of “ food, d rin k
a n d to b a c c o ” (o f w hich food g ra in s occupied a large
s h a r e ) , w hich as c o m p a re d w ith 1951 accounted for
a b o u t 70 p e r cent of the to ta l value increase in im ports,
was the result of la rg e r volum e a n d h ig h e r prices. The
volum e a n d value of ra w m a te ria l im p o rts also increased
becau se of the e x p a n sio n in in d u stria l p ro d u c tio n . (See
T a b le 5 -3 ).
T h e value of im p o rts of m a n u fa c tu re d
co m m o d ities show ed v ery little cha n g e fro m the second
h a lf of 1951, b u t im p o rts of d u ra b le goods increased
at the expense of c o n su m e r’s goods. T h e increase in
the im p o rt of several ra w m a te ria ls a n d m a n u fa c tu re d
g oods was m a d e possible by the rela x a tio n in im p o rt
control. F o r exam ple, kerosene oil, petroleum , chem icals,
d ru g s a n d m edicines, electric m a c h in e ry , p rim e m overs
a n d fuel oil a re c o nsid e re d as essential items, a n d were
im p o rte d m o re freely when im p o rt restrictio n s h a d been
re la x e d to w a rd s the end of 1951 a n d in early 1952.
1.
J a p a n w ill be d e a lt w ith in c h a p ter 7.
38
T A B L E 5-3
IN D IA :
V A L U E O F IM P O R T S a
( M onthly average)
M illion rupees
1 9 5 1
1950
Jul-Dec
Jan-Jun
1952
Jul-Dec
Jan-Jun
G ro u p s
All c o m m o d i t i e s ....................................................................
Food, d rink a n d to b a c c o b .................................................
R a w m a te ria ls a n d s e m i - m a n u f a c t u r e s .....................
M a n u fa c tu re s
....................................................................
a.
450
93
145
210
O verland tra d e excluded.
599
139
190
267
b.
684
219
184
276
788
274
232
271
E x clu d e s v alu e o f c e r ta in c o n s ig n m e n t s o f fo o d g r a in s a n d s to r e s
im p o rted on g o v e r n m e n t a c c o u n t p e n d in g a d j u s t m e n ts .
T A B L E 5-4
I N D IA :
IN D IC E S O F U N IT V A L U E A N D O F Q U A N T U M O F IM P O R T S a
(Jan-Jun 1 9 5 0 = 1 0 0 )
1950
G ro u p s
Jul-Dec
Unit v a lu e
All c o m m o d i t i e s ....................................................................
Food, d rin k a n d t o b a c c o .................................................
R a w m a te ria ls a n d s e m i - m a n u f a c t u r e s .....................
....................................................................
M a n u fa c tu re s
Q u a n tu m
A ll c o m m o d i t i e s ....................................................................
F ood, d rin k a n d t o b a c c o .................................................
R a w m a te ria ls a n d s e m i - m a n u f a c t u r e s .....................
M a n u fa c tu re s
....................................................................
a.
103
102
105
105
111
146
92
117
1952
1 9 5 1
Jan-Jun
Jul-Dec
Jan-Jun
125
105
144
127
125
123
135
122
130
132
124
130
122
139
283
90
130
154
327
122
120
210
85
121
O verland trade excluded.
Ceylon is a n o th e r food deficit c o u n try .1 But unlike
In d ia , Ceylon h a s only lim ited m a n u fa c tu rin g facilities
a n d h a s to im p o rt a su b sta n tia l a m o u n t of m a n u fa c tu re d
goods fro m a b ro a d . D u rin g the first h alf of 1952, one
h alf of the increase in the total value of im p o rts was
accounted fo r by the increase in food item s whose
prices h a d risen substantially, while the o th e r half
consisted of m a n u fa c tu re d goods, p a rtic u la rly vehicles,
fo r w hich o rd e rs h a d generally been p laced in 1951 or
even earlier.
T he total value of im p o rts of Pakistan in c re a se d
d u rin g the first h a lf y ear. A m o n g the v a rio u s item s,
im p o rts of cotton textiles, m a c h in e ry a n d vehicles
increased substantially. T h e m a in fa c to rs m a k in g fo r
h ig h e r im p o rts w ere: (a ) the re su m p tio n of tra d e
re la tio n s w ith In d ia re su ltin g in a n o rm a l inflow of
co m m odities fro m th a t c o u n try , (b ) a lib e ra l im p o rt
licensing policy as effective 1 Ju ly , 1951, w h ic h helped
to tra n sla te in c re a se d in te rn a l incom es into a risin g
d e m a n d fo r im ports.
In Burma, the m o re liberal im p o rt policy was the
chief fa cto r in the expansion of im ports. T he rise in
the value of im p o rts d u rin g the first half of 1952, as
com p ared w ith 1951, w as due largely to the increase
in im p o rts b oth u n d e r open g en eral licence a n d u n d e r
special licences.
In Thailand, w here im p o rt c o n tro l is n o t extensive,
changes in im p o rts m a in ly reflect ch a n g e s in in te rn a tio n a l
prices, exc h a n g e ra te s a n d in n a tio n a l incom e. In
F e b ru a ry , the B ank of T h a ila n d lo w ered its selling ra te s
of p o u n d sterlin g to c o m m e rc ia l b a n k s fro m 51 to 4 5
bahts, w hich is e q u iv a le n t to a n a p p re c ia tio n of the
b a h t by 11.8 p e r cent. A s this ra te w as the p re d o m in a n t
ra te of exch a n g e fo r c o m m e rc ia l im p o rts, it h a d the
effect of stim u la tin g im p o rts b y m a k in g th e m c h e a p e r
1.
In 1938, food im p o rts accou n ted fo r a b o u t 40 per c e n t o f C eylon's
to ta l im p orts.
39
in te rm s o f local c u rre n c y . H ow ever, on 1 A pril, the
g o v e rn m e n t a n n o u n c e d th a t im p o r t duties be evaluated
on invoices in b a h t, b y th e use of free m a rk e t exchange
rates in stead of official rates. T h is cha n g e w hich
resulted in an in c rease in th e d u ty , m a d e im p o rte d goods
d e a re r a n d p a rtly offset the effect of th e c u rre n c y
a p p re c ia tio n on the free m a rk e t. D u rin g th e first half
of 1952, the d o lla r v alue of im p o rts in cre ased b y 48
p e r cent fro m the p re v io u s h a lf y e a r ; this increase
a d d e d fu rth e r to a lre a d y heavy stocks.1
T h e d o lla r value of im p o rts in In d o n e sia d u r in g the
first h a lf of 1952 fell b y a b o u t 26 p e r cent fro m the
pre v io u s h a lf year. Few er textiles a n d basic m etals
were im p o rte d p a rtly because of over-stocking.3 E x p e n d itu re on fo od im p o rts was m a in ta in e d , b u t as food
p rices ha v e risen, the volum e of food im p o rts m ust
have been reduced.
A m o n g the c o u n trie s w hich show ed a d ecrease both
in the volum e a n d value of im p o rts d u r in g the first half
of 1952, the d ecrease in ra w m a te ria l im p o rts was
im p o r ta n t in M alaya a n d th a t of co n su m p tio n goods
(chiefly m a n u f a c tu re d ) in the P h ilip p in e s a n d p ro b a b ly
also in In d o n e sia . T h e d ecrease in tr a d e in H o n g K o ng
was r e fe rre d to in th e p ro c e d in g c h ap ter.
T he value of im p o rts of capital goods into 12
c o u n trie s 4 of the re gion fro m the U nited States a n d
the U nited K in g d o m c o n tin u e d to increase d u rin g the
first h a lf of 1952. T h e u n it value of finished m a n u fa c tu re s e x p orted fro m the U nited States rose only
slightly d u r in g th e p e rio d , b u t the U.K. u n it value index
of e x po rts of m etals a n d e n g in e e rin g p ro d u c ts rose by
6 p e r cent fro m the second half of 1951 a n d was 26
p e r cent h ig h e r th a n b e fore the K o re a n war. A fter
c o rre c tin g fo r p ric e changes, im p o rts of capital goods
fro m the U n ite d States d u rin g the first half of 1952
increased by 3.5 p e r cent as c o m p a re d with the second
h alf of 1951, a n d w ere 17 p e r cent la rg e r th a n d u rin g
the h a lf y e a r p re c e d in g the K o re a n w ar. T his increase
p ro b a b ly reflects the o rd e rs p laced d u rin g the boom
p e rio d 1-1½ y ears ago. C ap ital goods im ports at
c o n sta n t p rices fro m the U n ite d K in g d o m , however, were
ju s t m a in ta in e d , b u t they w ere still a b o u t 8 p e r cent
h ig h e r th a n b e fo re the K o re a n w a r .5
P re lim in a ry
in fo rm a tio n show s th a t im p o rts of capital goods from
J a p a n d u r in g the first q u a rte r of 1952 decreased both
in value a n d volum e, a n d the abso lute am o u n t was very
sm all as c o m p a re d w ith those fro m the U nited States
a n d the U nited K in g d o m .
I n Malaya, w h ere S in g a p o re is not only an entrepot,
b u t also a pro c e ssin g ce n tre fo r ra w m a terials, the
re d u c tio n in the total value of im p o rts d u r in g the first
half of 1952 was largely d u e to the fall in b o th prices
a n d q u a n tity of ra w m a te ria ls in c lu d in g ru b b e r im p o rte d
for p ro c e ssin g a n d re-export.
In th e Philippines im p o rts declined chiefly as a
result of low er im p o rts of c o n su m p tio n goods. T he
decrease is only p a rtly a ttrib u ta b le to the re d u c tio n in
the fo re ig n exc h a n g e allo catio n fo r im p o rts of controlled
com m o d ities. T h e fa c t th a t th e re was also a re d u c tio n
in im p o rts of dec o n tro lled c o m m o d itie s a n d th a t im p o rts
of a n u m b e r of controlled articles were below the
p e rm itte d level in dicates th a t the d e m a n d fo r im p o rts
h a d d e c lin e d ; this is ex p lain ed by o versto ck in g an d,
p e rh a p s, by a decrease in d ispo sable incom e. F o r
exam ple, the re d u c tio n in im p o rts of d a ir y p ro d u c ts and
ca n n e d m e a t w hich w ere not u n d e r c o n tro l was clearly
du e to over-stocking. O n the oth e r h a n d , the value of
im p o rts of ra w m a te ria ls a n d c a p ita l g oods increased
because of h ig h re q u ire m e n ts of local industries.
IM P O R T S O F C A P IT A L GOODS
3.
In Indonesia, a lth o u g h th e v alue of im p o rts in term s
of local c u rre n c y increased, it d e creased in te rm s of
dollars, as th e re w as a cha n g e in the v a lu a tio n of tra d e .2
1.
2.
T h e m a r k e t in B a n g k o k is a t p r e s e n t r ep orted to be over-stock ed
in m a n y lin e s o f c o n su m e r good s, in c lu d in g p h a rm a ce u tica ls,
h a r d w a r e , te x tile s a n d b ic y c le s. D ea ler s in p h a r m a c e u tic a ls a re
e sp e c ia lly h ard h it, a n d w e r e a t o n e tim e r ep o rted to be c le a r in g
s to c k a t 10 p e r c e n t b elow c o st p r ic e . T h e s h o r ta g e o f liquid
f u n d s a lso fo r c ed m e r c h a n ts to sell a t v e r y low p r ic e s.
T h e p r e v io u s e ffe c tiv e
e x c h a n g e c er tific a te w a s
1952 a n d th e e x c h a n g e
c h a n g e d fr o m th e old
e x c h a n g e c e r tific a te ) to
a tw o -fo ld in c r e a se .
e x c h a n g e r a te in c lu d in g th e v alu e of
c o n sid ered as official r a te sin c e F e b r u a r y
r a te used fo r im p o r t v a lu a tio n w a s a lso
official r a te
(e x c lu d in g th e valu e o f
th e n e w official rate, th u s r e p r e s e n tin g
4.
5.
S ig n s o f c o n g e stio n o f im p o rted c o m m od ities, e sp ec ia lly te x tiles,
a t m a in d is tr ib u tio n c e n tr e s in J a v a a n d a t p o r ts w e re already
e v id e n t in la te 1950. D u r in g O cto ber 1951, p r ic e s o f te x tile s w ere
g e n e r a lly 30 to 40 p e r c e n t below th e y e a r ’s p ea k . D o m e stic te x tile
in d u s tr y w a s, th e r e fo r e , a d v e r se ly a ffec te d a n d a s s is ta n c e w a s
g iv e n b y th e g o v e r n m e n t th r o u g h p la c in g g o v e r n m e n t orders for
c iv ilia n an d m ilita r y r eq u ir e m e n ts. H o w e v e r , th r o u g h o u t th e first
h a lf o f 1952, little im p r o v e m e n t w a s sh o w n in th e m a r k e t for
im p o rted c o m m o d itie s. M a n y w h o le sa le a n d r e ta il lin e s c on tin u ed
t o m o v e s lu g g is h ly , a n d , in a n u m b e r o f c a ses, c h e a p e r te x tile s
w e re unloaded a t lo sse s r u n n in g a s h ig h as 40 p e r c e n t. H a r d w a r e,
p a p er , ir o n w a r e a n d C h in a w a r e w e re a lso d epressed, dealers com m on ly t a k in g 10 to 20 p e r c e n t lo sses. T h e “b e n t e n g ” g r o u p , or
In d o n e sia n n e w c o m e r m e r c h a n ts w ith s m a ll c a p ita l b u t r ec e iv in g
s p e c ia lly fa v o u ra b le t r e a tm e n t in im p o rts fr o m th e g o v e rn m e n t,
w e re v ir tu a lly b a n k r u p t, an d it w ould be difficult fo r m o st o f th em
t o s t a r t b u sin e s s a g a in b e c a u se o f th e d is s ip a tio n o f th e ir c a p ita l.
B e n te n g m e r c h a n ts h a n d lin g te x tile s suffered th e m ost, w hile
th o se h a n d lin g te c h n ic a l good s, such as b u ild in g m ater ia ls, w ere
b e st able to m a in ta in th e ir p o s itio n .
B u r m a , C eylon, H o n g K o n g , In d ia th e th re e s ta te s o f Indochin a,
In d o n e sia , M a lay a, P a k is t a n , th e P h ilip p in e s a n d T hailan d .
T h e in d e x o f u n it v a lu e o f e x p o r ts o f th e U n it e d K in g d o m for
1949, t a k in g J a n .— J u n . 1950 equal to 1, pu blished in th e E c o n o m ic
B u l le t in f o r A s i a a n d th e F a r E a s t, volu m e 2, N o . 2, p a g e 17,
T a b le 5, should read 1.29, in s te a d o f 0.97 an d th e to ta l valu e o f
d e v e lo p m e n t g o od s a t J a n .— J u n . 1950 p r ic e s, e x p o r te d fr o m th e
U n it e d K in g d o m to th e c o u n trie s in th e reg io n in th e sa m e table,
should read 100.6 in s te a d o f 129.8.
40
T A B L E 5-5
E X P O R T S O F S E L E C T E D G R O U P S O F D U R A B L E G O O D S BY T H E U N IT E D K IN G D O M ,
U N IT E D ST A T E S A N D J A P A N T O T W E L V E E C A F E C O U N T R IE S
(M o nthly average)
M illion dollars
1 9 5 0
Jan-Jun
From th e U nited K ingdom
M e tal a n d m a n u fa c tu re s
........................................
E lectrical g o o d s & a p p a r a t u s ...............................
M a c h in e ry & p a r ts t h e r e o f ........................................
V e h i c l e s .............................................................................
T otal
.............................................................................
Unit v a lu e in d ex of m e ta l m a n u fa c tu re s a
(Jan-Jun 1950 = 100)
........................................
T otal a t Jan-Jun 1950 p ric e s
...............................
From th e U nited S ta te sb
M e tal a n d m a n u fa c tu re s
........................................
E lectrical g o o d s & a p p a r a t u s ...............................
M a c h in e ry & p a r ts t h e r e o f ........................................
V e h i c l e s .............................................................................
T otal
.............................................................................
Unit v a lu e in d e x of e xports
(Jan-Jun 1950 = 100)
........................................
T otal a t Jan-Jun 1950 p ric e s
...............................
From J a p a n
M e ta l a n d m a n u f a c t u r e s ........................................
E lectrical g o o d s & a p p a r a t u s ..............................
M a c h in e ry & p a r ts t h e r e o f ........................................
Ve h ic le s .............................................................................
Total
.............................................................................
Unit v a lu e in d e x of ex p o rts
(Jan-Dec 1950 = 100) ........................................
Total a t Jan-D ec 1950 p ric e s
..............................
Sou rce:
a.
b.
195 1
Jul-Dec
6.7
3.5
13.9
9.2
33.4
10.7
33.5
100
33.4
32.8
7.1
3.4
12.2
102
4.6
1952
Jan-Jun
Jul-Dec
Jan-Jun
7.2
4.1
13.3
13.7
38.3
6.9
5.2
15.4
15.3
42.7
7.9
5.6
16.9
14.9
45.3
109
35.1
119
35.9
126
36.0
3.8
2.5
5.5
4.4
8.0
9.0
26.9
114
115
23.4
20.0
4.2
1.9
4.2
4.1
14.4
6.5
19.7
4.9
4.0
7.6
9.3
25.8
100
20.0
104
13.8
113
17.4
22.6
1.4
3.3
4.1
4.0
1.4
3.3
4.1
4.0
3.3
152
2.7
175
2.3
2.8
8.1
4.5
100
1.4
6.8
2 .0 c
161p
1.2
U .S . B ureau o f C ensu s, U .K . C ustom s a n d E x c is e an d J a p a n
E con om ic C ouncil B oard.
I n c lu d e s m e t a ls a n d e n g i n e e r i n g p r o d u c t s .
F o r th e U n it e d S ta te s u n it v a lu e in d e x o f e x p o r ts
m a n u fa c tu r e s is used.
o f fin ish ed
A m ong the v a rio u s g ro u p s of goods listed in table
5-5, im p o rts of vehicles fro m th e U n ite d States a n d
the U n ited K in g d o m w hich h a d increased co n sid erab ly
d u rin g 1951 declined in 1952, while im p o rts of m etal
a n d m etal m a n u fa c tu re s, electrical goods a n d a p p a ra tu s,
a n d m a c h in e ry a n d p a rts increased.
D u rin g the postw ar y e a rs B ritish ex p orts of c a p ital
goods to the region consisted largely of textile m a c h in e ry
chiefly fo r In d ia a n d P ak ista n , w hereas the U n ited States
supplied m ainly food p rocessin g m a c h in e ry to the
P h ilip pin es an d In d ia , co n stru ctio n m a c h in e ry to In d ia
a n d In d o n esia, a n d po w er g e n e ra tin g p la n t to In d ia ,
In d o n esia a n d the P h ilipp ines. J a p a n ex p o rted textile
m a c h in e ry to P a k ista n , in te rn a l c o m b u stio n e ngines to
In d ia , a n d ships to the P h ilip pin es. M a la y a a n d
Indonesia im p o rted m a in ly tra n sp o rt equipm ent, especial-
c.
p.
J a n . — M ar.
P r o v is io n a l.
ly com m e rc ia l vehicles. I n P a k is ta n , te x tile m a c h in e ry
w as th e le a d in g im p o rt item , reflecting th e d riv e to
b u ild up the textile in d u s try of th e c o u n try .1
S te rlin g a re a c o u n trie s of th e re g io n ha v e im p o rte d
ca p ital goods m a in ly fro m th e U n ite d K in g d o m , w hile
th e P h ilip p in e s a n d In d o n e sia have im p o rte d su ch goods
m a in ly fro m th e U n ite d States. T h a ila n d h a s been th e
only c o u n try in th e re g io n w h e re E u ro p e a n a n d A m e ric a n
e x p o rts could com pete fa irly freely. Its im p o rts of
c ap ital goods fro m th e U n ite d S tates w h ic h h a d been
negligible b efo re th e w a r in c re a se d c o n sid e ra b ly d u r in g
th e post-w ar y e a rs a n d exceeded b y f a r th o se fro m the
U n ited K in g d o m in th e first h a lf of 1952. D u r in g th is
p e rio d ex p o rts of c a p ita l goods fro m th e U n ite d K in g d o m
1.
E C A F E d o c u m en t on T rad e b e tw e e n
E u r o p e ( E / C N . 11/ T P / 8 ) , c h a p te r III.
th e
ECAFE
r e g io n
an d
41
a n d th e U n ite d States to m o st c o u n trie s of th e reg io n
sh o w ed a n in c re a se in volum e, b u t those to I n d ia a n d
H o n g K o n g a decrease.
J a p a n as a su p p lie r h a s so f a r sh a re d only very
little in th e in c re a se d d e m a n d of th e c o u n trie s of th e
re g io n fo r m a c h in e ry a n d e q u ip m e n t, a lth o u g h Ja p a n e se
p ro d u c tio n o f a m a jo r ity of e n g in e e rin g item s c o n sid e rab ly exceeded p re -w a r levels in 1951. D om estic needs
fo r r e h a b ilita tio n a n d m o d e rn iz a tion , so fa r, a b so rb e d
alm o st th e w hole of J a p a n ’s o u tp u t. T h e w eak c o m p etitiv e p o sitio n of Ja p a n e se p ro d u c ts on a c c o u n t of
h ig h costs h a s been a n o th e r r e ta r d in g factor. H ow ever,
so f a r as d e liv ery p e rio d s a re c o ncerned, J a p a n c o m p a re d
f a v o u ra b ly w ith th e U n ite d S tates a n d th e U n ited
K in g d o m .
E x p o rts of c a p ita l go o ds fro m G e rm a n y to the
E C A F E re g io n (e x c lu d in g C h in a a n d H o n g K o n g )
in c re a se d s h a rp ly a n d exceeded th e p re -w a r level, b u t
still la g g e d f a r b e h in d th e two m a jo r su p p ly in g c o u n trie s.1
T h e in crease in G e rm a n ex p o rts resu lted m a in ly fro m
the revival a n d ra p id p ro g re ss o f e n g in e e rin g p ro d u c tio n ,
fro m th e sh ift of o rd e rs fro m th e U n ite d K in g d o m to
G e rm a n y on a c c o u n t of th e m o re n o rm a l delivery p e rio d s
in th e la tte r c o u n try , a n d fro m G e rm a n y ’s im p ro v e d
access to m a rk e ts d u e to th e sp re a d in g n e tw o rk of tra d e
a g re e m e n ts a n d to g re a te r ste rlin g tra n s fe rab ility th ro u g h
th e E u ro p e a n P a y m e n ts U n io n .
T h e fu tu re d ev elo p m en t of im p o rts of c a p ita l goods
in to c o u n trie s of th e re g io n d e p e n d s on th e ra te at
w hich developm ent p la n s get u n d e r w ay, a n d th e extent
to w h ic h fo re ig n finance will be available. T h e re are
no signs th a t th e p re se n t fall in e x p o rt e a rn in g s a n d
in g o v e rn m e n t rev enues is re ta r d in g developm en t activ ities a n d th e new im p o rt re stric tio n s a re n o t so m u ch on
c a p ita l goods as on c o n su m p tio n goods.
T h e C olom bo P la n gives som e in d ic a tio n of the
p ro b a b le tr e n d of c a p ita l g oods im p o rts fo r a n im p o rta n t
p a r t of th e reg io n . T h e expected d ire c t in crease in
im p o rts of c a p ita l g oods re su ltin g fro m th e im p le m e n ta tio n of these p la n s w as estim ated, fo r th e fo u r C o m m o n w ealth co u n trie s, i.e. Ceylon, M ala y a , In d ia a n d P a k ista n ,
a t som e $200 m illio n an n u a lly . T h is figure m a y be
c o m p a re d w ith th e to ta l value ( a t c o n sta n t p ric e s) of
im p o rts of c a p ita l g oo d s in to these c o u n trie s fro m
E u ro p e , th e U n ite d States a n d J a p a n in 1950, w hich
a m o u n te d to $550 m illion. It w o u ld a p p e a r fro m th is
c o m p a riso n th a t the d e velopm ent envisaged in the
C olom bo P la n m e a n s a c o m p a ra tiv e ly la rg e a d d itio n to
the im p o rts of c a p ita l g oo d s fro m in d u s tria l c o u n trie s.2
1. Ibid.
2. Ibid.
IM P O R T P O L IC Y
W ith the collapse of th e co m m o d ity b o o m in early
1951, the b alance of p a y m e n ts p o sitio n of m a n y co u n tries
in the re g io n sta rte d to d e te rio ra te . As th e foreign
e x ch ang e reserves of th e c o u n trie s in the reg io n are
r a th e r sm all, a n d prospects fo r e x p o rt m a rk e ts still
u n c e rta in , m a n y g overnm ents have a d o p te d m e a su re s to
re stric t im p o rts, in o rd e r to m ake the best use of th e ir
lim ited fo re ig n e xchange resources. In the P h ilippines,
fo re ig n exc h a n g e allocations fo r im p o rts w ere reduced.
In the ste rlin g a re a c o u ntries, im p o rt re stric tio n s were
tig hten ed, especially in view of the d e te rio ra tio n in the
reserve p o sitio n of the sterling a re a as a whole. In
P a k ista n , re stric tio n of im p o rts by in creased im p o rt
duties w as a d o p te d in a d d itio n to d ire c t controls. In
In d o n e sia , b o th q u a n tita tiv e re stric tio n a n d restriction
th ro u g h
d evaluation-cum -m ultiple-exchange-rates were
c a rrie d out.
The tightening of quantitative im port restrictions
T h e d e te rio ra tio n in the reserve p o sitio n of the
ste rlin g a re a as a w hole in early 1952 h a d caused
co ncern to alm o st all co u n trie s in th e a re a . As m em bers
of th e ste rlin g a re a , Ceylon, In d ia , M a lay a a n d P ak ista n
tig h te n e d th e ir co n tro ls p a rtic u la rly over im ports from
the d o lla r a re a . Ceylon in late A u g u st rem oved 19
d o lla r item s fro m open g en eral licence, in clu d in g textiles,
ra d io s a n d wireless accessories, a n d re frig e ra to rs. F o u r
weeks later, Ceylon a n n o u n c e d fu rth e r im p o rt restrictions
fo r a v a rie ty of goods, m a in ly fro m the d o llar area and
the n o n -ste rlin g E P U co u ntries.
India a d o p te d stric te r im p o rt c o n tro l fo r th e second
h a lf of 1952, p a rtic u la rly w ith respect to goods from
the d o llar a re a . N e a rly 50 item s fro m the do lla r area
u n d e r o pen g e n e ra l licence h ave now been tra n sfe rre d
to th e soft c u rre n c y open g en eral licence. In O ctober
In d ia p u t a b a n on th e im p o rt of 61 item s includ ing
bicycles, ra z o r blades, ra d io sets, c h in a a n d porcelain.
In M a rc h 1952, th e g o v e rn m e n t of Pakistan
tig h ten ed im p o rt licensing fo r th e d o lla r area. Fifteen
c ateg o ries of co m m od ities th a t prev io u sly could be
im p o rte d fro m th e d o lla r a re a h ave been excluded from
th e new list of licensable im p o rts fro m th a t area. T here
w as a ten d e n c y to rem ove fro m such list, those items
th a t can be re a d ily o b ta in e d fro m soft c u rre n c y areas
o r fro m c o u n trie s w ith w hich P a k ista n has concluded
tra d e ag reem en ts. In A ug u st, im p o rt controls were
a g a in tig h ten ed , m a in ly fo r goods im p o rte d fro m n o n d o lla r a re a s ; a b o u t 4 0 item s w ere rem oved fro m the
open g e n e ra l licence list, in c lu d in g cotton y a rn an d
p iecegoods, ju te m a n u fa c tu re s, m atches, bicycles, p a p e r
42
a n d tim ber. Item s n o t on the open general licence list
were licensed w ithin the lim it of fo re ig n exchange
allocated a n d released by the governm ent. In N o vem ber
the G overnm ent went still f u rth e r by su sp e n d in g O.G.L.
No. 14 un d e r which item s such as m etals, m a c h in e ry ,
cem ent and chem icals could be im p o rte d freely. T he
G overnm ent have m ad e it clear how ever th a t this
m easure should n o t im p inge on “ essential” in d u stria l
requirements.
As a result of decisions reach ed at the C o m m o n wealth F inance M inisters’ C onference in L ondon,
additional restrictions have been applied since F e b ru a ry
to im ports into Malaya, in o rd e r to keep the 1952 im p o rts
to the level of 1951. All im ports from the U nited States,
C anada a n d A m erican-A ccount countries, a n d J a p a n
continue to be subject to special p e rm issio n on each and
every occasion and are to be review ed fro m tim e to
time. Im p o rts of some lu x u ry item s1 from J a p a n were
b a n n e d as J a p a n ’s sterling balances were too high.
Im ports from all non-sterling sources o th e r th a n “ n e ig h b o u rin g te rrito rie s” are now subject to in d iv id u a l licences
instead of being unlim ited u n d e r the O.G.L. In A ugust,
a few m o re item s of im p o rts fro m h a r d c u rre n c y sources
were practically pro h ib ited .
The com fortable balance of pay m ents position
enabled Burma to m a in ta in its liberal im p o rt licensing
policy, especially with respect to the n o n-dollar area.
Im p o rt control, however, still applies to item s co m peting
with local p ro d u c tio n , and it is also used fo r the p u rp o se
of assu rin g the B urm ese n a tio n a ls a fa ir sh are in the
im p o rt trad e. F u rth e rm o re , in view of the im plem entation of plans fo r capital developm ent, complete
d ism an tlin g of im p o rt controls is unlikely.
A m o n g the non-sterling a re a co u n trie s in the region,
the Philippin es a n d In d o n e sia also tightened th e ir
exchange and im p o rt controls. In the Philippines the
foreign exchange allocation fo r controlled im p o rts was
reduced. In antic ip a tio n of a decline in e x p o rt receipts,
the C entral Bank certification of foreign exch ange for
controlled im ports was low ered fro m $222 m illion fo r
the first som ester of 1951 to $190 m illion fo r the first
sem ester of 1952 a n d to $160 m illion fo r the second
sem ester. T he actual reduction in im p o rts of controlled
goods d u rin g the first half of 1952 accounted fo r m o re
than one half of the reduction in the total value of
im ports.
1.
I n c lu d in g cam eras, g r a m o p h o n e s, fo u n ta in -p e n s , a u to m a tic p e n cils,
c ig a r e t te lig h te r s a n d v a c u u m flasks.
In A ugust, in o rd e r to e n c o u ra g e local p ro d u c tio n
a n d conserve d o lla r exchange, th e g o v e rn m e n t of the
P h ilip p in e s placed com plete o r p a r tia l b a n on the
im p o rta tio n of 23 item s, largely lig h t m a n u fa c tu re d goods
(in c lu d in g c otton y a rn , zippers, plastic com bs, to o th brushes, e tc .). N o tw ith sta n d in g th e re d u c tio n of fo re ig n
e xchange allocation fo r im p o rts d u r in g the second half
of 1952, a n a d e q u a te flow of essential im p o rts is expected
d u rin g the rest of the y ear, as deco n tro lled goods will
con tin u e to be im p o rte d w ith o u t a n y exch a n g e lim ita tio n
a n d an in c re a sin g volum e of essential p ro d u c e r goods
is expected to a rriv e u n d e r the M u tu a l S e c u rity A gency
p ro g ra m m e .
In In d o n e sia , in e a rly Ju n e , the G o v e rn m e n t
a n n o u n c e d th a t fo re ig n exc h a n g e w ould no lo n g e r be
av ailable fo r 22 classes of lu x u ry goods (in c lu d in g
high-valued m otor-cars, w atches a n d fu rn itu re s ) even
at the in d u c e m e n t ra te (five tim es of the old official
ra te ) .2
The new m ultiple currency practice in Indonesia
T h e d e te rio ra tio n in the b a la n c e of p a y m e n ts a n d
the increase in the b u d g e t deficit have led the G o v e rn m ent of In d o n e sia to devalue the c u rre n c y fu r th e r a n d
to in tro d u c e a new set of m ultiple exch a n g e ra te s fo r
im p o rts in August. U n d e r these re g u la tio n s, im p o rts
are classified into fo u r categories a n d differen tial ra te s
of exchange were applied to th e m :
F o re ig n exchange
fo r im p o rts of essential g o o d s:; will b e g ra n te d
a t the basic ra te of 11.40 ru p ia h s to the dollar.
T o ob ta in exchange fo r im p o rta tio n of goods c o n sidered less essential, the im p o rte r m u st o b ta in a
100 p e r cent in d u c e m e n t certificate, w hich in effect
raises the ra te fo r these goods to 22.80 ru p ia h s to the
dollar. L u x u ry goods fo r w hich fo re ig n exc h a n g e will
still be m a d e availab le a re su b je c t to a 200 p e r cent
in d u cem en t certificate. T h e effective ra te of exchange
fo r item s on this list w ould th e re fo re be 34.20 ru p ia h s
to the dollar. T h e fo u rth c a te g o ry includes lu x u ry
goods fo r w hich no fo re ig n e x c h a n g e will be m a d e
available.
T his device is expected to re d u c e the d e m a n d fo r
im p o rts an d to b rin g in m o re revenue fro m the sale of
e xchange certificates.
2.
3.
S e e E c o n o m ic S u r v e y o f A s i a a n d th e F a r E a s t , 1951.
T h e y c o n s is t o f b a s ic a lly t h e old f r e e l is t m i n u s a n y it e m s w h ic h
h a v e b e e n p la c e d o n o t h e r lis ts b y t h e n e w r e g u l a ti o n .
43
T he increase o f tariff rates on textiles in Pakistan
C h an g es in ta riff ra te s w ere n o t p o p u la r in p o stw a r
ye a rs as a m e th o d of im p o rt re stric tio n , p ro b a b ly
b ecau se of th e lo n g legislative p ro c e d u re inv olved a n d
th e g o v e rn m e n ts’ c o m m itm e n t u n d e r th e G A T T . T h ey
have, how ev er, th e a d v a n ta g e o ver d ire c t im p o rt re stric tio n s th a t th e y ra ise re v e n u e unless th e y a re p ro h ib itiv e.
T h e re c e n t in c re ase o f im p o rt d u ties on textiles in
P a k is ta n is w o rth m e n tio n in g . In o r d e r to ba la n c e the
b u d g e t a n d p ro te c t the n a sc e n t cotton textile in d u stry ,
the G o v e rn m e n t of P a k is ta n in late J u n e 1952 ra ise d
th e im p o rt d u ty to 60 p e r cent on cotton piecegoods
fro m c o u n trie s o th er th a n th e U n ite d K in g d o m . T he
im p o rt d u ty on g rey textiles fro m the U n ite d K in g d o m
h as been raised fro m 36 to 54 p e r cent a n d th a t on
cloth of U n ited K in g d o m o rig in fro m 30 to 55 p e r cent.
T he 6 p e r cen t p re fe re n tia l tre a tm e n t is m a in ta in e d fo r
the U n ited K in g d o m im p o rts. T h e increase of im p o rt
duties on textiles h a s n o t yet resulted in a rise in prices,
as stocks a re still high.
Chapter 6
THE DETERIORATION IN TERMS OF TRADE AND BALANCE OF PAYMENTS
C H A N G E S IN T E R M S O F T R A D E
w orsened, chiefly as a resu lt of r isin g p rices of im p o rte d
foo d a n d of fallin g p rices of textile exports.
The price relationships p rev ailin g d u rin g the boom
of 1950-51 ch anged in the subsequent period.
The
sub stantial fall in raw m a te ria l prices re d u c e d th e ir
p u rch a sin g pow er over food a n d m a n u fa c tu re d goods
W ith in the g ro u p of m an u fa ctu res, the prices of textile
pro d u cts fell while those of en g in e erin g p ro d u c ts c o n tin u e d to rise. T h u s the raw m ateria l e x p o rtin g c o u n tries of the region suffered a su b sta n tia l d e te rio ra tio n
in th eir term s of trad e. D u rin g the first h a lf of 1952,
the term s of tra d e of the th ree raw m a te ria l e x p o rtin g
countries, nam ely Ceylon, P h ilip p in es a n d M alaya, were
about 25 to 4 0 p e r cent below the p eak levels they h a d
reached in the second half of 1950 or the first half
of 1951.
Ceylon, w ith its large food im ports, suffered m ost
a n d its term s of tra d e d e te rio ra te d fu rth e r in Ju ly and
August.
M a la y a ’s term s of tra d e losses cam e next
because S ingapore, as an entre p o t a n d p ro cessin g centre,
is a substan tial im p o rte r of raw m a te ria ls so t h a t it
regained on the im p o rt side at least a p a r t of the price
losses on exports. C on sid erin g only exp orts of dom estic
pro d u c e a n d im ports fo r dom estic use, the term s of
tra d e of M alaya m ay have d ete rio ra te d m ore.
A s a result of the increase in rice prices, the term s
of trad e of the rice ex p o rtin g cou ntries hav e im proved,
especially in B urm a w here the p ro p o rtio n of rice in the
total e x p o rt is the largest.
I n d i a ’s term s of tra d e
M oreover, as r u b b e r , tin, ju te a n d ju te m a n u factu res were largely ex p o rte d a t fallin g p ric es to the
d o lla r a re a , the “ te rm s of tr a d e w ith the d o lla r a r e a ”
of the c o u n trie s w hich e x p o rte d those c o m m o d itie s m u st
have d e te rio ra te d m o re th a n th e ir over-all te rm s of tra d e ,
thus c o n trib u tin g to the d e te rio ra tio n in th e ir bala n c e
of p a y m e n ts w ith the d o llar area. In th is re g a r d , the
sterlin g c o u n trie s in th e re g io n a n d , th e re fo re , the
sterlin g a re a as a w hole, w as p a r tic u la rly affected.
T he d e te rio ra tio n in the te rm s of tra d e h as been a
fa c to r m a k in g fo r a re d u c tio n in the re a l in com e of the
co u n trie s c o n c e rn e d ; this h a s been p a rtic u la rly im p o r ta n t in co u n trie s w here fo re ig n tra d e b e a rs a h ig h relation
to to ta l econom ic activity.
T H E E N L A R G E M E N T O F T R A D E D E F IC I T S
T H E R E G IO N A L T R A D E P A T T E R N
T h e balan ce of tra d e of alm ost all c o u n trie s of the
region d e te rio ra te d fu rth e r d u r in g th e first h a lf of 1952,
as a result of falling e x p o rts a n d in som e cases— h ig h e r
im po rts. T he only exceptions fro m the g e n e ra l tre n d
w ere Burma, China ( T a i w a n ) , w h ere the im p ro v e m e n t
w hich led to a sm all e x p o rt s u rp lu s 1 w as larg ely seasonal,
Hong K o n g a n d the Philippines.
In the re m a in in g
1.
T h e r e w a s a tr a d e deficit, h o w e v e r, if M S A im p o r ts w e r e in cluded.
T A B L E 6-1
IN D IC E S O F T E R M S O F T R A D E
(Jan-Jun 1 9 5 0 = 1 0 0 )
C e y lo n
1950
1951
1952
N o te :
a.
Jul-Dec
....................................................................
Jan-Jun
....................................................................
Jul-Dec
....................................................................
Jan-Jun
....................................................................
Jul
.............................................................................
A ug
.............................................................................
Sep
.............................................................................
117
125
93
77
65
68
76
U n it value in d ex o f e x p o r ts divided by th a t o f im p o rts an d
m u ltip lied by 100.
O verland tr a d e excluded.
AND
M a la y a
P h ilip p in e s
107
100
82
75
71
70
80
I n d ia a
98
107
128
102
135
159
126
123
86
1
1
0
90
85
45
TABLE 6-2
BALANCE OF TRADE
(M onthly averages)
M illion dollars
1952
1951
195 0
Jan-Jun
Jul-Dec
Jan-Jun
Jul-Dec
Jan-Jun
53.9
40.5
54.6
67.5
37.7
5.6
9.0
17.3
8.0
0.4
— 17.3
3.3
1.1
7.5
6.7
5.1
..............................................................................
6.0
17.2
6.0
— 7.5
2.7
Rice su rp lu s countries
T h a ila n d
.....................................................................
B u rm a
..............................................................................
In d o c h in a (C a m b o d ia , L aos, V iet-N am )
—
4.6
5.7
9.0
9.0
9.0
9.6
6.9
2.5
— 18.8
3.0
7.3
— 28.9
—
0.9
— 32.3
— 59.3
1.7
— 15.8
— 51.6
— 154.0
— 102.4
R a w m a te r ia l s u rp lu s c o u n trie s
M a l a y a ..............................................................................
In d o n e s ia
.....................................................................
P a k ista n
.....................................................................
C e y lo n
Other countries
In d ia
..............................................................................
...........................................................
C h in a (T aiw a n )
H o n g K ong
.....................................................................
Japan
..............................................................................
T otal
........................................................................................
T otal e x c lu d in g J a p a n
..................................................
Sources and n o tes:
11.2
8.5
2.0
14.0
3.6
— 1.2
— 6.5
— 27.0
— 8.1
18.9
2.0
—
5.2
1.3
115.4
116.7
11.6
3.5
6.9
— 65.6
139.2
204.8
— 2.0
— 19.6
— 49.3
— 100.9
— 51.6
—
—
— 2.2
—
S e e t a b l e s 4-1 a n d 5 -1 .
countries listed in table 6-2 trad e deficits increased
d uring the period, and surpluses dim inished or were
converted into deficits.
If one sums up the trade
balances of all the countries, the general deterioration
becomes evident by com parison with the preceding
periods.
Of the countries which had deficits, those of India
and the three States of Indochina were particularly
large.
In India both the fall in exports and the
increase in im ports were im portant factors contributing to the fu rth er decline in the balance of
trade since the second half of 1951.
In Indochina
higher im ports induced by inflation wert m ainly
responsible.
T hailand had a trade deficit for the
first tim e in the postw ar years; it was attributable
to the fall in receipts from exports of ru b ber and tin,
and to the appreciation of the currency. Indonesia was
the only country which inspite of a somewhat lower trade
balance retained a significant export surplus; the
depreciation of the rupiah export rate had helped to
m itigate the decline in the balance of trade. Of all the
countries Jap an showed the smallest negative movement
in its trad e balance d u rin g the period.1
1.
1.2
6.6
c f . C h a p t e r 7 in r e g a r d t o J a p a n .
As regards trade balances with various areas, the
region’s (12 countries excluding China (Taiwan) and
Jap a n ) deficit d urin g the first half of 1952 with the
m ajor p a rt of the dollar area— the United States and
C anada— was almost twice as large as in the second
half of 1951, chiefly because of the substantial increase
in im ports from N orth America. A very considerable
p a rt of this deficit was accounted for by In d ia’s import
surplus arising from large purchases of food and raw
cotton from the United States. In contrast to the trade
with N orth Am erica, the region’s exports to Japan
increased m ore than im ports and resulted in a smaller
trade deficit.
A large p art of the increase in the
region’s exports to Japan was attributed to the seasonally large exports of cotton from Pakistan. The region’s
trade balance with the U nited Kingdom changed from
a surplus to a deficit in the first half of 1952, chiefly
because of the substantial decrease in exports to the
U nited K ingdom from most countries of the region,
especially India, Indonesia and Malaya. Owing to a
larger decrease in exports than in imports, the region’s
trade surplus with other sterling area countries outside
the region was considerably reduced and its trade deficit
with W estern Continental Europe substantially enlarged.
46
TABLE 6-3
EXPORTS, IMPORTS AND BALANCE OF TR ADE OF TW ELVE ECAFE C O U NTRIES BY REGIONS
( M onthly averages)
M illion dollar
1952
1 9 5 1
1950
Jan-Jun
Jul-Dec
Jan-Jun
EXPORTS
106
55
32
71
17
110
454
147
94
50
120
40
179
726
104
101
53
100
19
142
578
111
69
36
76
30
126
501
U nited S ta te s a n d C a n a d a
........................................
U nited K i n g d o m ....................................................................
O th e r ste rlin g a r e a c o u n trie s o u tsid e th e re g io n
OEEC c o u n trie s of c o n tin e n ta l E u r o p e .....................
Japan
......................................................................................
ECAFE c o u n t r i e s ....................................................................
G ra n d t o t a l .............................................................................
69
59
31
52
21
100
386
87
75
55
81
42
154
543
126
87
40
112
50
154
626
151
91
33
100
58
122
615
BALANCE
U nited S ta te s a n d C a n a d a
........................................
U nited K i n g d o m ....................................................................
O th e r ste rlin g a r e a c o u n trie s o u tsid e th e re g io n
OEEC co u n tries of c o n tin e n ta l E u r o p e .....................
Jap an
.......................................................................................
ECAFE c o u n t r i e s ....................................................................
G ra n d t o t a l .............................................................................
37
4
1
19
— 4
10
68
60
19
— 6
39
— 1
25
183
— 21
14
13
— 12
— 31
— 12
— 48
— 40
— 22
2
— 24
— 28
4
— 114
U nited S ta te s a n d C a n a d a
........................................
U nited K i n g d o m ....................................................................
O th e r ste rlin g a r e a c o u n trie s o u tsid e th e re g io n
OEEC co u n tries of c o n tin e n ta l E u r o p e .....................
Japan
......................................................................................
ECAFE c o u n t r i e s ....................................................................
G ra n d t o t a l .............................................................................
IMPORTS
Source:
N o te :
U n ited
N a tio n s
S ta tis tic a l
—
O ffice.
C o u n t r i e s c o v e r e d a r e B u r m a , C e y lo n , H o n g K o n g , I n d i a , t h e
t h r e e s t a t e o f I n d o c h in a , I n d o n e s i a , M a l a y a , P a k i s t a n , t h e
P h i l i p p i n e s a n d T h a ila n d . F i g u r e s r e l a t i n g t o J a n - J u n 1952
p a r tia lly e stim a te d .
CHANGES IN BALANCE OF PAYMENTS AND
FOREIGN ASSETS
The balance of payments of several raw m aterial
exporting countries and of India deteriorated during
the first half of 1952, chiefly on account of the negative
trend in the balance of trade. Foreign asset holdings
also generally declined,1 and their purchasing power
over imports is now lower in some countries (India and
Ceylon) than at the end of 1949; India’s exchange
reserves are smaller even in current value, (cf. Table
6-4).
Prelim inary balance of payments statements are
available for only six countries, namely Ceylon, Pakistan,
the Philippines, Burma, Thailand and India; they will
be dealt with below first for the three raw m aterial
exporting countries, then for the two rice exporting
countries, and finally India.
T h e r e s e r v e p o s i t i o n o f t h e P h ilip p in e s a n d o f T h a ila n d r e m a i n e d
c o m p a r a t i v e l y s t a b l e , f o r r e a s o n s w h i c h w ill b e e x p l a i n e d b e lo w .
B u r m a is t h e o n ly c o u n t r y s h o w i n g a p e r s i s t e n t i n c r e a s e in f o r e i g n
assets.
( o f T a b l e 6 -4 )
Raw m aterial exporting countries
The sudden change from a large export surplus to
a large im port surplus in C eylon resulted in the first
half of 1952 in a considerable depletion of official and
banking institutions’ short-term foreign assets; this trend
continued in the th ird quarter. By the end of Septem ber
1952 the value of these assets was 24 per cent lower
than at mid-1951 and only as high as at the end of
1949.2 The reserves acquired d u rin g the boom period
were thus entirely lost, though present holdings are still
about double the “ reasonable” m inim um of Rs. 450
million.3 This rapid depletion of foreign assets caused
concern to the m onetary authorities, and exchange
restrictions were tightened again since September, w ithdraw ing all relaxations introduced a year ago. (see
Appendix table 6-1).
2.
C e n tr a l B a n k o f C e y lo n B u l le t in , S e p 1 9 5 2 .
3.
I n t e r n a t i o n a l B a n k M i s s i o n , T h e E c o n o m ic D e v e lo p m e n t o f C e y lo n .
P a r t I . p p . 5 7 -5 8 .
47
TABLE 6-4
GOLD AND FO R EIG N ASSETS OF SELECTED ECAFE C O U N TRIESa
M illion dollars
C e y lo n
1949
1950
1951
1952
D ec
Ju n
Dec
Jun
D ec
Jun
Jul
Aug
Sep
Oct
Source:
a.
..................................................
..................................................
..................................................
..................................................
..................................................
..................................................
..................................................
..................................................
..................................................
..................................................
203
185
240
266
262
223
217
213
203
203
I n d o n e s ia
P a k is ta n
P h ilip p in e s
512
471
507
605
639
620c
201
178b
356
451
511
492
471
427
395
383
283
280
359
396
318
323
317
303
308
B urm a
119
128
159
166
182
187
201
193
T h a ila n d
In d ia
218
253
288
327
358
354
346
352
354
358
1,982
1,985
2,000
2,048
1,888
1,682
1,661
1,674
1,696
1,703
IM F .
F o r B u r m a a n d C e y lo n , t o t a l g o ld a n d f o r e i g n a s s e t s p o s s e s s e d b y
m o n e ta r y a u th o r itie s , g o v e r n m e n t a n d o th e r b a n k s; fo r In d ia ,
P a k i s t a n a n d T h a i l a n d , C e n t r a l B a n k o n ly ; f o r t h e P h i l i p p i n e s ,
C e n t r a l B a n k a n d o t h e r b a n k s ; f o r I n d o n e s i a , B a n k o f J a v a o n ly .
Owing m ainly to the considerable reduction in the
trade surplus, the large surplus on cu rrent account of
the balance of paym ents of Pakistan in the first half
of 1951 had changed to a small deficit of Rs.75 million
in the second half of the year. This deficit increased to
Rs.389 m illion in the first half of 1952,1 owing to the
low level of exports and the continued expansion of
im ports. As a result, the foreign assets with the State
Bank of P akistan fell by Rs.467 million w ithin one
year.2 The low level of exports was due to the abatem ent of the com m odity boom and to the textile slump
which reduced considerably the dem and for and prices
of P ak istan’s m ajo r export commodities, ju te and cotton.
The continuous expansion of im ports was induced by
the previous rise in m oney incomes and the liberal
im port licensing policy. In addition, the price support
schemes have h ad a doubly unfavourable effect on the
balance of paym ents. W hile on the one hand “ the
prices offered internally were out of tune with international prices, exports were unduly restricted” ; on the
other hand, “ internal incomes have been sustained and
saved from a corresponding fall so th at the pressure on
imports has not been sufficiently eased.” 3 The price
support schemes, which retarded the process of ad ju stm ent of the balance of paym ents, were abolished in
August. They afford an example of how difficult it is
for an export economy to m aintain both a stable income
and an equilibrium in its balance of paym ents in the
face of a sudden and large change in world demand.
1.
T h e S t a t e B a n k o f P a k i s t a n , R e p o r t o f th e C e n t r a l B o a r d
D ir e c to r s f o r th e y e a r e n d e d 30 J u n e 1952. p . 17.
of
2.
Ib id .
3.
S p e e c h d e li v e r e d b y M r . Z a h id H u s a i n , G o v e r n o r , S t a t e B a n k o f
P a k is ta n o n 20 S e p te m b e r 1952 o n th e o cc a sio n o f F o u r th A n n u a l
G e n e ra l M e e tin g o f th e B a n k .
b.
G o ld o n ly ,
c.
February.
Statements of P akistan ’s balance of paym ents on
current account, classified by currency areas, are available for the two successive fiscal years, 1950/51, the
year of com m odity boom, and 1951/52, the year of
abatem ent for the boom. The statistics show that in this
period there was m ore than a threefold increase in the
deficit with the dollar area and an almost sixfold increase
in that with the sterling area, especially the United
Kingdom . The surplus with Continental W estern Europe
was reduced by one half, while that with Japan changed
to a large deficit. However, although Pakistan had a
deficit with the dollar area to the extent of Rs.259
million in 1951/52, this was largely offset by the surplus
with the Continental O.E.E.C. countries ( + Rs.220
m illion). W ithin the sterling area, the United Kingdom
in 1951/52 had to settle in gold a substantial p a rt of
its deficit with the European Paym ents’ Union.
P akistan’s surplus with the Continental O.E.E.C. countries, therefore, offset p a rt of its dollar deficit and so
eased the dollar d rain on the United Kingdom . (See
appendix table 6-2).
In the Philippines, the balance of paym ent position
im proved d u rin g the first half of 1952 and the downw ard m ovement in international reserves which started
in July 1951 appeared to have been tem porarily
checked. The im provem ent was a combined result of
several factors: (1) an increase in export earnings
because of an exceptionally large volume of sugar export,
(2) a decrease in im ports arising from lower demand
for im ports, and from smaller foreign exchange allocations for controlled im ports, (3) an increase in the
United States governm ent expenditures and (4) a
reduction in other invisible paym ents both because of
48
smaller dollar allocations for travel and of a decrease
in remittances on investments probably reflecting higher
re-investments in the domestic economy.
Of these
factors, the decrease in imports and the increase in the
United States government expenditures
(including
military expenditure and veterans’ adm inistrative p ay ments) were especially significant.
Notwithstanding the improvement, the balance of
payment during the first half of 1952 compared
unfavourably with the corresponding period in 1951
when there was a sizable surplus chiefly on account of
a large trade surplus. Looking forward to the second
half of 1952, the Central Bank of the Philippines
anticipates no substantial changes. A m ajor decline in
export receipts is expected, as sugar export will be
reduced on account of the term ination of the milling
season; a heavier export volume of abaca and coconut,
in view of prevailing low prices, cannot offset in value
the seasonal decline in sugar. The Central Bank has
therefore reduced the foreign exchange allocation for
imports, so that on balance the reserve position at the
end of 1952 may not show a significant change.
However, the foreign exchange assets with the Central
Bank and the commercial banks were reduced again
in the third quarter. (See appendix table 6-3).
Rice exporting countries
While several raw material exporting countries
experienced an unfavourable movement in their balance
of payments, Burma showed an improved position during
the first half of 1952, as reflected by the increase in
the country’s foreign exchange reserves. Both exports
and imports increased, with a positive balance somewhat reduced as compared with 1951. (cf. Appendix
table 6-4). The increase in the total value of exports
resulted chiefly from the higher prices obtained
for rice. The expansion in imports was attributable
more to the greater volume of im ports than to an
increase in the average prices of imports. The considerable increase in imports of producers’ goods and
technical services under the United States Technical
Cooperation Adm inistration (TCA, formerly ECA)
improved the country’s stock position and productive
capacity. In view of the sizable foreign exchange
(especially sterling) reserves and the favourable prospect
for the balance of payments, the government is intensifying its development effort. Burm a is now also
looking upon foreign enterprise in a more favourable
light than it did immediately after independence. The
Ministry of National P lanning has recently announced
that foreign investment in Burmese enterprises would not
be nationalized for a period of 25 years. This change
in policy will help to reduce the repatriation of foreign
capital or even to encourage its inflow.
The large surplus on the curren t account of the
balance of paym ents of T hailand d u rin g 1951 was
reduced to a little over one-tenth in the first half of
1952. The m ost im portant item responsible for the
change was the considerable reduction in the m erchandise
surplus, a result of (a) the declining earning power of
T hailand’s rubber, tin and other raw m aterial exports,
(b) the expansion of im ports consequent on the increase
of national income, and (c) the appreciation of the baht
which stimulated im ports but im peded exports. Other
international transactions of T hailand in the period
under review included large drawings on loans granted
by the International Bank, and sales of sterling by the
Bank of T hailand and the commercial banks. On the
other hand, Thailand added to its short-term dollar
assets, and there was also a net inflow of m onetary
gold (cf. Appendix table 6-5) . 1
India
India in the first half of 1952 h ad an external
deficit with respect to goods and services of Rs.902
million, about a hundred million less than in the previous
half year. The trade deficit was higher, but this was
m ore than offset by an increased surplus on services.
In com parison with the first half of 1951, however,
when India had a surplus of Rs.79 million with respect
to goods and services, the position has deteriorated,
due entirely to the increase in the deficit on m erchandise
account. Two thirds of the increase in the trade
deficit since the first half of 1951 are traceable to lower
exports, one th ird to higher imports.
A p a rt of the deficit with respect to goods and
services was covered in the first half of 1952 by
remittances from overseas Indians,2 and by the aid
provided by the governments of Australia, New Zealand
and Canada under the Colombo plan.3 A fter allowing
for these receipts and for capital movements, and
allowing also for errors and omissions, there still
rem ained a deficit of Rs.693 million which required
compensatory financing, as com pared with Rs.1,288
million for the previous half year. (See appendix table
6 -6 ) .
1.
S e e C h a p te r 4 o n " F u r th e r d ec lin e o f e x p o r t e a r n i n g s ."
2.
C f . A p p e n d i x t a b l e 6 -6 w h e r e t h e s e r e m i t t a n c e s a r e in c l u d e d u n d e r
“ p r i v a t e d o n a t i o n s ” . R e m i t t a n c e s f r o m o v e r s e a s I n d i a n s in C e y lo n
h a d i n c r e a s e d f o l l o w i n g t h e r e l a x a t i o n o f e x c h a n g e c o n t r o l in
C e y lo n .
3.
I n c lu d e d i n A p p e n d i x t a b l e 6-6 u n d e r “ S p e c i a l o ffic ia l f i n a n c i n g " ;
f o r a n e x p l a n a t i o n o f t h e t e r m s e e N o t e s t o t h e t a b le .
49
The U nited States Food Loan of Rs.320 million
financed almost one half of this deficit. D rawings on
foreign exchange assets were of the same order as for
the previous half year, and the foreign exchange reserves
with the Reserve Bank of India showed a decrease. In
short, b a rrin g unknown factors under errors and
omissions, In d ia ’s large trad e deficit du ring the first
half of 1952 was financed by the United States Food
Loan, by the aid received under the Colombo plan and
by drafts on sterling balances. This was necessary in
view of the food shortage and the requirem ents for
development.
As regards balances with various currency areas,
there was d u rin g the first half of 1952 a considerable
reduction in the surplus on current account with the
Sterling area other than Pakistan, chiefly because of the
fall, partly seasonal, in exports of cotton textiles, tea
and other commodities. As to the balance on current
account with Pakistan, the previous deficit turn ed into
a sizable surplus, on account of a reduction in imports
of raw ju te and an increase in exports of cotton textiles
and other m anufactured goods. In relation to Pakistan,
In d ia’s term s of trade im proved substantially. The
favourable shift in the current account with Pakistan
offset the unfavourable shift in transactions with the
rest of the sterling area, and resulted in an improvement
of In d ia ’s balance on current account with the sterling
area as a whole. W ith the dollar area there was a
further deterioration in the current account, arising
m ainly from large im ports of food and raw cotton.
In d ia’s deficit with continental OEEC countries was
reduced due chiefly to the effects of stricter im port
control. (See appendix table 6-7).
Chapter 7
INTERNATIONAL TRADE AND PAYMENTS OF JAPAN
The monthly deficit in Jap a n ’s visible trade was
on the average lower in the first half of 1952 than in
1951. In 1951 Jap a n ’s trade deficit had grown. The
quantum of exports was the same a s in 1950 if one
takes the year as a whole, though there were sharp
upward and downward movements from quarter to
quarter. As the term s of trade had im proved relatively
to 1950, these exports had an increased purchasing power
over imports to the extent of 12 per cent. The actual
quantum of imports, however, had expanded by more
than was gained by the better terms of trade, and this
in conjunction with the rise in the general level of
international prices explains the increase in the trade
deficit in 1951.1
1.
I f t h e r e is t r a d e d e f ic it t o b e g i n w i t h , a n e q u i - p r o p o r t i o n a t e r i s e
( f a l l ) in e x p o r t a n d im p o r t p r i c e s w i l l i n c r e a s e ( r e d u c e ) t h e t r a d e
d e f ic it.
By mid-1952 the quantum of im ports had risen still
further while the quantum of exports had not shown
much change since 1951. The adverse effect on the
balance of trade of this relative increase in the volume
of im ports from Jan u a ry to June 1952 was m ore than
offset, however, by price effects: nam ely by the sharp
fall in the general level of international prices and by
some further im provem ent in the term s of trad e (as
against the average of 1951).
However, on closer inspection it appears th at the
better showing of the trade balance during the first half
of 1952 was entirely due to favourable changes durin g
the first quarter. Since then the tendency has been
distinctly downward. At the end of 1951 the term s of
trade, which at that time stood above the average for
the year, began to tu rn against Jap a n ; since then they
have gradually worsened. M oreover the quantum of
TABLE 7-1
JAPAN:
MERCHANDISE TRADEa
( M onthly averages)
M illion dollars
TOTAL VALUE
19 5 2
19 5 1
1950
E x p o r t s ..........................................................
I m p o r t s ..........................................................
B a l a n c e ..........................................................
68.3
81.2
— 12.9
1951b
112.9
170.4
— 57.5
Jan-Jun
Jul-Dec
Jan-M ar
Apr-Jun
Jul-Sep
110.3
175.9
— 65.6
115.5
164.8
— 49.3
118.8
156.1
— 37.3
108.9
174.8
— 65.9
95.8
166.2
— 70.4
175.3
147.7
118.7
158.7
135.7
116.9
153.3
133.9
114.5
65.9
74.8
115.0
— 40.2
71.0
130.5
— 59.5
UNIT VALUE INDEX
E x p o r t s ..........................................................
I m p o r t s ..........................................................
Term s of t r a d e
........................................
100.0
100.0
100.0
163.6
146.0
152.0
144.4
105.3
112.1
QUANTUM (V alue a t 1950 unit v a lu e s )
E x p o r t s ..........................................................
I m p o r t s ..........................................................
B a l a n c e ..........................................................
Source:
a.
Japan
E c o n o m ic
C ounsel
68.3
81.2
— 12.9
69.0
116.7
— 47.7
B oard.
E x p o r t s e x c lu d e p r o c u r e m e n t f o r U n i t e d N a t i o n s a n d U n i t e d S t a t e s
F orces.
show n.
72.6
121.8
111.6
— 49.2
— 45.7
b.
F o r 1950, th e im p o r t fig u r e s r e la te t o g o o d s a r r iv in g a t t h e p o r t
o f e n tr y d u r in g 1950. B e g in n in g 1951, th e im p o r t fig u r e s r e p r e s e n t
g o o d s c le a r e d f o r e n t r y b y t h e C u s t o m s B u r e a u d u r i n g t h e p e r i o d s
G oods a r r iv in g in 1950 b u t cle a r e d f o r e n t r y in 1951 a r e
t h u s d o u b le - c o u n t e d .
51
exports after its initial rise at the beginning of the year
fell off later on. In the second quarter, these two
factors, in conjunction with the further expansion of
imports, gained the upper hand. The consequent decline
in the trade balance continued in the third quarter,
although im ports were lower.
It is obvious from this brief sum m ary that the fall
in the foreign dem and for Japanese goods has now
become an im portant influence. Insofar as this shows
in the quantum of exports, some fall had occurred
already in the early sum m er and autum n of 1951; had
it not been for the Anglo-Japanese agreement which
gave a tem porary stimulus to trade, it is probable that
mid-1951 would have m arked the turning point. In the
meantime, the secondary effects of the recession in world
m arkets— i.e. the effects of im port restrictions— have
come into play, and are contributing a good deal to the
shrinkage of exports. The fact that the sharp decline
in exports since A pril 1952 is entirely accounted for
by falling sales in sterling countries and in the open
account area, whereas dollar exports have kept up, is
probably an indication of the growing im portance of
im port restrictions.1 M ore recently exports to the open
account area have become steadier, possibly in response
to successive trade agreements with Brazil, Indonesia and
Thailand (See A ppendix table 7-1).
W hat is most striking however is the terms of trade
effect of the decline in the dem and for Japanese exports.2
That the term s of trade of a country exporting mainly
industrial goods should deteriorate in a period of falling
prices of prim ary products is rather exceptional. In the
case of Japan this peculiar phenom enon is traceable to
a num ber of circum stances which between them make
up the essential features of Ja p a n ’s post-war trade.
The first is the heavy dependence on dollar com modities the prices of which have fallen much less on
the average than the prices of p rim ary products supplied
by other countries. The dependence on the dollar area,
which also explains Ja p a n ’s latent dollar shortage, has
been lessened somewhat in recent months when purchases
were switched to sterling countries. But it is still a
factor that counts heavily, particularly in com bination
with a second factor, viz. the high relative im portance
of textiles in J a p a n ’s export trade. In spite of a definite
shift towards producer goods, textile exports (including
silk, rayon, staple fibres, woollens, etc.) still accounted
in 1950 for almost half the total exports. Since in the
1.
J a p a n i t s e l f in F e b 1 9 5 2 h a d im p o s e d r e s t r i c t i o n s o n s t e r l i n g
e x p o r ts in v ie w o f th e h e a v y a c c u m u la tio n o f s te r lin g b a la n c e s .
B u t t h e s e r e s t r i c t i o n s w e r e r e l a x e d a l r e a d y in M a r c h a n d s t i l l
f u r t h e r in M a y , a n d h a v e n o w b e e n c o m p l e t e l y a b o lis h e d ( O c t o b e r ) . I n t h e m e a n t i m e t h e b a l a n c e o f J a p a n ’s s t e r l i n g t r a d e h a s
d e c l in e d a n d b e c o m e n e g a t i v e ( s e e A p p e n d i x t a b l e 7 - 1 ) .
2.
T h e t e r m s o f t r a d e i n d e x , w h i c h is u s e d in t a b l e 7 -1 , s t o o d a t 121
in t h e f o u r t h q u a r t e r o f 1951 b u t h a d f a l l e n t o 112 b y J u n e 1 9 5 2 .
course of the recent recession— which to no small extent
was a textile recession— the prices of textiles fell sharply,
not only in terms of other m anufactures but also in
terms of wheat and even cotton, the terms of trade of
Japan were bound to deteriorate.3 In the preceding
period— that is, during the Korean war boom— Japan
had raised export prices of textile products sharply, both
absolutely and relatively to the cost of materials, whereas
the quantum of Japanese textile exports had shown only
a small expansion com pared to that of other m ajor
suppliers, particularly India and the United States.
When the boom collapsed in 1951, the price reaction
was strong; the quantum of Japanese textile exports,
after an initial drop in mid-1951, subsequently recovered
and reached peak levels for most items at the end of
the year or early in 1952 when the decline was resumed.
By the autum n of 1952 (August) exports of cotton piece
goods had fallen by 44 per cent from their average
level in 1950 and 1951, and the ratio of exports to
output had declined from about one half in 1950 to
roughly one th ird .4
Next to textiles, metal and metal products are
im portant items on Ja p a n ’s export list. If machinery
is added, the combined share of this group in total
exports was about 28 per cent in 1950, as against 15
per cent before the war. In the period up to 1950/51,
Japan was successful in finding larger markets for these
products. A good deal of this success, however, was
based on ability to supply at short notice, and not on
cost advantages, and was therefore rather precarious.
In the case of machinery, the quotations for Japanese
plant, electrical equipment, trucks, rolling stock, and
ships (but not textile m achines) “ stood hopelessly higher
than those of the competitors.” 5 Already in 1951 these
equipm ent exports lost ground; they had not been very
large in any case. The situation was similar with regard
to the quantitatively more im portant group of metals
and metal goods, which includes iron and steel. The
cost of steelmaking in Japan is high, partly because of
the use of obsolete equipment, particularly in the rolling
mills, and partly because of the extraordinarily high
price of pig iron. Steel prices in Japan are therefore
substantially above the level in Western industrial
countries (See appendix table 7-2). In spite of this
handicap Japan exported increasing quantities of steel
during the period of the Korean war boom when there
3.
4.
B y A p r 1952 e x p o r t p r i c e s o f J a p a n e s e t e x t i l e s h a d f a l l e n f r o m
t h e i r p e a k l e v e l b y 78 p e r c e n t , w h e r e a s p r i c e s o f im p o r t e d fo o d s t u f f s a n d t e x t i l e m a t e r i a l s h a d o n l y f a l l e n b y 3 p e r c e n t a n d 38
p e r c e n t r e sp e c tiv ely .
I t is w o r t h n o t h i n g t h a t t o t a l p r o d u c t i o n o f t e x t i l e s h a s b e e n
r i s i n g c o n t i n u a l l y in J a p a n a n d in A u g 1 952 w a s h i g h e r t h a n a t
a n y t i m e s i n c e t h e w a r ( t h o u g h t h i s is n o t t r u e f o r c o t t o n g o o d s ) .
H o m e s a l e s h a v e s h o w n a s u b s t a n t i a l e x p a n s i o n d u r i n g t h e fir s t
h a lf o f 1952. c f. c h a p te r 8 “ P r ic e m o v e m e n ts a n d p o lic y ” .
5.
c f . F o r e i g n T r a d e o f J a p a n , 1952 , M i n i s t r y o f I n t e r n a t i o n a l T r a d e
a n d I n d u s t r y , p . 101.
52
were few alternative sources of supply; these exports
fetched prices that were usually well above the domestic
level (though not necessarily above international prices).
Non-ferrous metal products made in Japan found markets
during that period although they were even more expensive relatively to prevailing international prices.1 All
this changed, when towards the end of 1951 and during
1952 supply conditions in Western countries eased and
markets became more competitive. Since then, Japanese
producers have been forced to make very heavy price
concessions. In the case of steel most Japanese export
quotations— in contrast to American and European— are
now well below domestic prices, so much so that, a few
years after the abolition of price control, the question
of subsidizing steel and steel products has become an
im portant controversial issue.2 No doubt, these price
concessions have helped to prevent a more serious fall
in the foreign demand for Japanese products. The
cost to the economy as a whole shows in the deterioration
of the terms of trade to which the fall in the purchasing
power over imports of Japanese metal and metal goods
has contributed.3
Looking back, the setback which Jap a n ’s export
earnings suffered on account of these developments has
been mild when compared with the losses of the raw
m aterial producing countries of the area. Moreover,
since the share of exports in total output is much lower
in Japan than in those other countries, Jap a n ’s losses
due to the foreign trade recession so far were of smaller
relative importance. But this is not to imply that the
fall in export earnings if it continues, will not have
significant effects on the economy. Up to now, the
1.
c f . ib id , p . 21.
2.
c f . O r i e n ta l E c o n o m is t, N o v
3.
B y A p r i l 1952 t h e e x p o r t p r i c e s o f J a p a n e s e m e t a l a n d m e t a l g o o d s
h a d f a l l e n f r o m t h e i r p e a k le v e l b y 24 p e r c e n t , w h e r e a s t h e f a l l
i n a v e r a g e i m p o r t p r i c e s w a s o n ly 15 p e r c e n t . S e e a l s o T a b l e 5 -5 .
1952.
recession in exports did not im pair the liquidity position
of Japan. In fact, the foreign currency holdings of the
Central Bank continued to increase until the sum m er
of 1952 when they were higher than at any time before.
External reserves accum ulated in spite of the deficits in
m erchandise trade and in private invisible transactions.
Extra dollar income from m ilitary sources (including
special procurem ents and expenses of United States
forces) covered these deficits and left som ething over
for strengthening the reserves.4 A slight reduction in
external assets for the first time occured in the third
quarter of 1952; the m ain reduction was in sterling
assets while dollar reserves kept on rising. (See table
7-2).
Looking ahead the trading outlook is very uncertain.
The consumer goods exports of Japan are increasingly
exposed to im port restrictions, the full effects of which
have yet to show. The tentative estimates of the
Economic Council Board, which anticipate a paym ent
deficit for the fiscal year April 1952— M arch 1953
already allow by implication for a decline in exports
in the second half of the year as com pared with the
first half (see Appendix table 7 -3 ).5 T aking a longer
view, due weight must also be given to the underlying
precariousness of Ja p a n ’s international economic position. M ilitary procurem ents which are paid for in
dollars can hardly be regarded as a perm anent or as
a steady source of income. They veil, and tem porarily
help to bridge, the overall deficit in current commercial
transactions as well as the latent deficit in the dollar
accounts. As this extra income is tapering off, its
4.
I n a d d i t i o n t h e r e w a s s u b s t a n t i a l U n i t e d S t a t e s a i d u p t o m id - 1 9 5 1 .
5.
O ne s tr ik in g
c h a n g e in t h e
ste r lin g a rea.
is e x p e c t e d t o
f e a t u r e o f t h e s e e s t i m a t e s is t h e e x p e c t e d l a r g e
b a l a n c e o f J a p a n ’s e c o n o m i c t r a n s a c t i o n s w i t h t h e
T h i s b a l a n c e , w h i c h w a s s t r o n g l y p o s i t i v e in 1951,
s h o w a d e f ic it i n 1952 ( f i s c a l y e a r s ) .
TABLE 7-2
JAPAN:
TREND OF FOREIGN CURRENCY HOLDINGS
M illion dollars
1950
Total h o ld in g s
........................................
..........................................................
D ollar
P o u n d sterling
........................................
O p e n a c c o u n t c redit b a la n c e
Source:
N o te :
Bank
F ig u res
of Japan.
re la te to en d
Dec
M ar
Jun
Dec
M ar
556
462
54
40
489
401
43
45
482
322
913
583
211
119
1,059
643
279
137
122
38
a.
of
m on th s.
1 9 5 2
1951
D o lla r fo r J u n e a n d S ep
c h a n g e b a n k s a s fo llo w s:
Jun
Sep
1,163
673a
355
135
1,130
723a
280
127
1952 in c lu d e s h o ld in g s o f f o r e i g n e x J u n — $ 2 ,1 4 1 ,0 0 0 , S e p — $ 2 1 ,3 7 9 ,0 0 0 .
53
and Africa, seems to hold out better prospects.1
However, as a supplier of these countries Jap an is at
present handicapped by two m ain circumstances. In
competition for these markets, Japan m ay have a cost
advantage in m any light industries over the m ore highly
industrialized countries. But in respect of just these
goods, Japan is meeting increasing competition from
indigenous production which is usually protected. With
the products of the heavier industries and particularly
with capital goods, it is the other way round. They
should offer m ore opportunities in under-developed
countries whose dem and for capital goods far exceeds
local production. Yet in the m ajority of the industries
concerned— though certainly not in every one of them—
Japan cannot at present compete in price with Western
coun tries;2 as pointed out before, Japanese costs of
production are too high. Nevertheless, to prom ote these
J a p a n ’s m ain problem therefore is to find m arkets
exports, as well as exports of the m ore complex durable
for m any m ore exports under difficult and highly
consum er goods, is Ja p a n ’s m ain task. To bring its
competitive conditions. The advanced industrial counsolution nearer presupposes the further development of
tries are not likely to offer additional outlets on which
the Japanese economy itself and a substantial improveJapan could rely. A lthough exports to these countries,
m ent in production techniques.
particularly to the United States, are quite considerable,
they consist very largely of m arginal items which are
1.
P r o x im ity , w h ic h c a n b e a fa c t o r o f so m e im p o r ta n c e in d eternot essential to the economy of the receiving countries.
m i n i n g t r a d e , m a y p o i n t p a r t i c u l a r l y t o t r a d e w i t h m a in la n d
C h in a . A t p r e se n t, h o w e v er, th is tra d e h a s dropped to a m ere
They are sensitive to small changes in prices and incomes,
t r i c k l e . J a p a n e s e e x p o r t s t o m a i n l a n d C h i n a h a v e f a ll e n f r o m
Y .2 ,1 0 0 m i l l i o n in 195 1 t o Y .1 5 0 m il lio n i n t h e f ir s t h a l f o f 1952,
and can easily be dispensed with by the receiving
w h i l e i m p o r t s f r o m m a i n l a n d C h i n a h a v e f a l l e n f r o m Y .8 ,4 4 0
m
i l l i o n t o Y .4 2 0 m i l l i o n ( i n r o u n d f i g u r e s ) .
countries. On the whole, trade with the under-developed
2.
F o r J a p a n e s e e x p o r t s o f c a p i t a l g o o d s t o t h e E C A F E r e g io n s e e
countries of Asia and the Middle East, Latin America
c h a p t e r 5, t a b l e 5 -5 .
replacement will dem and an increase in commercial
exports, both visible and invisible. M oreover, the
curren t level of im port is still very low by pre-war
standards: it is only about half of what it was before
the w ar while industrial production has since increased
by 40 per cent. Admittedly, a p a rt of this fall in the
ratio of im ports to total production must be regarded as
perm anent, namely insofar as it reflects a change in the
industrial structure. V arious heavy and chemical in dustries, which depend less on im ports than other
industries, have grown in im portance, and there has
also been a substitution of domestic raw materials, such
as tim ber and scrap iron, fo r supplies from abroad.
Yet there can be little doubt th at an increase in the
national consum ption level which is still m aterially lower
than before the w ar is conditional upon m ore imports.