Evening star., 1949-12-18

titude which the producers assume
which they and their governments
quota restrictions and other con-
trols as coffee. In country like
Guatemala the government itself
is one of the principal producers.
Before the war German nationals
owned some of the largest flncas.
or plantations. Practically all OF
these were confiscated or other
wise acquired by the government
during the conflict.
Naturally the sudden rise IN
price has brought new wealth to
many of the producers. The
Latins themselves, in answer to
all the criticism and commotion
over the coffee situation here.
point to the fact that throughout
the depression and the war they
received low and sometimes ruin
Gus prices for their product. In
the '30s they got less than 10 cents
a pound. Therefore, they feel
that present prices, five times
higher than those of the '30s, are
poetic, as well as economic justice.
But mere high prices are not
the only serious aspects OF the
situation insofar as the United
States is concerned. Normally, a
large portion of the crops In the
various countries is contracted for
sale to purchasers in this coun-
try before it Is gathered. and at
prices agreed upon or prevailing
at the time the contracts are
made. The vastness of the en-
terprise and the necessity for dis
tributors to be able to supply their
markets steadily and without in
terruption compels them to keep
large quantities on hand or IN
prospect.
May Repudiate Contracts
In the present circumstances.
the growers in several OF the
countries have contracts to deliver
coffee at prices much lower than
those prevailing at the moment.
and they are very unhappy about
| it. There are wild rumors that
some of them may abrogate their
contracts. unless North American
buyers agree to pay higher prices.
| Any such action would have its
nerils To the countries themselves,
as we'll as to the United States.
Any refusal to comply with con-
tracts, no matter what the cir
cumstances. would bring about q
loss of faith in the Southern pro-
ducers and governments. and re-
taliation of one kind or another
upon the part of importers. In
self lf-defense, they would naturally
begin to look for other sources in
the future. This would create
competition for the Latin Amer
leans.
AS q matter of fact, present
high prices are bound to stimu-
late production elsewhere. Bra
zilians have already been deeply
concerned about the possibility OF
greater production of coffee in
Africa and the East Indies. There
has been considerable talk in Brit
Iish circles of going into coffee
production on large scale in
Africa. Cheap African labor.
along with many other factors.
would certainly make it possible
for them to compete with Brazil
and all of the other Latin Amer
lean nations.
| Production Falls Of
Meantime. the present windfall
in prices has had revolutionary
effect on the industry in several
countries, especially Brazil Al
though it had long been burdened
with overproduction, and had
burned millions of tons in order
to keep prices up, actual produc-
ton has been gradually decreas-
ing. Low prices and other restric-
tions have resulted in plantation
owners reducing the numbers OF
their trees. Coffee uses up the
soil at a rapid rate and production
in the older plantations have been
reduced on this account.
But Brazilian planters are now
flocking to new sections Of the
country and starting up new plan
tations. One entirely new section
of the country in the great in
terror state of Goiaz is booming.
Within the past year land has
risen in price from 100 to 200 and
sometimes 800 per cent.
OF course. it will take some time
for these new plantations to play
any part in the coffee trade. 1t
requires from S to years for a
tree to mature. Meantime. plant
ings in Africa would mature just
as quickly. Thus, Latin growers
would still have to cope with tre-
mendous competition.
Brazil Makes 90 Million
Responsible economists point to
other serious problems for the
Latins. They are wondering what
effect the new increase in income
in the coffee countries will have on
internal economic and political
conditions. In 1948 we purchased
some 100000 bags from Brazil
alone. Imports this year are
equa1iy large, II not larger. This
means that we are buying about
2, 800, 900 bags every three months.
In the last quarter of this year,
the price for Santos Fours," a
type of coffee which usually sets
the price of all coffee for the mar
ket, has averaged so cents a
pound. Experts estimate that in
the past three months the sale Of
each bag of 1872 pounds has
brought an extra $25. In other
words, the Brazilian nation has
reaped an increased income from
|coffee Skinned to this country of