The Gisborne Times. PUBLISHED EVERY MORNING. SATURDAY, MARCH 26, 1910. THE RUBBER BOOM.

Gisborne Times, Volume XXVIII, Issue 2769, 26 March 1910, Page 4

The Gisborne Times. PUBLISHED EVERY MORNING. SATURDAY, MARCH 26, 1910. THE RUBBER BOOM.

The cabled information that raw rubber has been sold in London at up to 11s .per lb, and that the market 'is still rising, is indicative oi great 'pressure of demand upon supply. This 'is much the highest price ever realised, 'for this commodity, being about twice 'the figure which ruled only three or 'four years back, when the Stock Exchanges had their first wave of excite'ment over plantations. That being so, it is not at all surprising to hear that new companies are being promoted every week in London. As a ma tter ol Tact, there has been a continuous run of London promotions since the begin'uiug of the year, and several Continental companies also have been added fie- the list. For the moment rubber is decidedly more attractive to the speculative public of the world’s chief financial centres than cither gold or precious stones. Those plantations which 'are fortunate enough to be in the producing stage are paying fabulous dividends, as they may well do when it is reflected that the cost of growing and marketing the product rarely exceeds about fifteen pence per pound. 'Naturally, while such a margin of profit obtains a.s that represented by the 'difference between a producing cost of fifteen, or, sav, even eighteen pence, and a selling value, of ten or eleven shillings, capital will rush eagerly to the 'support of the industry. The question, 'however, arises as to \\;hether in the 'fever of speculation even rubber will fie overdone. No doubt the new companies floated this year in London '•alone are sufficient —assuming that 'they carry out their planting programmes—to account for an immense 'increase in the world’s supplies five or six years hence; but whether the production then will be in excess of requirements or not will depend upon •many factors which are at (present difficult of. estimation.

Last year the world’s supply was given as 69,000 tons, which all went into 'consumption. In 190 S the supply was '65,000 tons, and in 1907 69,000 tons. A.s in these three years the proportion of plantation rubber increased, the tsmall difference in the totals suggests 'that the; output of wild rubber from 'the tropical forests of South Americ.: and Africa has been diminishing. Ihe 'natural .forests up to four years ago ■were supplying, roughly, 95 per cent, of the world’s requirements, but as the ‘manner of collecting wild rubber generally involves the destruction of the trees, it is considered inevitable that 'the diminution of native supplies muft fiontinue until a point is reached it 'which the plantations will have the 'market to themselves. At the end of T 909 it was estimated that, roughly, ’750,000 acres in different parts of the 'tropics were under rubber trees, out ’this still left a considerable margin for 'further planting. Tb" possibility of some substitute for rubber being invented 'now haunts the investing mind 'bo a lesser extent than it did, but a 'factor in Arresting the rate of future consumption is the development of processes for rejuvenating the perished article. Nevertheless, a great and sustained expansion of consumption is inevitable. That prices can long remain at the present abnormal level is not to 'bo expected, nor, in the interests of the industry, to be desired. There will be fluctuations, but in time growers may confidently expect to see prices settle down at a level which, while sufficiently profitable, 'will permit of the freest use of tlreir product. This is the basis upon which investors in new rubber ventures should estimate their ‘prospective returns.