JAPAN INTO AFFLUENCE
market for Japanese cotton fabrics, and Japan is Australia's best market for wool.
The most import ant feature of recent trade is the large percentage decline in the export of Australian rural products to Japan, and the large percentage
de- cline in the export of Japanese textiles to Australia. Trade has become highly diversified, including the investment of Australian and Japanese capital in mining and manufacturing establishments both countries.
in
New Zealand
The value of New Zealand's exports to Japan in 1962 decreased by more than one-third from the record 1961 level. The decrease was caused almost solely by a reduction in Japanese buying of wool; this was partly due to a decline of sales of the Japanese carpet industry (a major buyer of New Zealand wools) to the United States.
Export of mutton was only slightly below the 1961 record level of 20,000 tons, and exports of beef dropped to 1,637 tons from the 1961 figure of a little over 3,000 tons. Trade in dairy products was also a little below the level of 1961.
Closing the Gap with Thailand
From Gopinath Pillai, Bangkok JAPAN continues unchallenged as Thai- land's biggest trading partner. In the last five years she has steadily increased her exports to and her imports from this country.
Of late Thailand has increased her imports considerably, and Japanese exports to Thailand have kept pace with this development. In 1958 Japanese exports to Thailand made up 22.9% of the total value of Thai imports in that year. In 1962 Japan supplied 29.2% of total Thai imports. In terms of actual value, Thailand imported 1,890.1 million baht's worth of Japanese goods in 1958. By 1962 this figure had jumped to 3,357.4 million baht.
The most important item of Japanese export to Thailand is machinery and transport equipment. Over the past five years Thailand's import of this has more than doubled. In 1958 the value of this import was 317.3 million baht, but by 1962 the figure had risen to 884.8 millions. The increasing number of Japanese cars, buses and trucks on the streets bears witness to this increase.
The second largest import from Japan, cotton and other textile fabrics, has also increased significantly in the last five
years.
-Thai Imports from Japan.
(Baht million)
1961 1962
1960
Machinery
and
transport equip-
ment
Cotton fabrics of
standard type
Other textile fabrics
of standard type Iron and steel
Chemicals
TOTAL
526.4
740.6 884.8
466.9
541.0 491.2
91.1 160,8 294.7 468.7 502.7 491.8 127.7 150.2 232.4
2,463.3 2,952.6 3,357.4
29.7 29.2
% of total imports 25.6
s. Page, 295, 04:244 & Comuner-
cial Intelligence Dept.
In 1958 Japanese cotton fabric imports into Thailand were valued about 395.3 million baht. This figure reached 541 million baht in 1961, but there was a drop in 1962 to 491.2 million baht. Non- cotton textile fabric imports have also registered substantial increases. Japan shipped 74.4 million baht's worth of these to Thailand in 1958. In 1962 the value of this import from Japan was 294.7 million baht,
The import of iron and steel from Japan reached its peak in 1961, when 541 million baht's worth came in. The following year the figure declined slightly, But it is likely that the import of Japanese iron and steel will again show an upward trend in the future.
Another item from Japan which finds a good market is chemicals. In 1958 Thailand imported 87.1 million baht's worth; in 1962 the figure rose to 232.4 million baht.
An obvious feature of Thai exports to Japan is that their value has more than doubled in the last five years. In 1958 Thai exports to Japan valued only 485.7 million baht, which was 7.5% of the total value of Thai exports to the world. In 1962 the value of Thai exports to Japan was 135.3 million baht, representing 14.2% of the total value of Thai, exports. In 1960 Thai exports to Japan reached a record level of 1,529.8 million baht in value, owing to increased purchases of Thai rubber and maize by Japan.
The most important Thai export to Japan by value is rubber. This business has seen tremendous increase in the last five years. In 1958 Thai rubber exported to Japan was valued at 3.8 million baht. In 1962 the figure had risen to 567.1 million baht.
Maize is Thailand's second important export to Japan, which is also Thailand's best customer for maize.
most
FAR EASTERN ECONOMIC REVW
October 31, 1963
omobiles Aviation
New Zealand's Trade with Japan
NZ '000
Exports (fo.b.) Imports (c.d.v.)
1960 1961 1962 8.900 14,800 9,400 7,200 8,400 8,500
The major item is casein with New Zealand supplying over 60% of the mar- ket; sales of butter and cheese increased, and there was a large increase in the (from export of skim milk powder £30,000 to £120,000). Exports of radiate pine legs at 9.2 million cubic feet were slightly above the previous record of 1961.
-Thai Exports to Japan--
(Baht million)
Rubber
Maize Jute Rice Castor-Seed
149.5
62.1
TOTAL
% of total exports 17.8
1960 1961 1962
664.0 542.7 567.1 438.2 355.5 236.4 48.9 131.0 88.3 143.9 72.7
1,529.8 1,410.6 1,353.0
14.1
98.9 84.5
14.2
Sources: Dept. of Customs & Commer cial Intelligence Dept.
Japanese purchases of Thai maize reached their peak in 1960). Since then Thai maize exports have been on the decline. In 1962 especially, the value of exports of this item fell to 236.4 million baht as com- pared with 1960, when the value had reached 438.2 million baht. This poor performance was partly due to the fact that Thai maize was finding lucrative markets in Hongkong and Malaysia.
It is quite likely that the trend set over the last five years in Thai-Japanese trade relations will continue as the two coun- tries have more or less complementary economies. But there is a difficulty. The trade figures show a wide gap between Thai imports from Japan and Thai exports to that country. In 1962 Thai- land had a deficit of 2,004.4 million baht in its trade with Japan, and in view of the present trend this deficit is likely to be increased in future years. The Thai Government however is sparing no efforts to narrow the gap. So far its efforts have been directed to making Japan buy more from Thailand so as to balance their own imports from Japan. If it fails in this they may even consider reducing their own imports of Japanese goods. Such a move will be a last resort, but there is still hope that the trade gap can be reduced without reducing the overall trade between the two countries.
Tea
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Sugar
Textiles Chemicals Cement Nuclear Companies
Aluminium Cool Tin Coffee Coconut
usiness
Grains Agriculture, Insurance Mining Tobacco
Timber
Rubber Power
Roads
Oil Money
Survey
& Banking Fisheries Glass Coffee Electronics
Automobiles Coconut Aviation Textiles Coul
Insurance
PO addos
Nuclear
Aluminium Steel Companies Shares Power
GRAINS
Jolly Millers?
From Bernardino Ronquillo Our Manila Correspondent BASICALLY agricultural Philippines is now trying to disprove that it can only export raw materials and will have to continue importing finished or manufac- In her comparatively tured products. young flour milling industry, the Philip pines is at least proving that she can also import the raw material and export the finished product.
The milling of wheat into flour for local consumption is one of the manufac- turing industries in the Philippines spawned by controls. The industry prospered because of the dollar subsidy it was getting from the Central Bank and the protection afforded by the Govern- ment from unrestricted entry of imported wheat flour.
Although the dollar saving effected through importation of wheat grain instead of flour is modest, the setting up of flour mills has opened new job oppor- tunities, created new sources of revenue and encouraged experimental growing of wheat.
Operation of about half a dozen mills, some located outside the greater Manila area, has obviously increased production to a point where the country can now ex- port to neighbouring countries. The sign- ing of a recent trade agreement with In- donesia has provided the local flour mil- lers an opportunity to sell part of their output to this neighbouring country to fill the gap in the trade imbalance arising from heavy Philippine imports of petro leum and negligible Indonesian purchases from this country.
A shipment consisting of 100 short tons of wheat flour is to be made to Indonesia
following signing of a contract by the
Philippine Association of Flour Millers to the PN. Marga Bhakti, an Indonesian firm.
The contract was signed by Gil Puyat Jr., president of the flour millers' associa tion, and by Sukadric Sokroatmodjo, P.N. Marga Bhakti president. It calls for delivery of the cargo to Djakarta 90 days after the association received the letter of credit and the import licence.
This sale of locally manufactured flour is the first to be consummated following a series of conferences between officials of the Indonesian trade mission that came to Manila to buy certain Philippine com- modities.
The flour milling industry, however, is facing the threat of being not able to operate at capacity or even of stopping operations unless the local mills can be
assured of a continuous flow of wheat grain from overscas suppliers.
Despite Canadian Government assur- ances that Canada would make good her commitments to sell wheat to members of the International Wheat Agreement, in- cluding the Philippines, local flour mill operators have expressed doubts over Canada's capacity to honour her com- mitments to overseas buyers owing to huge Russian purchases recently.
New developments in the wheat trade have made local flour mills sceptical about prospects of securing wheat supplies from Canada. They pointed to the following:
(1) A letter of the Canadian Consul-General in Manila stating that Canada was "not offer- ing" export wheat for shipment via Pacific Coast ports;
(2) The sale of 100,000 tons of U.S. hard winter wheat and 800,000 tons of western white wheat to Russia, approved by President Kennedy.
A spokesman of the local flour milling industry, Mr Jose Concepcion Jr., general manager of Republic Flour Mills, said there was nothing wrong or objectionable
to
about Canada, the U.S. or Australia selling Soviet Russia and other Communist countries. What he could not understand, according to the Philippine industry spokesman, is why the requirements of exporting members like Russia should have priority over importing members like the Philippines, and why the needs of non-members like China should be given preference over those of members of the agreement.
Philippine flour mills have wheat in- ventories expected to last up to December only. With Canada not offering any grain to the Philippines and the U.S. having sold US$250 million worth of hard winter and western white wheat to Russia, local mills are pessimistic over the outlook and fear cutback in operations which may force them to lay off a good deal of their present personnel and factory workers.
The Wheat War
From Frederick Nossal, Toronto JAPAN'S purchase of 800,000 tons of Canadian wheat has led to a war over global grain prices between Washington and Ottawa. The price to the Japanese was five cents per bushel higher than the recent $500 million wheat sale by Canada to the Soviet Union-but still three cents lower than world wheat prices, which have risen sharply in the past few weeks.
Canada has guaranteed to Japan that its wheat prices for the deal will remain unchanged for six months. Ottawa argues that it would rather sce the Japanese coming back for more wheat than taking advantage of anticipated future price rises.
Canada is not particularly worried about American pressures. Since May this year, Ottawa has signed grain contracts with Russia, China, Japan, Yugoslavia, Poland and Bulgaria that will bring about $900 million Pgthegoof P¶qs, and
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