TEXTILES: No Boom in Burlap

There should be a burlap boom. The U.S. is critically short of burlap, and Calcutta warehouses are bulging with it. Yet ships in the last month have been returning from India with unused cargo space. Reason: Indian exporters have jacked their prices up 15% in the last six months, but OPA maintains a tight price ceiling on burlap in the U.S. (at the dock, it now costs $15 per bale above the ceiling).

The same squeeze play occurred in the last war, but that time Elder Statesman Bernard Mannes Baruch pulled a shrewd counter-squeeze. After he persuaded the U.S. Treasury to stop shipping silver (to bolster India’s currency), burlap prices came down in a hurry. Burlap importers—and their bagless customers—wish they had another Baruch.