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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:The Profitability of the Early Nineteenth-Century Palm Oil Trade
Author:Lynn, MartinISNI
Year:1992
Periodical:African Economic History
Volume:20
Pages:77-97
Language:English
Geographic term:West Africa
Subjects:international trade
palm oil
mercantile history
History and Exploration
Economics and Trade
External link:https://www.jstor.org/stable/3601631
Abstract:Charles Livingstone, British Consul for the Bight of Biafra in 1866, saw the West African palm oil trade as highly profitable in the years before the establishment of regular steamship services in 1852 changed its structure. However, most historians have tended to be sceptical of this view. The present paper examines the profitability of the palm oil trade between West Africa and Britain in the period before 1852, focusing predominantly on the Bights of Benin and Biafra, the centre of the trade. A problem in assessing the profitability of the palm oil trade is the lack of evidence. However, there are accounts of seven voyages in the 1830s by ships belonging to W.A. & G. Maxwell & Co. of Liverpool. These detailed accounts show that the Maxwell voyages earned net profits ranging from 50 percent to approximately 300 percent on the capital originally invested in goods. The Maxwell accounts seem to suggest that palm oil traders in this period, or at least those operating with large ships, could hope for net profits of 100 percent over the value of goods they sent out to West Africa, and often more. The reasons for this high profitability can be seen in the way the palm oil trade was developing in this period, particularly in terms of its market structure: a situation of imperfect competition with significant barriers to entry, where prices of oil were rising and costs of British manufactured goods were falling while the value of the trade rose faster than volume. The careers and fortunes of individual traders also confirm the validity of Livingstone's view. Notes, ref.
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