THE SUGAR PROBLEM

Dominion, Volume 13, Issue 166, 9 April 1920, Page 5

THE SUGAR PROBLEM

INCREASED PRICE IN AUSTRALIA

FEDERAL PREMIER OUTLINES

POSITION

The action of the Federal Government in increasing tho retail price of sugar to Gd. per lb. was the subject of a vigorous debate in the House of Representatives.

The Prime Minister made a f.tntement indicating the position. It was necessary, he said, to charge .£49 per ton wholesale and Gd. per 11). retail, because the estimated supplies to June 30, 1920, cost an average price of .£SB per ton refined. The net return upon sale at jE49 per ton was .£45 10s. Therefore every ton of sugar at present 'Ix-ing sold, even at the enhanced price of Gd., left a loss on the 75,4(>4 tons sold at Gd. a lb. between March 23 and .Juno 30 this year a! no less than JE943.302. If it charged a pricc to enable it to como out square tho retail price would have to be at least lfld. Unless the Queensland iroo was purchased by th* Commonwealth Government the price of sugar for the next four moj'ths would be at least lOd. per lb., and it could only be re'ailed at lid. if it purchased the Queensland crop os provided in the drni't agreement laid before Pari'anient..

The position might be summarised as follows:—toss on sumtr sold from March 23 to June 30. 75,4(14 tons .at .£l2 10s. per ton, .£943,.'102; loss on 20,000 tons of Cuba sugar °old from July 1 to new crop. ,£580,0.10; total, i 11,533,302; profit on Queensland and New South Wales crop, -Tulv 1 to March 1. 1921, 145,000 tons at £1 10?. per ton, ,£1.087,509; credit bnlanca in "ucnr account on December 31, 1919. ,£225.000; total. -.£1,312.500; deficit, ,£220,802. Against tliis_ estimated debit must b? placed the possible receipts from the operations of the Millnqiiin refinery, which, if the estimates.were correct, ■would reduce the debit balance to From the figures given, it would be clearly seen that the price now charged for sugar to the public was much lower than the price pa id by the Commonwealth for the sugar; that lliif sugar was the only sugar available for the next four months;, that ths Commonwealth would make a loss of many milTons by soiling at (kl.; that it could only afford to do so if it aennired tho Queensland crop at .£3O 6s. frl.. pooled it_ with foreign sugar, and sold it at a uniform price. It was estimated that next season's Queensland and New South' Wales crops would not exeped 145,000 tons. As the venrly consumption was over 280,000 tons, it was obvious further purchases of foreign sugar must lie made in order to supply the community until the 1921 crop was available. This would bs anything from 110,000 to 120,000 tons, and the prieo to be paid was quite problematical. If it enabled the Commonwealth to sell sugar nt less than Gd. a lb. after March next, it would certainly do so. It was obvious'that there was no alternative to an increased price for retail sugar. . The price proposed to be paid for Hie locallv-grown sugar, that is .£3O Gs. Bd., was by far the lowest at present ruling for sugar in any part of the world, added to which was the fact that the sugar-grower, as ft primary producer, was as much entitled as the wheat, meat, or wool grower to something rpproaching the world's parity. If tho sugar-grower got even one-half of tho world's price to-day he wouM receive more than the prico he was willing to take. He did this in return for a fixed prico for three years. 1 The cost of producing sugar, too, lind increased considerably, ■ and wages, which absorbed 80 per cent, of the cost of production, were expccted to be further increased in tho near future. . '

The White Australia policy, its applied to the sufjar industry, had provided Australia during the war with the cheapest sugar in the" world, and Australians had lio reason to complain that lioiv, as a result of the conditions over which neither they; nor the Queensland grower had control.'they had to pay moro for their sugar than they, had during tha last five years. They would still pet sugar cheaper, however, than r,ny other people in the world, and they would get this "because the Australian grower got less than any other grower. The' trouble was not that we paid ioo much for Australian susrar, but that there was too little of it to supply our needs, and foreign sugar had to he bought at nearly three times the price.

The cost of refining nnd tho amount paid to the Colonial Sugar jßofinary Company for maii&Einp. financing, sellinpr,.' and distributing,- had little effect on . the price. These charges in all amounted to a litle more than a lb. The increase in ■tho price from 3Jd. to Gd. p?r lb. was caused by the increased return necessary to balance the price of foreign sugar, and to avoid a still heavier loss—tho pensy per lb. increase paid to the sugar industry, the IJd. per lb. for the purchnse of foreign sugar to meet tli'e consumption, nnd 'tho increased amount allowed the retailer. As to the charge that the 'Commonwealth ought to have foreseen the local shortage nnd bought enough to make any increased price unnecessary, the Government could not $ee tho end of the war, and could not. know that tho local crop would fall short of the estimates, and so did not buy foreign sugar for years ahead;..lrat it did buv large quantities nf foreign sugar, and the community had enjoyed .the advantage of it for many months. -,Mr. Hughes added that no one could say what price foreign snuar would be a'year or two ahead; but tlice were eood reasons for believing that tho price would not fall to the pre 7 war level during the next three years.