THE SUGAR DEAL.

Manawatu Herald, Volume XLII, Issue 2162, 12 August 1920, Page 1

THE SUGAR DEAL.

COMPANY’S ENORMOUS

PROFITS

ESTIMATED AT TWO MILLION

POUNDS.

The Fiji correspondent of the Auckland Star, writing in regard to the price of sugar, says: —“The Sugar Refining Company under normal conditions was making substantial protits with labour at 2s (id, a day in Fiji and a 5s bonus. Now it is paying 2s to 2s fid a day and gives 11s bonus, and £1 for (‘very acre under cane. In spile of this increased cost it looks as if the profit for 1020 would more than double or treble all previous records. It is true that the company could have doubled even this probable profit by selling to Europe, but as it relines its raw sugar in New Zealand it played the safe game by renewing its contract with the Dominion, although at the advanced price of £34. No one here grudges New Zealand her cheap sugar, but th ( e local view is that it would have been fairer and much mure politic for the company to pay the men who produce the cane a higher price, even if the New Zealand consumer had to pay a little more. Low prices have driven practically all European planters tail of business, and only hist week the largest independent planter announced his departure (o find fresh openings in Africa for his capital and his energy. This citizen could have been retained in Fiji if a fail 1 living price had been paid for his cane. Then, again, the company would only guarantee a price from year to year, which made development difficult and hazardous." The profits of the -agar companies in Fiji, add.- the correspondent, were well and briefly pul betore a Levnka audience a week ago by the Hon. .1, M. fledsl rom, in an election -peach. Mr lledstrom was born in the colony, and is the managing director of Morris, Hedslrom, Etd., one of our chief mercantile and -hipping firms. In his remark's, Mr Hedslrom predicted that sugar companies in Fiji this year would show a profit of £2,000,000. Judging b\ the price of Java and Cuba sugar, the market value of sugar f.o.b. Fiji would be about .0)0 a ton. Tin* (olottial Sugar Refining Co, had contracted to sell to New Zealand for about 014 a ton. His estimate of the cost of production showed that the price paid for cane was £2l per ton, or, roughly speaking, £8 8s for enough cam' to make one ton of sugar, lie estimated that the cos* of- manufacture and bags would average about £4- 12s per (on, giving a net cost f.o.b. f iji of about £l4 per ton, so that it would not be unreasonable to estimate a prolit ol £2O on each ton of sugar shipped to New Zealand. Several thousand lons of sugar were, however, also -hipped to Vancouver at a much higher price, so that the prolit ol the sugar companies could be approximately estimated at £2.000,00(1.