WORLD GLUT OF SUGAR

Shannon News, 8 June 1926, Page 4

WORLD GLUT OF SUGAR

MILLION TONS A YEAR TOO MUCH. PRODUCTION OUTSTRIPS CONSUMPTION. Vast stores of sugar are lying in warehouses throughout the world, unbought by shippers, unwanted by merchants, and unneeded by consumers, says the "Daily Express." At the present moment there is too much sugar in the world. Production nas outstriped use by nearly 1,000,000 tons a year. That is the reason for the prolonged depression in the sugar markets of London, New York, Liverpool, Paris, and. the other great produce distributing centres.

A .standard quality of sugar, which cost 2d a pound retail before th e war and Is just after the war, can now be bought at most shops in England for 3d, out of which l|d is duty paid to the State. Low prices are expected to prevail for a long period. Brokers and manufacturing buyers are at present estimating the sugar position for the next. twelve mouths. Daily reports are coming to hand of the harvest in Cuba, which is the chief source of the world's supply. A million tons are being carried in tne ports of Cuba alone, and as the new season's sugar is sent down from tne growers the accumulation is steadily growing. The harvest of the new season's crop in Cuba amounts to date to 2,863,000 tons, on only 50,000 tons below below the quantity for tne similar period last year. At the end of last season there was a surplus of 600,000 tons of sugar in the world. • Sugar-producing- countries had a toital output of more than 24,000,000 tons, compared with 23,000,000 tons in 1924, nearly 20,000,000 tons in 1923, and slightly more than IS,OOO,OCi tons in. 1922.

These .figures show the enormous jump in sugar production. The abnormal increase og 1,500,000 tons between 1922 and 1923, and no fewer than 3,372,000 tons between-1923 and 1924 dislocated the whole business of) the industry through all the stages from grower to refiner and to retailer. The ordinary increase in world Consumption is 1,000,000 tons a year. Each years' output should be roughly 1,000,000 more than the year before but not mor e than if the even flow of, commerce is to be-maintained. Instead there has been surprising overproduction. Cuban growers made immense fortunes during the war, because the sugar-beet industry in Europe was practically killed. Consequently Cuba kept adding to its acreage under sugar cane. When r war ended the European industry revived with astonishing seped. It came back to normal by 1922, with 4,000,000 tons of sugar made and sold, and by 1924 the European factories were producing more than 7,000,000 tons. Millions of money have been lost over sugar as readily as fortunes were made in the times of stringency of supplies. Sugar reached a pinnacle price of 120 s a cwt. in 1920 on the wholesale markets; it changed hands recently at 14s a cwt. Once there was a period when sugar in New York .-slid down the money scale from Is Hid a lb. to 2£d. Growers in Cuba have for months past sold at less than production costs, and even then they have had thousands of tons left on hand. The British West Indian growers were saved to a great extent by the preference given to their sugar by Great Britain, in the form of reduced duty. British consumers have had the full benefit of the slump. Sugar is one of the few household commodities which is relatively much cheaper now than before the war. The duty ranged before the war from lOd to Is Id a cwt., and now it varies from 5s 7d to lis a cwt.

"There is bound to be a long period of low prices," said one of the leading market experts in London to a "Daily Express*' representative. "It must take time for consumption to catch up with production, and until then' we cannot hope for economic stability. Consumption is increasing, particularly in the United States, where a greatei use of sugar is one of the effects of prohibition. "Gradually the position will be equalised. There is already an upward tendency in the futures market, but whether that is only a spasm or has a real basis no one can yet state.

"Of course, if there were a partial failure of the European beet crop or bad harvesting weather in Cuba, then the surplus sugar would be quickly taken up, but short of some outside influence, like the weather, prices should stay low.

: "An important aspect of the matter from the British taxpayer's point-of view is what will be the future of the subsidised English sugar-beet industry in face of a world producing more sugar than it needs. Those of us who market consider that once the subsidy is withdrawn the industry is finished."