SUGAR DEAL.

Taranaki Daily News, 17 July 1920, Page 5

SUGAR DEAL.

A FULL STATEMENT. decrease in production. NEW ZEALAND HIGHEST CONSUMES By Telegraph.—Press Association. Wellington, Last Night. In the House of Representatives this afternoon, the Hon. E, P. Lee (President of the Board of Trade; reviewed tlie sugar position. At the outset he said that since the outbreak of the war New Zealand consumers had sugar in greater quantities at a lower price t'haii any other country in the world. New Zealand did not produce sugar, but as compared with Australia, which was, a Bugar producer, the wholesale prices in New Zealand from 1914 to 1920 showed a saving in favor of the Dominion amounting to £2,000,000. This was the direct result of the various arrangements entered into between the Government and the Colonial Sugar Company. Under the new agreement with the company the Government contracts to purchase raw sugar f.o.b. at Fiji, pay. transportation charges to Chelsea, aWo the actual cost of refining, and to distribute the resulting sugar and byproducts through the company's agehcy to the ultimate consumers. Though the new agreement, by which the Goverhment buys raw sugar at £35 per ton f.o.b. Fiji, necessitates an increase from 3Jd to fid per pound retail for refined sugar, the New Zealand consumer continues in a better position than consumers in other countries, except in some parts of Australia, though as tho price in Auckland will be £47 per ton f.0.b., compared with £49 10s in Sydney for the same grade, It is probable New Zealanders will have some advantage over Australia as a whole. DETAILS OF CONTRACT. The old agreement at £23 15s f.o.b. Auckland was renewed for three months —April, -May, and June—although the company could have obtained £BO in the open market, the Dominion thus saving £1,293,750 in' three months. The company was not bound to sell to New Zealand at a lower price, but acted in accordance with. the spirit of the old agreement. Raw Java sugar for forward delivery could not be obtained at less than £BO, and white cost £9O. The provisions of the new agreement are summarised as follows:

The company agrees to sell a maximum of 65,000 tons of raw sugar (New Zealand's estimated requirements for the year) at the rate of £35 per ton of &4v nett litre sugar, f.o.b. Fiji, inthe present export duty of 10s a ton, the Nevr Zealand Government pv<ing freight at tlie rate of 27s 6d a ton. The raw sugar will be paid for in accordance with the landing weights and the analysis at the company's refinery at Auckland. (If the analysis shows BUgar .above 'or below 04 the standard price will be adjusted adcordingly.) Costs between the ship and the" refinery will be borne by the Government. The company -flail refine the sugar ■with all care and skill, in accordance with established practice. The charge for refining shall not include anything for depreciation or replacement of plant or the company's office expenses. The Oiovernment will pay the company managing charge of 22s 0d per ton of raw sugar melted or sold, and the company further undertakes to act as the sole agent of the Government for the distribution of sugar and by-products at a charge of seven shillings a ton on a basis of the prices fixed by the Government. The term of the agreement is July 1, 1920, to July 21, mi.

PROTECTION AGAINST LOSS. It is explained that the management charge of 22s 6d includes income tax, estimated at 89 Cd, leaving only 14s for the company. It is also pointed out that this purchase of raw sugar involves no capital outlay on behalf ,of the Government, and if retail prices are preserved there will be no encroachment 011 the consolidated fund. The statement proceeds to detail considerations taken into account in fixing the price to the consumers, and expressed the opinion that £47 will protect the Government against loss. The world's production and consumption of sugar for soma years has been increasing (from 4,000,000 tons in 18S8 to •21,000,000 tons in 1913). During the war period production had fallen off 4,000,000 tons. Europe last season produced only 3,500.000 tons, as against 9,827,000 in 1918-14.

New Zealand's average annual co»sumptipn Of 120 pounds per capita was maintained, fthile a great shortage prevailed, in many other countries. The position of the world's supplies was not fully realised till last October, since when a rush by sugar importing countries to obtain as much as possiblo resulted in a sensational rise in prices. The latest London "quotations for sugars were as follow:-j-May 0, Mozambique browns, for a shipment August-Septem-ber, 1920, £9l f.0.b., say £9O c. and f.; May S, Cuba sugars, for shipment Janu-ary-February, 1921, £96; Java whites, for shipment June-July, 1921, £66 f.0.b., refused by planters' syndicate. While the New Zealand Government was negotiating with the company, the British Government bought 50,000 tons of Java raw .sugar at £53 12s fid a ton f.0.b., for do)iverv between July and September of this year, while an important New Zeal,i rid user of sugar was compelled to get 300 tons of Java sugar to augment supplies, paying £O2 f.0.b., the price landed in Wellington being £67. When the same firm wanted a further supply the price quoted was £92 f.o.b. WHAT NEW ZEALAND USES. These facts showed that the Colonial Sugar Company had not taken advantage of its position to extract the full economic price for raw sugar from the Government of New Zealand. There has been a great increase in the number of soda fountains and sweets since 1014, and an extra consumption of sugar in pastry, cakes, and miscellaneous confectionery was one means whereby many thousands of people in the Dominion "did their bit" in the war in the name of varivis patriotic funds. New Zealand's per capita consumption of sugar for the past five years has been: Year. lbs. 1913-14 128.80 Ml4-lo 9A.6S 1915-16 1-29.92 1916-17 ]2o.9fi 1917-18 133.4S The av»ra.ge|. ja other oouatria gg£

the last year pre-war and last yea>r were: United Kingdom, pre-war 74, 19181!) 55; France, 38, 40; Italy, 12, 17; Scandinavia, Holland, and Switzerland, fiO, 50; Germany, 40, 40; United States, 81, Sit. New Zealand was therefore tie highest consumer in the world. The new agreement was as fair as the people could expect. Detailed taWes show thp estimated cost of producing a ton of sugar to he £46 5s 9d, and the estimated return from 60,000 tonts is set down at £2,777,484.