Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-09-19
COST OF RAW SUGAR
! AND THE RETAIL PRICE
Consumers Do Not Always
Benefit When the Crude
Product Is Reduced.

With the tariff On raw sugar about to
be reduced greatly, with a provision that
II go on the free list at the end OF three
years. the question on many lips Is,
with the cost Of sugar to the consumer
be reduced?''
The bureau OF labor statistics of the
Department Of Labor has just issued a
bulletin which throws some light on the
relation of the cost of raw sugar to the
price of the refined sugar paid by the
American consumer. All of the sugar
used in this country Is refined here. The
report of the bureau is confined to cane
sugar.
TIE report shows that the actual cost
OF the raw sugar does not always bear
directly upon the cost 10 the consumer
although the democrats in putting through
their sugar tariff schedule have insisted
that this will be the case, and that a re-
duction of the duty on raw sugar, en-
aiding the refiners to purchase raw sugar
at less cost. will mean reduction in the
price or sugar to the consumer
Comparisons in Prices.
For instance. in February, 1910, the cost
Of raw sugar to produce one pound of re-
fined sugar was Abs cents. and the sugar
pound
In February, 1911, however, the cost
Of raw sugar to produce one pound of
refined sugar was 1900, while the re-
tailer's price was 5S47 cents per pound,
an increase over the price of the preyi-
| the raw sugar was 1888 cents, and the
retail price was 5.306, and in August.
1911, the cost Of the raw sugar was
4.137, and the retail price was 5.755
| cents per pound. In both these cases
| the cost to the consumer had been in
creased, although the cost of the raw
sugar paid by the refiner had decreased.
The report has the following to say
in regard to the profits made by the
refiners, the jobbers and the retailers:
"Refiners' margins fiuctuate widely, as
a refner must fulfill his contracts with
his customers, notwithstanding stoppage
of his production from any cause, ant
he is therefore compelled to carry a
large stock Of refined sugar. Moreover
while with q falling market the refiner's
customers do not make large contracts, but
buy for daily needs only, nevertheless he
must continue manufacturing in order to
have on hand sufficient completed prod
uct to supply demands. A large invest
ment in raw sugar is therefore necessary.
and under such conditions refiners. in
addition to their ordinary business as
manufacturers, naturally become specu-
lators on a large scale, their profits be-
ing increased or leSSened according &c
their adroitness in buying. For the
months for which data were secured the
refiners' gross margin varied from ap-
proximately forty-six hundredths of q
cent to eighty-five hundredths of a cent
per pound.
Jobbers' Margins Small.
"Jobbers margins are, as a rule, uni
form, but these middlemen seem to have
largely settled upon sugar as an article
10 be sold as an attraction or an accom-
mediation to customers and without ex-
pectation of any considerable direct
profit. For the months for which data
were secured, the jobbers' gross margin
varied from approximately seventeen
hundredths of q cent to thirty-two-hun-
dredths of a cent per pound except In
August, 1911, when, owing to fortunate
buying on the advancing market, the
jobbers' gross margin reached fifty-hve-
hundredths of cent per pound.
Retail groceries are SO numerous that
thes prices are subject to perpetual
comparison, and sugar is such a con-
slant item in consumers purchases that
any change in it's price Is subject to
quick detection and comment Retailers,
therefore, seem to aim at a steady price
for sugar rather than a consistent mar
gin, trusting to a future decline in cost
to Offset the effect of q period of close
selling. For the months for which data
were secured the retailers gross margin
varied from approximately thirteen
hundredths of cent to sixty hun
dredths OF a cent per pound