Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1917-11-19
FACTS ON COST
|. Of PRODUCTION
IN P. |. GIVEN

| MANILA, P. l., Sept. 19.-At the re-
quest of Governor General Harrison,
who has been taking deep interest in
the difficult position in which the Phil
| ippine sugar producer finds himself as
result of the existing international
situation, an exhaustive investigation
into the cost of producing sugar in the
Philippines has recently been made by
tGeorge H. Fairchild, president and
general manager of the welI-known
company of sugar factors and export.
ers. WEIGH, Fairehild & Company, Inc.
He was formerly with the Makee
Sugar Company of the island of Kauai
1 in the territory of Hawaii and a terri
ftorial senator. ==s
The data were desired by the Gov
ernor- General for use in connection
with efforts which have been set on
foot by the Philippine government to
have freight rates between the United
States and the Philippines fixed at a
Figure which will make possible the
selling of Philippine sugar in the Uni.
tied States market. Mr.. Fairchild's in
vestigation, upon which he has recent,
lily submitted his report, goes fully into
details of production costs and is the
most comprehensive study OF the SUD-
iect which has been undertaken.
The conclusion, arrived at by Mr..
/ Fairchild is that with the price for
96 degree sugars at the figure fixed by
! the United States Food Administra.
ton, Philippine sugars can not pay
more than $50 per ton of 2,240 pounds
to New York, equivalent to $1.34 per
100 pounds. The report points out
that the rate to New York before the
war was $3.50 per long ton; it is now
from $55 to SOS, and Philippine sugars
are barred from the market at the
sugar prices now fixed so long as these
uncontrolled rates obtain.
The report, which is based upon
! data for the island of Negros, the prin
cipal sugar region of the islands, and
the one in which production is upon
the largest scale, follows
The data given herein represent an
attempt to ascertain the cost of pro
ducing sugar on the island of Negroes
Proportion of Grades !:
In answer to the question: What
are approximately the percentage oil
the various grades of muscovado sug
ars produced on Negros during the last
five years; also the average prices
landed Iloilo at which these grades
have been sold,' a person who is in {
position to know asserted that the an
1ual crop may be segregated into
grades about as follows: Nos. l and 2
35 per cent; Nos. and 4, As per cent;
= Nos. 5. 6 and corriente, 20 per cent.
1T is we'll known that but few plant
ers are able to produce No. l sugar
only; many others produce no higher
than No 8, but taking the above segre
cation as approximately correct, whe1
the various grades are selling at the
prices stated below, the average mar
ket value from an hypothetical haci
enda producing according to the per
centage given above would be 5.4(
lpesos per picul or 1893 cents per pount
Zone pieul equals 1894 pounds"
Mr. Fairchild then takes a hypothe
i teal case of sugar planter an;
proves that necessary capital require
ment and operating expenses ar,
greater than the return for the pre-
duct. His figures show that where il
the island OF Negroes it costs from 81 L
} to $1.73 per hundred to produce Philip
pine island sugar cannot pay NOR
than $1.34 per hundred in freight an
meet the present price in the Unite,
} States market.
= In conclusion he adds. ITO the Iloil
: market price there should be added 2
, centaVos per picul (.0S93 cents De
) pound) for the expenses for placin
the sugar aboard ship. To the cost O
freight from Iliolo to New York Their
should be added from 4 to 6 per cen
: OF the present value of sugar for ma
rine and war insurance, loss in weight
:, export charges, warfage, interest, ett
Prior to the war the cost of a suga
central with the requisite transports
ton, storage, and shipping facilities t
turn out 100000 piculs Q4,00O tons
year was $1,250,0O0.
cooperating expenses, exclusive of il
terest on capital and an amortizatio
!. charge Or allowance for depreciatfol
: were $125,000, given a unit cost c
, 10 pesos per picul, or $S.964 per tor
! The return on the capital inyes
ment at minimum rate or 10 Der cen
: would be $125,0O0 additional, to whic
should be added a further charge c
$o.5S5 per ton for depreciation an
amortization charges to retire the ca,
ltal investment at the end of the perio
OF the contract, viz, 80 years. Thi
brings the cost to the central. with a
allowance for interest on the capita
: investment, to 8 pesos per picul. O
S21.513 per ton. -
Since the war the price of all wa
! materials required for the TRANSPORTS
, tlon of the cane and the recovery n
the sugar therefrom have been advant
ing rapidly, SO that the cost of mann
lacture may now be from % to so ne
cent higher than it was in 1914, Whit
tits not possible at the present time +
ascertain this advance accurately W
may find that the allowance to the cor
tral should be nearer 4 pesos than
: pesos per picul, or $2S.6S4 per ton
No allowance has been made bnr