The labor journal. [volume] (Everett, Wash.) 1909-1976, 1917-10-12
PRICE OF SUGAR TO BE STABILIZED =,
AND PRICE TO CONSUMERS REDUCED

Inc HdCuTdl cndnflelS OF trade Wer
then suddenly disrupted, and larg
part of the worlds available suppl
of sugar was cut off, due to the fac
that the central powers were NJ
longer exporters. This was follow
ed by reduced production of suga
in France, Belgium and Russia, leav
ing the world with decreased sugar
supply, but without any correspond
ing increase in consumption.
Sugar producers were then in &
position to exact high prices, but
now, through governing regulations
it is intended that consumers in.
terests shall be protected in an ef-
fort to combat the old laws based
only on supply and demand.
Agreement By Refiners
AS step in this process refiners
have agreed to refine sugar on a
net margin between the cost of their
raw material and the selling price of
their refined product of approximate
ly l.3O cents per pound after trade
discounts have been deducted. The
basis for this margin had it's origin
in the five-year pre-war period.
The figure was arrived at by taking
the average margin for five years
previous to and including 1914 and
adding the increased cost of opera
tion which refiners must now face.
For example, in refining sugar there
is loss in weight of about seven
pounds on every hundred, and as
raw sugar is expected to cost, in
round figures, about 2 cents per
pound more than in the five-year pre-
war period, this alone amounts to an
increased cost of l 4 cents per hun
dred pounds. Bags, jute and cotton
have increased in price equivalent to
about Is cents p.-' hundred; coal. 5
cents; labor, 8 cents; bone black, 2
cents. These increases added to the
old prewar basis bring the figure
up to 1.281 cents, so that in selling
on margin of 1.3O cents net
only .O19 cent per ponud has been
eft to cover the increased cost of
ighterage and carriage, added in
crest on the larger amount of money
invested in the business, increased
insurance, due to explosion risks
md the higher valuation of sugar. as
veil as the higher cost of all ma
erlals used in the refineries. Of
curse this small fraction will not
over these increased costs, so it will
'e seen that, notwithstanding the
act that the differential is higher
han formerly, the actual net mar
in of profit to refiners is about
he same as the prewar basis. Their
dvantage must come mainly through
bility to run their plants at full
apacity for nearly the entire year,
ue to the large increase in export
usiness which is now obtainable.
Effect to Be Felt Soon
The Food Administration is nat
rally much gratified in securing this
o-operatiion, as through it an i'm
ortant step has been taken to elm
late speculation and place values on
stable basis, the effect of which
Ill be more apparent during the
tier part of this year and in 1918.
hen new sugar crops come on the
arket. |
Within a short time conferences be- 1
veen representative of the Cuban {
overnment, Cuban planters, and the [
ood Administration will be held and g
e price to be paid for Cuban sugar S
r the next crop, which begins in r
ecember, will be considered. q
The cost of producing sugar in I
lba has advanced greatly within the +
lst three years, due to increasing b
st of labor, increasing cost of all u
'iNS VI ouPPhSS, Increased IfelgnC
tes, cost of bags, and increased
xes. These conditions will natural t
be taken into consideration by the .
in agreeing on a f
ice with the Cuban planters, as it a
essential that fair profits be al Ii
wed to all producers in order that Il
be not discouraged. In p
easing the production of sugar to- t,
y is just as important, if not more N
than reducing the price to the C,
nsumer, as our allies, fighting in
trenches of Europe, must be kept e,
pplied with an adequate amount W
this most important food product. p
Reasonable Price For Service Vi
The refiner sells his product to the p
olesale grocery jobber through t
'ker and in turn the jobber sells to OF
; retail trade. The margin of n,
ofit for the jobber and the broker, b,
L