Evening star., 1938-06-08
QUOTA CUT AIDS
SUGAR SLIGHTLY
Reduction Amounts to Only
81,195 Tons, Against
Huge Surplus.
BY J. G. DONLEY.
Dispatch to The Star,


Special Dispatch to The Star.
NEW YORK, June 8.-Sentiment
in the sugar trade has received some
slight lift from the action of Secretary
Wallace, late last week, in revising
downward his estimate of sugar con-
sumption for the calendar year 1888.
Market observers are encouraged to
believe that Mr.. Wallace is aware Of
the distress caused by the low price
of sugar and that he Is willing to do
something to relieve the situation.
But fact-facing on the demand-and-
supply situation leaves no other con-
clusion than that the quota revision
is unimportant.
The revised estimate OF 6,780,566
tons compares with the previous esti-
mate of consumption, issued December
20, 1887, at 6,861,761 tons. So the
reduction Is only 8l,195 tons. whereas
the various trade estimates indicate
that there is today q surplus of from
100000 to 100000 tons.
And the slight quota reduction will
be offset to considerable extent by
the re-allotting of the deficit of 53.883
tons in the quota of the Philippine
Islands, in accordance with the Sec
ton of the Sugar Act of 1887 which
directs the Secretary of Agriculture
to prorate to foreign countries other
than Cuba (the full duty paying coun-
tries) the amount of any deficit in
the quota Of the Philippine Islands.
Sentiment Helped.
Pointing out that the quota reduc-
ton is not very important in view of
re-allotting the Philippine deficit, the
Commodity Research Bureau SAYS in
its latest futures market service:
However, We feel that the move is
of great psychological consequence.
The entire sugar industry has been
depressed by the oft-repeated attitude
of the Secretary of Agriculture that
sugar prices were high enough, if not
too high. The quota reduction should
be interpreted as an indication of
reversal Of administration opinion and,
possibly, the signal for further quota
reductions. With invisible supplies of
refined sugar estimated at the ire
ducihle minimum, the trade is now
looking for refined buying move of
very large proportions"
One of the old-time traders In raw
sugar futures used to say that duty
paid raws were always buy when
they dipped below 3 cents per pound.
The sagacity of that advice. previous
to the 1929-1934 depression, lay in
the fact that the history of sugar
prices revealed very few occasions
when the commodity ever had sold so
low Whether it will hold good under
a controlled sugar economy remains
to be seen.
1882 Low Cited.
The price of duty-paid raw sugar
just barely broke the Scent level in
the first quarter of this year, but it
has recently sagged all of 35 points
below that level, getting down to 2.65
cents, against the low point of 2.57 in
1882. The price was also below the
Scent level in 1888 and 1884. In
early 1885 it managed to rise above
the critical mark and did not make
the plunge again until early this year.
According to long-term price chart
compiled by the Commodity Research
Bureau, it is necessary to go back to
early 1914 to find the most recent
previous year when duty-paid raws
sold below the 3-cent level. And be-
tween 1845 and 1914 there was only
one year when raws definitely broke
the Scent level. That was in 1898,
year of rather unpleasant economic
history.
| tCopyrisht, 1881