SUGAR CONTRACT

Dominion, Volume 13, Issue 251, 17 July 1920, Page 8

SUGAR CONTRACT

A FULL STATEMENT A FAIR DEAL TO DOMINION In the House of Representatives yesterday afternoon tho Hon. Mr. Lee, Minister of Industries and Commerce, made his promised statement, giving details of tho new agreement made between tho New Zealand Government and the Colonial Sugar Company, regarding the supply and price of for Ntrw Zealand for next year. The present agreement is an entirely new departure as far as New Zealand is concerned. Tho former agreements consisted of an undertaking on behalf of tho company to supply New Zealand's normal requirements at a fixed price for refined sugar supplied from tho Chelsea Refinery during- the periods covered by tho respective agreements. Under the present agreement the New Zealand Government contracts to buy raw sugar- f.o.b. Fiji, pay transportation charges to Choisea, and the actual ci.st of/refining, and to distribute tho resulting refined sugar nnd bv-products through tho agency of the compauv to the ultimate consumers. Though the "new agreement, by which tho Government is bnyin? the Taw sugar at .£35 per ton f.ob. Fiji, necessitates an increase from 3!d. per 11). to 6d. per lb. retail, for refined sugar, the New Zealand consumer will eontinuo to Ik in a much better position than tho consumers of other countries, except perhaps those in some narts of Austria. As the price of refined sugar will be ,£l7 f.o.b. Auckland, as against .£49 lfls. for tho same (trade f.o.b. Svdner, it is probable that New Zealand 'consumers will have somo advantage over those in Australia as n whole. . . . The Expired Agreement,

Tho previous agreement by which NewZealand obtained refined sugar at the remarkably low price of £23 15s per ton f.o.b. Auckland, was originally fixed for onlv nine months ending Marchl 31, 1920. Tho negotiations for the rew agreement benn cnrlv this year, and reached .ft definite business stage on January 2.1 m an interview between the Board of Trado and Mr. A. Astley. who represented the company. Mr. Astley explained that tho heavy ' increase in tho cost of production of raw sugar made it impossible. for his company to enter into another agreement on anything like the old lines; but stated Hint his company was willing to sell the whole of the estimated output of the Fijian mills (except 15,000 tons to be reserved for special punwses) on a basis of £.15 per ton f.o.b. Fiji for 91 net titre sugar Ivnw) THo 15,000 tons included 7500 tons at £'17 per ton for delivery subsequent to .Tune, 1020. "Wo have sold and can sell, as .1 am talking, free at £47 cost and freight," ho said, which is. wo take it, the equivalent of £42 per ton f.0.b." For supplies which the company had available for delivery during April. May, and June this year, the price could have equalled, the rates obtained for Java's production. If von want Java sugar (raw) to-day it is £80, that is for delivery next June, ho remarked. "If von want Java whites today for shipment this week it will cost yoii £90. Wo arc being begged to sell su»ar for next year's delivery at £47 per lon. Wo put'tho freight down at £5, which leaves us £42 per ton for the sugar" (i.e., raw sugar). . Mr Asllev outlined the basis of an a"reement similar to tho one which the company had already made with Australia. ' After this interview the negotiations were continued with tho Prime Minister, with the result that a definite agreement, drawn up by the then Solici-tor-General (Sir John Salmond) was siened on June 23. The new agreement gives JSew Zealand 05.000 tons of sugar (one. vents sunplv) at m nor ton f.o.b Fiji. .Hie Colonial Sugar Company is to refino the «u°ar at Auckland, charging the Government the actual cost. The company will act as cents of the Governmont m the sale and'distribution of sugar and byproducts at a charge of 7s. a ton. The n-reement extend- until June 21. 1921. The terms, said Mr, Lee. are thoroughly satisfactory, and will involve no charge on the pub ic funds/ Sugar could not be secured from any o ex source, a't as low a price. New _Zealai! s consumption of sugar per >f *?* mm,, in 1917-18. as against 52b. .in Britain. 381b. in France, and 731b. in the United States. ... ~ «\bundnnee of additiona information is available," added the Minister to ,m»ve Hint Xew Zealand's people have reeved a very Wr "' *»sar to o the p«Mt ™l the new agreement „s P asfair a deri as the peono could reasonably expect. Indeed be UrU s"t out in this report prove that Mew Zealand lias received Parent." treatment from a company which eon Id h,T<Sd its.sugar at a .much higher rate Van the prices fised m this agreement."