THE SUGAR DEAL

Greymouth Evening Star, 13 August 1920, Page 3

THE SUGAR DEAL

«<J>~ L '■ COMPANY'S ENORMOUS PROFIT. ESTIMATED AT TWO MILLIONS. (Por Press Association.) AUCKLAND, This day. The Fiji correspondent of the Star writing in regard to the price of sugar, sajs : —"The Sugar Refining Company under normal conditions was making substantial profits with labour at Is 6d a day in Fiji and a 5s bonus, Now it is paying 2s to 2s 6d a day and gives' lis bonus, and £1 for every acre under cane. In spite of this increased cost it looks as if the profit for 1920 would more than doublt or treble all previous records. It is true that the company couLl have doubled even this probable profit by selling to Europe, but as it refines its raw sugar in New Zealand it played the safe game by renewing its contract with the Dominion, al-

thouirh at the advanced price of £34. No one here grudges New Zealand her cheap sugar, but the local view is that it would have been fairer and much more politic for the company to pay the men who produce the cane a higher price even if the Xew Zealand consumer had to pay a little more. Low prices have driven practically all European planters out of the business, and only last week the largest independent planter announced his departure to fresh openings in Afr'ca for his capital and his energy. This citizen could have been retained in Fiji if a fair living price had been paid for his cane. Then, again, the company would only guarantee a price from year to year, which made development difficult and hazardous." The profits of the sugar companies in Fiji, adds the correspondent, were well and briefly put before a Levuka audience a week ago by the Hon. J. M. Hedstrom in an election speech. Mr. Hedstrom was born in the colony and is the managing director of Morris, Hedstrom, Ltd., one of our chief mercantile and shipping firms. In his remarks Mr. Hedsfrom predicted that sugar companies in Fiii this yeai would show a profit of £2,000,000.

Judging by the price of Java and Cuba su'f.ir, the market value of su?ar f.o.b. Fiji would be about £SO a ton. The Colonial Sugar Refining Co. had contracted to sell to Hew Zealand for about £34 a ton. His estimate of the cost of production showed that the

price paid for cane was £2l net ton. or, roughly speaking, £8 8s for enough cane to make one ton of sugar. He estimated that •' '' cost of manufacture and bags wiv ! 1 average about £4 12s ner ton, ••; ving a net cost f.o.b. Fiji of about £l4 per ton, so that it would not be unreasonable to estimate a profit of £2O on each ton of sugar shipped to New 'Zealand. Several tons of sugar, however, were also shipped to Vancouver at a much higher price, so that the profits of the sugar companies could be approximately estimated at £2,000,000.