THE RECENT RISE IN SUGAR. (Economist, ISth November.)

Otago Daily Times, Issue 4684, 21 February 1877, Page 2

THE RECENT RISE IN SUGAR. (Economist, ISth November.)

I During tho last month or two there has been a i very ripid rise in the price of sugar, the prolonged clienpnes3 of which article, notwithstanding an enormously increased consumption in this country, had justly attracted much attention ; and for various reasons this lise is an event of general economic interest. The last few years havo witnessed the quick reduction and final repeal of our mg»r duties, tho great increase of the sugar duties in Franco, and consequently increased bouoty on sugar refining in that country, and simultaneously a great development of the production of sugar throughout the world, lnis rapid increaae of prgduction and tho constant depression of price which followed, although so much had been done to stimulate consumption, were certainly remarkable; aud now that a change has come, it becomes interesting to enquire what now light it throws on the circumstances of the past depression, and what consequences it may have, ab we pointed out a year ago, tha prolonged cheapness seemed to have brought about a, change in the hibits of the people with regard to this ccmtno'lity, which had become about us cheap as flour. Much of the reasoning applicable to tho price of wheat becomes, therefo'-c, applicable to me price of sugai, as may very easily be shown. The principal facts of tho question may very shortly bo stated. And first—na to|the rise which h»a occurred. The prices of twj loadiDg wholesale qualities, comparo now m fellows with what ihey were a year ago :— Nov. Nov. , Biso s 187G 1705 Amount. Per s. d. s. d. s. d. cent. Manilla, muscovado, , percivt 210 15 3 0 3 40 Mauritius, 15 to 17.. 33 0 25 3 8 3 is And the greater part or tho rise bus taken place within a very short period. Since last August the change in price has boen :— Present Prico , —Riso— N price, at end Amount. Per of Aug. cent, s d. s. d. s. d. Manilla, muscovado, perewt 21 0 10 C 5 0 30 Mauritius, 15.t0 17.. 33..0 26 0 7 0 20 Tho change is thus precisely of the kind which occurs in wheat, when there is a Uefic'e icy-even a comparatively moderate one—in tho wheat harvest. There is an enhancement of prico on lho harvest erent of the year bc ; iig known—!ho harvest event this year in the case of sugar being a deficiency in the French crop, though not a great deficiency in the sugar crop generally and this enhancement is just what happened with articles of first necessity. We have certainly not been accustomed to think of sugar in that Ughi, and, in the event of a still more serious riso, the demand would probably not be found so stringent as a similar demand for wlioat in famine times, but the demand is evidently sustained against a rise in the wholesale market, like what has occurred, so that up to a certain point, the parallol between sugar and wheat holds good. The retail prices, wo believe, have not yet risen proportionately, but tho consumption went on steadily Inuretsing when the retail prices of sugar were higher, and there is no sign yet of au anticipated falling oil of demand. As un article of crenoral consumption, sugar does, m fact, now approach more nearly tho importance of wheat than is commonly supposed. As is well-known, more than half our wheat supply is now imported, but tho imports of sugar, oven at the low prices lately current, amount to about two-thirds the value of our imports of wheat and wheat flour. During the last two years the imports of the two articles have been :— , . , Proportion of Imports of vvhe.t i mportg Sugar. Sugar to and wheat flour. v wheat impts. 1874 £30,922,000 £20,010,000 05 per cent. 1875 32,350,080 21548,000 07 per cent.

Thus nenrly does the sugar importation approach that of wiieat, «yen in years of 1 irga wheat import. Allowing that our home wheat supply equals our imports from abroad—and it does not quite equal them—we should still have the consumption of sugar st -tiding at about, a third in value of the consumption of wheat, so much has the use of sugar entered into our national habits. To put the matter in a popular form, the consumption of sugar now amounts annually to 031bs. per head of tho population of the United Kingdom, or to more than lib. pe- head weekly. This growth of the sugar trade has also been very recent. If we go back a quarter of a century, uz ,to the year 1850, we find that the consumption was then •only about 251bs. per head, so that in 25 years the use of sugar has more than doubled, nnd of course, as population has increased meanwhile, i.he quantities imported and retained for home consumption have far more than do'bled, the increase being from 6,091,000 cwts. in 1850, to 18,153,00) owts. in 1875, or 200 per cent. What is still more important for our present purpose, as connecting the growth of the sugar trade with the recent reductions of duty in this country, and the simultaneous increase of the French duties, is the expansion of the figures since 1839. In tho following year Mr L we commenced the series of great reductions in the sugar duty which ended with its final repeal in 1874. under tha present administration of Sir Stafford Nortlicote. In the same year occurred tho outbreak of the Franco-German war, which led s i soon after to the general wising of Fre»ch taxes, including the duties on sugar. And since 1869 the following changes have occurred in sugar :— The consumption lias increased from 42 5a lbs. per head to 02.85 lbs. per head, or 48 per cent. Tho aggregate imports of rawsuj'ar hive increased from 11,034,000 cwts. to 16,205,000 cwts., or 47 p.-r cent.

Tho aggregate import 3 of refined sugar h&ve increnacd from 1,000,000 civta. to 2,801,000 cwts., or 160 j or tent. The great expansion of our sugar trade—that great increase in it which makes it approximate in import mice to articles of necessity like wheat—has thus occ.irred wit'iin the last six j ears. Of the whole increase of consumption since 1850, mnre than one-half has taken place since 1869 Hence the necessity of looking on sugar in a different way from what was the case formerly, when it wns an expensive article of luxury, and o' comparatively limited use. The immediate result of the rise may be beneficial to trade in many ways. A great stimulus is given to tho trade of the wholesale merchant and of the producers of sugar, and such a stimulus, after years of depression in our foreign trade, may prove most important. It will bring money into the hands of an active class, which has beon debarred from cnterpri'e by a prolonged succession of years of low profit or of loss, iauliicr3iffiLalf eadv'eveiT reason to; be satisfied with the great reductions and, finally, the total abolition of tho sugar duties, and, in the end, we ara convinced the benefits to producers, shipowners, merchants, and manufacturers will correspond. [Since the date of tho foregoing article, it has boon announced in the Press that telegraphic advices have been received from London of a further riae, amounting on some linos to about £5 per ton.]