MONEY IN SUGAR.

Star (Christchurch), Volume LXVI, Issue 20312, 23 May 1934, Page 13

MONEY IN SUGAR.

C.S.R. Net Profits Show Increase. PROTECTIVE TARIFF POLICY. (Special to the “Star.") SYDNEY, May 15. At the half-yearly meeting of the Colonial Sugar Refining Company a very satisfactory state of affairs was disclosed. The net profit for the half-year ended March 31 was shown to be about £500,000, as against about £470,000 for the previous six months, and about £420,000 for the corresponding period in 1932-33. The directors are thus able to declare a dividend, with bonus, amounting to 12£ per cent per annum, while carrying an additional £IOO,OOO to reserve fund, which now stands at nearly £1,400,000. The capital of the company is close on £6,000,000, so that the reserves are not inordinately large. But these figures show that, taking everything into consideration, and more especially in view of depressed industrial and commercial conditions, the Colonial Sugar Refining Company has had a distinctly prosperous year. The publication of the C.S.R. returns usually causes a certain amount of controversy here, and these last figures are no exception to the general rule. To those who still cling to the ideal of free trade, the Very substantial protection that the sugar industry receives in Australia represents the worst form of “State interference,” resulting in the establishment of a great monopoly for the benefit of a few producers at the expense of the whole btxly of consumers. However, the supporters” of the C.S.R. and the policy that upholds it are not content to rest their case on ' fiscal arguments alone. They maintain that the establishment of the sugar industry, manned by white labour, is an important factor in the “White Australia” policy, and that the protection extended to it has made possible the peopling of the northern sub-tropical areas, the development of a white population able to defend the country on its most vulnerable side, and the building up of a great industry which already gives employment to a large amount of Australian labour. Consumers and Prices. There are several newspapers in Australia which at regular intervals publish articles defending the C.S.R. on these lines, and urging the people if they want to keep Australia “white,” to support the sugar industry on the basis on which it is now maintained. But in the case of ail industries that have grown up under protection, there is always a suspicion in the public mind that the consumer is being fleeced by the producer, and the C.S.R. has had to face a great - deal of hostility on that score. Those who are inclined to take this view of the case would be well advised to consider carefully the evidence submitted at Canberra” this week to the Commonwealth Grants Commission by Mr. A. Townsend, the sugar expert attached to the Federal Customs Department. Mr. Townsend pointed out that the excess cost of producing sugar in Australia, based on the free trade world parity price, is estimated at about £6,000,000 a year. As a result the price of raw sugar in Australia is nearly £23 18/0 per ton, while the export price, enabling competition abroad, is £8 0/0 per ton. These figures naturally suggest that the Australian consumer must bo paying a comparatively high price for the sugar that he needs. But Mr. Townsend quoted figures to show that “few countries have a retail price much less than the Australian price of 4d per lb”; and the average price of refined sugar throughout Europe was recently 3sd per lb. The argument against the protection of the sugar industry on the ground of excessive cost to the consumer thus appears to break down. Benefit in Other States. Further, Mr. Townsend pointed out that New South Wales cane sugar growers and Victorian beet sugar growers share the benefit of the sugar embargo with the Queensland planters. As to the supposed ill-effect upon trades requiring sugar in large quantities, he argued that the embargo has not interfered with the export of dried fruits or other goods containing sugar, because “Australian sugar lias always been supplied for such goods at the landed price, duty free, of the cheapest sugar in the world. Referring to an argument based on the recent attempts to find an entry for Australian exports into the Eastern markets, Mr. Townsend said that our prospects of doing much in this way with Java are not very encouraging. For in Java SO per cent of the people have an income of less than 1/ per day and their pur chasing power cannot seriously affect the selling price of sugar or any other Australian commodity. The case for the sugar embargo it thus much stronger than its opponents are prepared to admit, and Mr. Townsend’s conclusion—that the C.S.R. is not making excessive profits, “as its .total profit in Australia is only one-twelfth of a penny per lb’* —may be commended to the attention of those critics who are fond of likening the C.S.R. to an octopus.