36 



THE CUBA REVIEW 



THE SUGAR INDUSTRY 



SUGAR DEMAND AND SUPPLY. 



Tlie history of a noteworthy advance and 

 dechne in the price of sugar, and the reasons 

 therefore as given by Messrs. Willett & Gray, 

 make most interesting reading. They say: 



"The recent episode of the remarkable rise 

 in the price of sugar from 2.28c per lb. to 5 J^c. 

 per lb. in bond, from August 1st to 13th, and 

 the equally remarkable decline from 53^c 

 August 13th to 2.44c November 2d, will long 

 be quoted and used in various instances as the 

 most instructive proof of the proposition that 

 "supply and demand control and make 

 prices." 



The supply and demand conditions on 

 August 1st made the price 2.28c, and the 

 supply and demand conditions on November 

 2d also made the price of 2.44c per lb. As 

 developed later, there was at no time between 

 August 1st and November 2d any important 

 change in the actual supply conditions that 

 should have called for the advance in prices 

 that was made. The visible supplies of sugar 

 were so large at the beginning of the last 

 sugar campaign as to bring the price of sugar 

 down to or below the cost of production. 



The price had recovered slightly to 2.28c 

 August 1st, the supplies had not been drawn 

 upon to any unusual extent, and the 2.28c 

 price was than a normal value on the supply 

 and demand basis. 



Between August 1st and November 2d the 

 visible supphes had been drawn upon to some 

 further extent, but still sufficient supplies 



remained to meet the demands as to warrant 

 the 2.44c. value again. 



What caused the intermediate rise in price 

 of over 100 per cent? It was simply the 

 mistaken sudden conviction that took posses- 

 sion of Great Britain and the United States 

 that because of the cutting off of European 

 beet sugar supplies the cane sugar supplies 

 would be insufficient for the demands of the 

 two countries. 



Immediate action to possess the supplies at 

 any cost soon developed the unchanged facts 

 that supplies were easily secured and were 

 abundant for all demands. 



The mistaken conviction ended in Great 

 Britain when the British Government had 

 easily secured about a million tons cane 

 sugar from various countries by the first of 

 September, and ended in the United States 

 soon after, since which time the market price 

 has been settling itself back to the normal 

 supply and demand basis, with some 300,000 

 tons surplus supplies of sugar left over in the 

 United States and Cuba for another season. 



The result is to impress more forcibly than 

 ever the fact that actual supply and demand 

 make the price when the markets are not 

 influenced by other temporary circumstances. 



If not confining this article to the one point 

 of "supply and demand," we might draw a' 

 lesson from the fortunate gains and unfor- 

 tunate losses resulting from acting on a sud- 

 den mistaken understanding of the supplies 

 and demand based upon any other stand- 

 point than actual statistical information." 



Jucaro and Moron Railroad Wharf at Jucaro. 



