:M T H E CU B a rev IE W 



Price of Sugar 



It is an acknowledged fact that the price of sugar, like all other world-wide staple 

 commodities, is governed by the well known law of supply and demand. In the belief 

 that it may be of interest to some of our readers, this article on the application of this 

 law as relating to the rapid increase in the price of sugar during the first three months of 

 1923, is written. 



In the first place, let us consider how this law applies and in just what way 

 it has governed the increase in the price of sugar, and with this objective in mind it 

 will be a comparatively easy matter to show that the rapid increase in the price of 

 sugar was not actually due to any correspondingly rapid change in the estimated world 

 supply as compared with the anticipated demand, but the rapid increase in price is 

 attributable to the realization on the part of the majority of those interested in 

 dealing in sugar that the world-wide consumption was increasing at such unprecedented 

 leaps and bounds as to make all immediate available supplies inadequate to meet these 

 demands. 



The readers of this periodical are familiar with the source of sugar supply throughout 

 the world, and therefore, no detailed comment is necessary here, but it might be well 

 to point out the fact that in the United States alone the per capita consumption during 

 the year 1922 was found by statisticians to be 35.4 per cent greater than it was in 1914. 

 It was, therefore, natural to believe that this rate of consumption would continue to 

 increase, particularly in view of the general increase in prosperity and population 

 throughout the United States, which naturally would reflect itself in an increased 

 demand for sugar. 



Furthermore, all those interested in this business had recently witnessed the ease 

 with which the large Cuban crop of 1922 had been absorbed between the United 

 States and foreign markets, together with the overplus of the preceding crop of 

 something in excess of 1,000,000 tons. With these facts before them optimism was 

 soon established in their minds with respect to the disposition of the present Cuban 

 crop with ease and at a price more commensurate with their costs and higher than 

 that which the public was willing to allow them at the beginning of the preceding year, 

 when all warehouses were full of sugar and the planters and dealers in sugar were 

 laboring under unprecedented difficulties in meeting their financial obligations and rehabil- 

 itating themselves in their business, following their previous disastrous experiences. 



The United Kingdom and Europe were so pressing in their demands for Cuban 

 sugar, and the American refineries required such a large proportion in order 

 to meet domestic needs that, for the first time in the history of the production on 

 the Island of Cuba, there were practically no sugars during the first four months of 

 this year, known among the trade as distressed sugars; that is, sugars pressing on the 

 market for sale with no buyers. This automatically gave rise to a continual increase 

 in the price of sugar as the season advanced, because of the fact that some refiners 

 who were in the habit of relying on distressed sugars to meet a part of their needs 

 were finally forced into the market to buy at the seller's price. 



The price of refined sugar to the consumer was further augmented by the fact 

 that the refiners required a larger margin in order to offset their increased refinery 

 charges, arising out of labor shortage in the United States, which not only caused an 

 increase in the actual cost of refining sugar, but this was further added to by increased 

 cost of packages, handling charges of the finished article, and increased delivery charges. 



In conclusion, the factors above mentioned, viz., supply and demand, consumption 

 increase, realization of shortage, increased operating and handling charges, are bound 

 to increase the cost of any commodity, the same as its price is decreased when the 

 reverse conditions prevail. 



