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Show Summary of Sugar Situation Set Forth By Financial Experts Sugar market conditions as effected ef-fected by both the Cuban cane and American beet sugar crops are dis-. dis-. uased in the weekly market letter of Haydcn, Stone Co.. of New York and Lioston, with the optimistic vlewj that considerable of the unsold sugars j may be rapidly absorbed after the first of the year, especially with demand for several hundred thousand tons oil sugear from Europe Tho report, shows that practically nil of the Cu-. ban crop, excepting 10 per cent, has! been marketed and that only 15 per! cent -f the American beet crop has been sold, it being estimated that this1 '.eaves 1,250,000 tons or abou' three; months' consumption unmarketed. Fear that the 1920-21 "losses ofl .-Vmorican beet are likelv to be severe enough so that i; wjl be some c-ars before we again have a 95", 000-ton j I.e. crop on American soil'' Is expressed. ex-pressed. The review follows In full: WH AT RE1 ll .W s s in ail ihe uncertainty which Rur-, rounds the immediate future of the. sugar industry a few facts stand out Clearly. It may be helpful at this time to elaborate some of these determinable de-terminable factors. For one thing tho decline In raw sugar a decline which has proceeded proceed-ed to much more drastic lengths than was generally considered probable has carried the price down below th cos! of production. It is very doubtful doubt-ful If more than a very few Cuban mills could prodtiCS their 1921 crop at B selling price of cents per pound and avoid a loss. Therefore,! were recent prices to prevail during th.- . oming t top season it would mean a vear of loss lo the great majority Of Cubaii producers. The some statement state-ment ig broadly true of Porto Rico. of Louisiana and the various American Ameri-can beet companies. It is, o" course, .possible that sugar,, an agricultural crop, during this perl-I ! od of cataclysmic commodity price J readjustment will have to be produced; for a season on a non-profitable orj positively unprofitable basis. The ; mere fact that any commodity has declined below its cost of production, ; docs not, prove that the price will ln- , MAlluj Oi n.ii.'..iiLi...u.... , gvv V , I a cost price level. It is a funda- ! mental axiom of political economv that goods cannot be long created as; 'less than the cost of production. But there Is no rule of thumb bv which the exact length of time during which ; goods may be produced at a loss ' can be determined. j The sugar equilibrium of the world has been profoundly disturbed and the, I restoration of equilibrium Is a per-1 plexlng economic problem. COSTLY EXPERIEX4 i The Cuban sugar Industry never suffered from a moro costly expert-I expert-I enee than the spectacular advance in raw sugar prices to a high mark of i 23 cents per pound When raw sugar ' got1 ibovo 15 cents per pound it got Into tho danger zone In the sense that ; the continuance of such prices opened tho flood gates to an avalanche of ; sugar Into the I'nited States from every corner of tho sugar producing' world. This natural tendency was power-! fully aided and abetted by the posl-j i tlvo action of tho refiners In going after heavy tonnage of oriental sugars.; 1 It was thcae sugars which finally overloaded the market and created' b wide open break in sugar price I ir.i has cost every factor in the sugar Industry with one exception, the loss I Of some hundreds of millions of dol-, ! lars. The one exception lo which wo just, i referred is the Cuban sugar com- ' panles. They have been in the unique i ; position all through tho past few 'months of demoralization of havinE,' : no Inventory losses to adjust. Thanks lo the fact of an unusually early clos- I ing season because of drought 90 ! per cent of tho Cuban crop was produced pro-duced end sold before the price slump' j was well developed. Tho other 10 1 ; per cent of unsold Cuban sugars could I have been marketed except for the. I greed of speculators who were holding I I for higher prices. Broadly speaking, 50 per cent of the Cuban crop Is produced by com-i com-i panics controlled by American capi tal, while 50 per cent is produced by Cuban controlled properties. The' American companies practically wi'.h-i j oui exception cleaned up their 1920 crop a;l ie free of sugar when ' the August price decline started. I This is, perhaps, the most encour-1 aging fSitture of the present sugar situation from the standpoint of the! Cuban companies. The American! 1 owned Cuban companies have no 1920! Inventory' losses to absorb. They enter en-ter the 1921 crop year with clean j hands ami generally speaking with S year of record earning behind thern. There is also the possibility that the price readjustment will be! completed in time to permit them' , !o get ihe benefit of stabilization be-: fore the 1921 crop year is over. I BLTJEF SUFFERJERfi At present the chief sufferers from , , the sugar situation in the United States; are the refiners and the beet com-i ' panies The 1920 beet crop promises' I to run between 925.000 and 950,000 tong, a 40 per cent increase over j 1919. In fact, this Increase in beets 1 nearly offsets the drought shortage In) t Cuba. The beet companies have sold ' loss than 15 per cent of this year! ; crop and will, apparently, carry over Into 1921 700.000 to 800,000 tons ot unsold sugar. Other unsold sugars, including the remaining portion of the Cuban crop are sufficient to bring the carryover of sugar in American markets into l'J2 1 to a total of J.2.".').-000 J.2.".').-000 tons, which Is about three months' consumption. This big bulk of sugar Is bound to act as a price depressant until largely absorbed Happily there are solid grounds for the hope ihat Europe mans demand several hundred thousand tons of raw or refine. 1 sugar during the first quarter of next ear. Such buying is logical to expect If England and France ro to continue to consume sugar because the United States is today ihe lowest priced BUgn'l market in the world. There is, of course, every incentive for the Cuban producers to start this year as late as possible, on December Decem-ber 20. 1919, 90 centrals were grinding. grind-ing. On the same date this year only 11 tverr nrnahlni' nunc 1 f . . n . at this time receipts of new crop , sugars were 33. -KM tons for the week,! this year. 76-U tons. Furthermore,! financial conditions In Cuba are so' severo that Cuban properties will find difficulty In borrowing and some, of tho weaker producers may not be I able lo stait until un usually late. Some authorities estimate the 1921 Cuban crop at not over 3,000,000 tons.' compared with 3.748,177 tons this year and 3,971,776 tons in 1919. Anv-thing Anv-thing like a 750,000 ton drop in Cuban! output would have a profound effect1 upon sugar priced sometime during' 1.931. Our purpose in thus outlining the present sugar situation is to try lo show that It Is altogether too early yet to assume that the Cuban sugar companies face a hppeless outlook in 1921. The American market will be overloaded with sugars for somi months, but if Cuban production irops 500.000 to 750.000 tons and the decline de-cline falls on the Cuban owned properties, prop-erties, then the American capital in Cuba may fare satisfactorily next year. Furthermore, the 1920-21 losses of American beet are likely to bo severe enough so that it will be some years before we again have a 950.000 ton beet crop on American soil. , in |