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Show SUGAR TO GO LOWER Sugar Stocks not yet a buy says Babson Wellesley Hills, Mass. Oct. 19, 1)23. "Sugar consumption, which lias increased every year for the last five years, is about to decline," according to Eogcr W. Babson. "The per capita consumption consump-tion of sugar in the United States was 85 pounds in 1923," says the statistician in a statement state-ment issued today. "Iu 1919 it had been reduced to 83, only to rise to 91 pounds in 1920. In 1921 the figure reached 97 while last year we jumped to 102 pounds per capita the: Ingest sugar consumption in history. This year the figure will tend to decline. "Sugar had been a staple commodity, fluctuating within a rather narrow price range; thajt is, until the war upset tilings. During the last four years prices have travelled a rough, unsteady path. From the fixed price of 9c at the end of 1919 prices shot up to 23c a level 300 per cent above prewar pre-war quotations. Then came the break and the toboggan slide to a low of 5c in December Decem-ber 1921. Since then there has been a steady recovery to a peak of over 11c reached this year. Again the reaction set m and prices sottened to a level at about 7M;c. In recent weeks there has been a reoccurrence of the bullish tendency and prices are again close to the year's peak. The fundamental situation, however, both in the sugar industry and in general business would indicate that the upswing is about over and that prices are about to turn toward to-ward a more popular level. "Consumers of sugar should not stock up heavily, today, but should, buy supplies as needed. Prices should be lower by the end of the year. "The securities of the sugar companies have also travelled a spectacular course. Sugar stocks, like one or two other groups, notably coppers, move in close conformity with the price trend of their commodity. When the commodity is rising the stocks are rising and vice versa. In a sense, therefore, sugar stocks do not discount the future as much as other groups, but are governed by I the same conditions that affect the commodity, climate, production pro-duction and demand. "The stock market in general gene-ral touched its peak in November, Novem-ber, 1919, and declined with only occasional interruptions all thru 1920. Sugar stocks touched a peak in November, 1919, declined in the spring of 1920 and then soared to a level 12 percent higher than their previous top. From that poini they - declined almost without interruptions, finally reaching a low in October, 1921, under the pre-war average. During this same period the tendency jpf the general market had been downward but the movement j was of an entirely different ; character; that is, a low was ' registered in 1920 and a sizeable size-able rally Avitnessed from that level with another low in June, 1921, slightly under the first j point. By October, at the ! time the sugars were making their low, the general market J had made considerable pro- j gress in its long swing upward, i which continued all thru 1922 and reached a peak last March. ; "The recent action of the sugar stocks has been likewise somewhat out of conformity with the movements of the general gen-eral list. They reached a peak in the fall of 1922 and declined with the rest of the rest of the market, rallying in March to a new high above the peak touched in October. This movement had its basis in a sharp rise in the price of sugar and a supposed 'shortage.' While it was going on many people had visions of a repeti tion of conditions that prevailed pre-vailed in 1920 when there was an actual shortage of the commodity com-modity and sugar stocks skyrocketed. sky-rocketed. The strength, however, how-ever, at this time was shortlived short-lived and sugar went down with the market. There has been a recent strengthening movement based upon the late seasonal rise in the commodity to satisfy canning requirements. require-ments. "The long swing outlook suggests no extremely bearish or positively bullish factors. The wind-up of the current season will undoubtedly mean a balance on the right side of the ledger for all of the important import-ant sugar properties. Some of them may perhaps see fit to follow the lead of Cuban-American Sugar, which recently resumed re-sumed dividend payments. With the end of the crop year and a somewhat lower level for the commodity, however, sugar stocks may be reactionary, but the downward movement, if any, is unlikely to result in much lower levels than we have seen during the current year. Some time in 192-4 it is probable that sugar stocks will be attractive as a speculative I purchase. " |