COMMODITIES: The Sugar Situation

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Much of the U.S. last week was close to a sugar famine. The American Sugar Refining Co., biggest U.S. cane refiner, feared that all of its plants would run out of raw sugar in two weeks.

In a last-minute effort to stave off a shortage worse than any of the war, the Office of Economic Stabilization boosted the sugar price, first time in five years. Next week, wholesalers will get an increase of .5¢ a lb.; the housewife will have to pay .7¢ more per lb. The increase will go directly into the pockets of Cuba's sugar-growers. For entirely proper reasons, they had refused to ship any sugar this year at the 1945 price of $3.10 per 100 lbs. f.o.b. Cuba.

The Commodity Credit Corp. offered to raise the price to $3.67½, for the 1946 crop. This was satisfactory to Cuba, but Congress so far had not given the CCC authority to pay a subsidy to absorb the increase. The retail price boost was the only solution.

But there is still no guarantee that the U.S. will get all the sugar it needs. Cuba is dickering to sell sugar to Britain and Latin American countries at more than the $3.67½ the U.S. will pay.

What Cuba really wants to force out of the U.S. is an agreement to buy 50% of U.S. sugar imports from Cuba for the next ten years. And Cuba cannot be blamed for wanting that. She knows that if she does not cash in on a long-term deal now, when there is a world sugar shortage, she will lose out. Before many years the shortage may turn into a glut and sugar may drop to 1.8¢ a pound, as it did after World War I.

The U.S., mindful of sugar production in Hawaii, Puerto Rico—and the potent domestic sugar beet lobby—has balked at giving Cuba a good break. The U.S., too, has a point. It insists that Cuba not capitalize on the war, that its quota remain fixed at the prewar 29%.

If the deadlock is broken, the worst of the U.S. sugar shortage may end this year. If it is not, the housewife will find her sugar bowl empty.