Something about sugar : $b Its history, growth, manufacture and distributionRolph, George M. (George Morrison)
History
Something about sugar : $b Its history, growth, manufacture and distribution
Rolph, George M. (George Morrison)
Sugar
In Russia the government fixes the amount of sugar required each year for
domestic consumption and this quantity may be sold by the manufacturer.
Then it determines what quantity shall be kept in reserve, to be sold
when the price exceeds that named by the government commission (4.30
rubles[25] per pood[26] in winter, or 4.45 rubles in summer). Should the
production exceed the amounts fixed for domestic consumption and reserve,
exportation is permitted and the exporter gets back the excise, 1.75
rubles per pood, or if he elects to sell this excess at home, he may do
so by paying double tax, or 3.50 rubles per pood. Of the alternatives,
exporting the surplus is the more advantageous to the owner of the sugar,
as the fixed price for domestic sugar is a profitable one. He therefore
can afford to take a loss on the sugar he sells for export and still
make money on the total operation. The stipulation that the contingent
interest in the profitable home market shall keep pace with the growth
of the output of the factory is also a substantial encouragement to
manufacturers to increase their production. Regulations like these
naturally have the effect of supplying foreign markets with cheap sugar.
The manufacturer makes an excellent profit and the domestic consumer pays
the entire bill.
Primarily, the intent may have been to keep the price of domestic sugar
at one level and to enable the manufacturer to fill the home demand
without having to go outside the country for his raw-sugar supply. But
the plan in its actual working fosters exportation at the expense of the
home consumer.
While in Russia the cartel was a government measure, the pooling of
interests by German and Austrian manufacturers in their respective
countries accomplished the same end. A cartel formed in Russia in 1890
came to grief after four years through the individual greed of its
members. In 1898 a new combination of raw-sugar producers and refiners
was formed, with the express proviso that the manufacturers of raws were
to sell their product only to refiners who were members of the cartel.
The domestic trade in white sugar was prorated among the refiners, in
consideration of which they had to allow the producer a fixed price of
30 kronen ($6.08) per 100 kilograms (220.4622 lbs.) for raw sugar, the
market price of which was paid by the buyer and the difference by the
cartel, which got the money by notching up the price of domestic refined
sugar.
With the cartel the only seller of refined, and sugar from foreign
countries shut out by the high surtax (the difference between the impost
on imported and domestic sugars), the consumer had to pay the price
demanded by the cartel as long as the difference between the world’s
price and that established by the cartel was less than the surtax.
Public-domain text, read in full here on John Shaqi.
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