Fermenting Sugar

After four weeks of stormy haggling, the Cubans had gone home emptyhanded. The mission of sugar-growers and mill-owners had come to Washington in August to negotiate a new U.S. contract for their five-million-ton 1945 sugar crop. Their objective: to get the U.S. to jack up its offer 1/2 a lb. higher than the wartime sugar price established in 1941--2.65-c- a lb. Cubans say their production costs have soared 100% or more since war began; they can no longer afford to sell virtually their entire crop to the U.S. at the old price. But the Commodity Credit Corp., which does all U.S. sugar buying, refused to go higher than 2.75-c-.

In both countries the sugar issue was mixed with political dynamite. The Cuban delegation appointed by Batista had been firmly instructed by the politically potent sugar interests to accept nothing less than 3.25-c- a Ib. But the CCC, with the powerful U.S. sugar lobby leering over its shoulder, could not offer the Cubans a higher price unless they gave domestic U.S. sugar-growers a price increase. Further, the action might set a precedent: Brazil would want more for its coffee, and other nations, chafing under U.S. ceiling prices on their products, might balk at contracting ahead.

The breakdown in negotiations meant that Cuba's President-elect, Dr. Ramon Grau San Martin, must choose between sending back Batista's hagglers or appointing a new mission instructed to accept the U.S. offer. Then he would face the angry sugar-growers.

But by the next meeting the Cuban sugar-growers may be even less interested in the U.S. price, for the growers' bargaining powers in both Cuba and the U.S. will become greater as the war runs down. World stocks of sugar are low: demand exceeds supply. In the U.S. last week, distributors' stocks of sugar were down to 680,706 tons v. 1.2 million a year ago. Grocers in the Midwest were hanging out "no sugar" signs. Soon European buyers may re-enter the market, flood Havana with huge orders in competition with the U.S., and bid sugar prices far higher than the CCC offer.

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