266
2
supply of the demand with Formosan and home products. Not only will the industry certainly reach this end, as we shall soon show, but it will further succeed in creating an export, chiefly of course to China and Korea,
Protected by the duty, the Formosan Centrifugal Sugar Factories which now consist, or will soon consist, of nineteen companies, will be enabled to form a selling syndicate which will make it its business to offer to Japanese consumers only the quantity directly required for use, and thus to keep the price high. Even in this present year, the Formosan Government itself (because as yet there exists no syndicate but it is only being formed) undertook to sell to the Japanese refineries as "raw material" for refining all the centrifugal sugar which could not be taken for direct use. This amount of "raw material" will in the coming years constantly increase, until the imported Java sugar hitherto elaborated in the refineries will no longer be used. The selling syndicate now being formed will then (according to the example given this year by the Government) distribute to the various factories according to their production the quantities for (1) direct consumption in Japan; (2) raw material" to be elaborated in Japanese refineries; and (3) for the export, which will begin from
1911-12.
The prices for the sugar No. 1 used directly in Japan at present yield good profits to the factories. The prices for the "raw material" will depend on the arrangements to be made between the factories in Formosa and the refineries in Japan. If it comes to pass, as is already reported in the Japanese press, that the refineries will not receive Jany further rebate on the raw material, whereas at present, of the tax of 2-25 yen, they b. receive a rebate of 195 yen (the consumption tax not being paid on "raw material" but only on the refined), then the price of Java sugar will no longer need to form the basis for a price agreement between the Formosan factories and the refineries in Japan, How, consequently, the Formosan factories will in the future manage with the No, 2 sugar (raw material") cannot at present be foretold. With the No. 3 export sugar, the price of Formosa centrifugal sugar will, of course, adapt itself to the Eastern market, especially Java. The Formosa sugar industry will, however, hardly need export bounties. It will serve the purposes of the business with regard to the sugar sold and used in Japan if its export is carried on even without profit in view of the great and well-rounded businesses and to avoid a lowering of the prices through over- supply in Japan itself. The export duty from Formosa to foreign countries of 45 sen per 100 kin has been recently abolished by the Government, which will be the more welcome as, according to the latest news, the world market shows a falling tendency in consequence of a heavy crop of sugar-beets in Europe. It may also be that this quantity destined for export will first be refined in Japan and then sent abroad to China and Corea. Anyhow, the Java product and Hong Kong refineries will soon enough feel the unpleasantness of Formosan competition in China.
The subsidising policy of the Government in any case weighs hard on the Japanese consumers. The setting apart of districts with the monopoly right to buy sugar-cane, which is certainly an infringement of the property rights of the sugar-cane growers, should also be mentioned. This infringement has made it possible for the companies to enter into the business with great installations from the first so that at the present day hardly any other sugar country can show such a number of first-class factories with narrow gauge railway as Formosa. It should not be forgotten that the introduction of the Hawaiian sugar-cane into Formosa was a benefit to the local industry, but that, quite apart from favouring by the Government, the country had been for generations considered good sugar country and had exported sugar. Brown sugar of the old style has been a Formosan export for generations. The export business ceased only when Japan, in consequence of her protective policy, was in a position to take over the whole output. Brown Formosan sugar of the old style will, perhaps, have to be exported again from 1911, and centrifugal sugar probably from 1912; there is, however, talk of an experimental attempt at exporting it in 1911.
The consumption of sugar in Japan amounts at present to about 500,000,000 kin, which is classified as follows:-
Under No. 8 (Dutch standard)
No. 15 (
No. 20 (
ور
Over No. 20 (
25
Total
IMPORT 1909.
Kin. 42,999,100
161,087,800
2,871,700
17,242,100
224,150,700
1909 Formosa sugar-
(4.) Centrifugal
(b.) Brown
Loochoo, Kyushu, Shikoku, &c. 1910 Formosa sugar--
(a) Centrifugal
(8.) Brown..
་་
Loochoo, Kyushu, Shikoku, &c.
1911 Formosa sugar---
(a.) Centrifugal
(b) Brown..
3
HOME PRODUCT,
Loochoo, Kyushu, Shikoku, &c.
:::
:::
Kia. 130,000,000
80,000,000 80,000,000
180,000,000
120,000,000
100,000,000
300,000,000
130,000,000
100,000,000
While the increase in the use of sugar in Japan is only very slow, in consequence of the continual increase in price, the production of Formosa sugar has been increasing more rapidly from year to year. Since 1904-5 it has more than tripled. For this reason Japan will from as soon as 1912 no longer need to import any foreign sugar, but can even begin to export. It is confidentially calculated that the production of centrifugal sugar in Formosa will amount to about 300,000,000 kin in 1911 to about 450,000,000 kin in 1912. If the Formosa sugar planters were to work at high pressure they could produce even greater quantities than the statistical estimates at present prophesy.
When the Formosan centrifugal sugar is exported Chinese and Coreans will be able to buy Formosa sugar cheaper than the Japanese taxpayers can, owing to the protective tariff and the facilities for sale given to the syndicate. This is, however, the natural consequence of all subsidising and protection such as has been employed in Japan to favour an excessively quick development of an industry. However, it is reported in Government circles in Tokyo of giving up the subsidising of the Formosa sugar industry from 1911 (ie., from the introduction of the new tariff) and of leaving it to stand on its own legs. The Government has itself fixed maximum and minimum prices for the purchase of sugar-cane. At present the planters, in consequence of the prices of sugar in Japan, obtain the maximum price. If the Government ceases the subsidies the factories will pay the planters only the minimum price and compensate themselves for their loss by this difference, which is about as large as the present rebate of 1 yen per 100 kin.
The following tables show the present condition of the taxation of sugar in Japan by tariff and consumption tax :-
I under No. 8 (Dutch standard)
No. 15 (
Class
II
??
)
III
*
No. 20 (
73
35
IV over No. 20 (
多少
Under No. 11-
Dark brown, in casks Other
Under No. 15
No. 18
No. 21
Over No. 21
Candy, cube sugar, loaf sugar
TARIF.
CONSUMPTION TAX.
::::
::::
Yeu. 1.65
2-25 0.74.8* 0-82·7*
14
Yen.
2.00
3.00
5·00
7:00
5*}}
9.00
10.00
The new tariff, which will come into force in July 1911, provides the following
taxation:-
Under No. 11-
Dark brown, in casks
Other
Under No. 13
No. 18
"
No. 21
Over No. 21
Candy, cube, and loaf
*
Treaty tariff.
† Brown sugar of old style according to colour.
Yen.
2·50†
2·50+
3.10
3.35
4.25
4.60
7.40
† Under this comes centrifugal sugar if it is sent as "raw material" to Japanese refineries.
[1825 e-
-1]
{
B 2
TIS