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Title: About sugar buying for Jobbers
How you can lessen business risks by trading in refined sugar futures
Author: B. W. Dyer
Release Date: September 5, 2009 [EBook #29915]
Language: English
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about
SUGAR BUYING
for Jobbers
_How you can lessen
business risks by trading in
Refined Sugar Futures_
_by_
B. W. DYER
A BOOKLET
FOR JOBBERS WHO
SELL SUGAR
_Lamborn & Company_
SUGAR HEADQUARTERS
132 FRONT STREET · NEW YORK
Copyright, 1921
LAMBORN & COMPANY
About Sugar Buying
Jobbers who have had considerable experience in exchange operations
will find in this booklet a simplified and non-technical description of
activities with which they may be in general familiar.
We believe, however, that the inauguration of trading in refined sugar
futures on the New York Coffee and Sugar Exchange, Inc., throws open a
new realm of opportunity.
We have attempted to outline briefly the chief advantages to be gained
by a jobber's use of this new market, assuming that those who have in
the past dealt in raw sugar as a protection for their refined sugar
needs will welcome suggestions as to the benefits to be derived from
trading directly in refined sugar.
Time, the Croupier of Business
Like a croupier at a vast roulette table, Time presides over the realm
of business.
Time is the tap-root of most business uncertainties.
No one can tell what will happen a year, a month, a day, a minute from
now--the future may bring floods and wars, pestilence and drouth; or it
may bring great crops and fair weather, happiness and prosperity.
As business has become more and more complicated, the time element has
become larger and larger. The time element as we know it does not exist
in simple barter--a man weaves a piece of cloth and exchanges it for a
bushel of corn: time is of no account in the transaction. A small
jobber located in the same territory as refiners buys a small amount of
sugar today and distributes it to his trade the next--time is
negligible. A large jobber, buying perhaps for several branch houses,
or located at points which necessitate a delay of two or three weeks in
transit, may find it necessary even on a declining market to purchase a
considerable amount of sugar, and, as a result, weeks may go by before
his sugar arrives and is sold--time is vitally important.
Time is an element in costs and prices, because over any extended
period of time many things may happen to influence costs and prices.
All business planning must deal with Time.
To the unenlightened business man, Time is a bugaboo--a gambler whose
cards are stacked and against whom there is no defense. Such a man
conducts his business from hand to mouth, in constant fear. He is a
fatalist, taking his profits and losses as if they were gifts or blows
of Fortune.
The enlightened man works with Time as an impartial, exacting,
inevitable power for his own good or ill. He shapes his actions and
enlists the services of Time to prevent catastrophe on the one hand,
and to enforce prosperity and happiness on the other. Storms may come,
but so far as his mind may control it, he is "the master of his fate."
Cost and Selling Prices
That the element of TIME is important in the jobber's business no one
will deny. He does not base his selling price on cost, but rather on
the market price. Regardless of his cost, he must sell to meet
competition. It is equally obvious that the larger his business, or the
greater his distance from the source of supplies, the more important
part TIME plays in both his cost and selling prices.
All jobbers, large or small, are obliged to assume greater risks (even
proportionately) and exercise greater care, than, for instance,
retailers buying in small quantities. A jobber's business may enlarge
by a perfectly natural process of expansion, but his purchasing risks
increase in greater ratio than his business expands.
Similarly, under abnormal conditions, jobbers located at points
requiring several weeks in transit prior to delivery, must assume
greater risks than those located at the source of supply. In the event
of serious delays in deliveries or in shipments, even buyers located at
shipping points are confronted with this problem, and the difficulties
of those located at a distance are increased immeasurably.
These difficulties tend to accentuate the importance of TIME in modern
business. As business grows, instead of decreasing--risks increase. Any
machinery which might operate to eliminate or reduce this uncertainty
or speculative element in a jobber's business, would, we believe, be
welcomed. Exchanges provide just such machinery.
Other commodities, such as raw sugar, wheat, cotton, pork and coffee
have had this machinery for years and it was provided for refined sugar
on May 2, 1921, when trading in refined sugar futures was inaugurated
on the floor of the New York Coffee and Sugar Exchange, Inc.
Where Buyers and Sellers of Sugar Meet
The Sugar Exchange is a market place, where buyers and sellers of sugar
or their representatives meet to trade.
The Exchange provides a concentration point, where, under any market
conditions, sugar may be bought or sold _at a price_.
What that price is, is determined by how much sugar is for sale and how
many people want it. If the supply is large and buyers are few, the
price will be low. If sugar is scarce and buyers are numerous, the
price will be high. Or, to put it in another way, when there are more
sellers than buyers, the market declines; when more buyers than
sellers, it advances. If the supply and the number of buyers are
normally well balanced, the price will be determined largely by the
cost of production and transportation. If events or circumstances
operate to increase or curtail either the sugar supply or the number of
buyers, and such events or circumstances follow one after the other
alternately, the price will fluctuate.
These are the results of the operation of well-known economic laws.
In the case of all commodities which cannot be bought or sold at a
common market place (or exchange), price fluctuations are usually wide
and frequent, because no large group ever has common knowledge of
supply, demand and other factors that govern prices--purchases and
sales are made direct between individuals, and knowledge of the amount
asked or paid is restricted to a limited few.
Through the common market place provided by an exchange, on the other
hand, market conditions and prices become common knowledge almost
instantly over the entire country. This tends toward stabilization--a
fact which, alone, helps to eliminate risks, and enables merchants to
buy at lower prices than if forced to deal direct with one another.
Sellers do not have to take such long chances and can thus afford to
sell on a smaller margin of profit. Competition is stimulated and freed
from many of its complications and uncertainties to the advantage of
the seller, the buyer and the public.
It is now admitted that, had exchange trading in refined sugar existed
in 1920, a general use of the exchange by all branches of the trade
might have prevented, to a considerable extent, the abnormal advance in
sugar prices of that period, with the hardship and misfortune that
attended.
The fact that an exchange always provides a buyer and a seller, _at a
price_, tends toward keeping business fluid. Jobbers are able to
protect their future requirements. Producers are sure of a market for
their crops. Crop financing is made easier because bankers are more
willing to loan on crops sold in advance--an operation made possible by
an exchange.
Exchanges operate to take the gamble out of business. They help to put
and maintain business on a sound basis. That some people who have no
real interest in the commodity use the exchange speculatively does not
alter this fact.
In providing machinery by which speculative risks incident to a
jobber's business may be shifted from the jobber to those who make a
business of assuming such risks, exchanges help to stabilize his
business and to remove a large part of the destructive uncertainty with
which he would otherwise have to contend.
Exchanges are the creations of modern economic development, designed
and operated for the benefit of the commerce, industry and people of
the civilized world.
Therefore we welcome trading in refined sugar futures and the
opportunity to offer you the advantages that may be derived from a
conservative, intelligent use of its services.
The Exchange provides certain quality standards and other regulations
to safeguard your interests. But your real assurance of protection lies
in the _character_ and reliability of your broker. If your broker is
not strong financially you do not have back of your contract the
responsibility that you might otherwise have.
If you had a favorable contract with a broker who became insolvent, you
would have no means of forcing the fulfillment of the contract, and no
way of securing the profit which was due you. The thing to do, of
course, is to choose a broker who is so strong financially that you
incur no danger in this respect whatsoever.
Use the Exchange when the Market is Favorably out of line
In considering the illustrative examples in this booklet, it should be
borne in mind that the measure of protection afforded is relative and
not absolute. The theory of exchange operations is that the exchange
market will move relatively the same as the market for the actual
commodity.
This cannot be strictly true, although the exchange market must of
necessity follow very closely the actual market, because all the sugar
must, in the final analysis, come from the actual market. If thrown out
of parity with the actual market, the exchange market is bound to come
back eventually.
In the exchange market anyone can buy and anyone can sell. The market
is subject to many outside influences, and the fluctuations reflect and
accentuate the varying shades of market opinions of many individuals.
But in the market for the actual commodity, the quotations are made by
comparatively few men, which means that there will be less fluctuation.
Therefore, it is obvious that although the exchange market _should_ be
on a parity with the actual market, the unequal fluctuations of the two
markets will be constantly throwing them out of parity or "out of
line."
There are times when the market will be so out of line that the _buying_
of futures should result profitably. At other times, with conditions
reversed, _selling_ of futures seems obviously advisable. We do not
claim that jobbers can protect sugar purchases with absolute and exact
precision. On the basis of long exchange experience, we _do_ believe,
however, that by a discreet use of the Exchange, and by using the
market when quotations are _favorably_ out of line, jobbers can do so
to their decided advantage.
Selling of Futures--Hedging
As the word itself indicates, a "hedge" on the Exchange is a
protection.
You hedge by buying or owning actual sugar, and "selling short" in the
same amount. You sell sugar futures although you do not own any. You
actually contract to deliver an amount of sugar during a specified
future month at a specified price.
Eventually, you must either buy and deliver actual sugar to carry out
this contract, or you must buy another contract for futures to cancel
your short sale. This is known as a "covering" operation, and the
cancelling of one by the other takes place automatically through the
channels of the Exchange.
From the jobber's point of view, the operation of hedging has three
outstanding purposes. He may hedge:
1. To eliminate the probability of speculative profit or loss, due
to market fluctuations.
2. To protect a profit on a favorable purchase of actual sugar.
3. To establish and limit a loss on an unfavorable purchase of
actual sugar.
HEDGING _to protect a normal jobbing profit by eliminating the
probability of a speculative loss or gain_.
This operation is particularly useful to jobbers with whom conditions
are such that they desire to be assured that their cost will be at
about the market price at the time they dispose of their sugar,
regardless of whether the market be higher or lower.
Although there are times when any jobber, no matter where located, will
find this a useful transaction, it is obvious that many buyers will not
wish to use the market in this way unless they feel it will decline.
But it is particularly of advantage to a jobber located in markets
necessitating a delay of from one day to several weeks in transit.
For instance, on a certain day in April, two jobbers bought their usual
quantity of sugar. One was located in Syracuse, the other in New York.
Two days following the purchase, the market broke half a cent per
pound. In view of the fact that his sugars were still in transit when
the market declined, the Syracuse buyer was obliged to sustain this
entire loss, in order to meet competition. On the other hand, because
he received and distributed the sugar before the market broke, the New
York jobber was able not only to avoid a loss, but make his regular
profit.
CHART 1
----------------------------------------------------------------------------
HEDGING
to protect a normal jobbing profit by eliminating the probability of
a speculative loss or gain
------------+-----------------------------------------+-----------+---------
Initial | |
Transactions| Subsequent Transactions | Result
------------+-----------+---------------+-----+-------+-----------+---------
|Liquidating| Condition |Price| Result| Figure | In each
| the hedge | of market | you | of | your | case
|(covering) | when you |would| hedge | sugar | the
| | "cover" | pay | cost | cost | same
| | your hedge | in | this | this |
| | |cover| way | way |
| | |-ing | | |
------------+-----------+---------------+-----+-------+-----------+---------
You buy | When you | | |Profit |Actual cost|
actual sugar| sell your |It has declined| | |less profit|
at 6.00 | sugar (or |to 4.00 |4.00 |2.00 |6-2=4 |
| when it is| | | | |
| delivered)| | | | |
| you buy | | | | |You get
| the same | | | | |your
| amount of | | | | |sugar
| futures at| | | | |at the
| the market| | | | |market
| price, | | | | |price
| whether | | | | |at the
| higher or | | | | |time
| lower. | | | | |when you
| | | | | |sell it
| | | | | |(or when
At the same | | | | |Actual cost|your
time you | |It has advanced| |Loss |plus loss |delivery
hedge by | |to 8.00 |8.00 |2.00 |6+2=8 |is made.)
selling the | | | | | |
same amount | | | |No | |
of futures | |It stands at | |profit,|Actual |
at 6.00 | |6.00 |6.00 |no loss|cost |
------------+-----------+---------------+-----+-------+-----------+---------
Naturally the greater the amount of sugar any one concern may have in
transit the greater the need for protection. We call this kind of
transaction particularly to the attention of buyers having branch
houses who find themselves obliged to make relatively large purchases
to supply their trade in the face of a market in which they have no
confidence.
These disadvantages at which out-of-town buyers are sometimes placed
might be overcome by using the Exchange. On the other hand, when
refiners are badly behind on deliveries, even buyers located at the
source of supply will find themselves facing a similar problem the
solution of which may be found in a use of the Exchange.
It is therefore evident that the selling of futures may be a transaction
the _sole_ purpose of which is to eliminate speculation from a jobber's
business.
Regardless of how careful a buyer may be, there is an element of
_speculation in each purchase of actual sugar_.
If the price goes up, there is a speculative gain--the sugar is worth
more. But if the price goes down, the buyer sustains a speculative
loss.
The measure of protection afforded by the Exchange will appeal to those
jobbers who wish to reduce the speculative element in their business.
In the example immediately following, as in all others, we have not
taken into consideration the difference between the Exchange quotations
and the Seaboard Refiners' quotations, which is explained on page 38.
This would simply inject an unnecessary complication, and would be of
no particular advantage for purposes of illustration.
Suppose you should buy through your broker from a refiner, for prompt
shipment, an amount of _actual_ sugar at 6.00, which you plan to sell
within a short time after its receipt. Instead of worrying about
subsequent sugar price fluctuations, you simultaneously hedge this
purchase by _selling_ futures in the same amount on the Exchange. The
price at which you buy actual sugar and the price at which you sell
futures should be relatively the same, since Exchange prices generally
reflect refiners' prices.
You should be able to figure the cost of your sugar at about the market
price at the time it is received or sold. (See Chart 1.)
If the price of sugar should go down to 4.00 at about the time when you
sell it, your actual sugar, for which you contracted to pay 6.00, would
be worth only 4.00; but you would then buy to cover your futures sale,
making 2.00 on this transaction, which, subtracted from the price you
paid (6.00), brings the cost down to the market price of 4.00. In other
words, you have accomplished your purpose of being able to figure your
sugar cost at the market price at the time when you received it (or at
the time you sell it). That is, although every pound of actual sugar
was sold at a loss, this loss was balanced by the profit from your
hedge.
If, on the other hand, the market should advance to 8.00 after your
original purchase and hedge at 6.00, the value of your actual sugar
would be increased by 2.00. You would then buy futures at 8.00 to cover
your short sale at 6.00, netting a loss thereby of 2.00. This loss
would be added to your original cost of 6.00, making your actual sugar
cost 8.00, which is the market price at the time. Had you omitted the
hedge, your sugar would have cost you only 6.00, but, in this example
we are assuming that you would sell only when you were willing to
figure your sugar cost at the market price. This you have accomplished
by foregoing the speculative profit you _might_ have made in favor of
your normal jobbing profit.
If the market should remain relatively stable you would buy to cover
your hedge at approximately the same price as you sold for, your gain
or loss being practically nothing. In other words, you would obtain
sugar at the market price, which is the purpose in this kind of a
hedge.
HEDGING _to protect a gain on a favorable purchase of actual sugar_.
All sugar buyers have had the experience of buying actual sugar, only
to see it advance or decline before they have disposed of it. How to
protect the gain, or minimize the loss, is described in the two hedging
positions which we now discuss.
Suppose you have bought sugar, have _not_ hedged against it, and have
seen it advance. Finally you have said, "I think sugar is about as high
as it is going. I am going to sell against that to protect that
profit."
On the other hand, the reverse might be the case. You might find the
market going down, and say, "The market is going lower. I want to hedge
against that, and limit my loss to a definite amount."
CHART 2
----------------------------------------------------------------------------
HEDGING
to protect a gain on a favorable purchase of actual sugar
--------------+-----------------------------------------+----------+--------
Initial | |
Transactions | Subsequent Transactions | Result
--------------+--------+----------+---------+-----------+----------+--------
| Hedge |Condition |Price you| Result of | Figure | In
| |of market | pay for | hedge and | actual | each
| | when you | futures | covering | sugar | case
| | "cover" | to cover| operation | cost | the
| |your hedge| hedge | | this way | same
--------------+--------+----------+---------+-----------+----------+---------
You buy actual| | | | |Price paid|
sugar at 6.00,| | | | |for actual|
but before you| |It has | | |sugar less|Your
have received | |declined | | |hedging |sugar
it (or before | |to | |A profit |profit |cost
you sell it) | |6.00 | 6.00 |of 2.00 |6-2=4.00 |is
the price | | | | | |2.00
advances to | | | | | |under
8.00 | | | | |Price paid|the
| | | | |for actual|market
You now have |You sell|It has | | |sugar plus|
your sugar at |futures |advanced | | |hedging |
2.00 under the|at |to | |A loss |loss |
market |8.00 |10.00 | 10.00 |of 2.00 |6+2=8.00 |
| | | | | |
You feel that | |It stands | |No profit, | |
the market may| |at 8.00 | 8.00 |no loss | 6.00 |
recede and | | | | | |
eliminate | | | | | |
this gain, | | | | | |
so-- | | | | | |
--------------+--------+----------+---------+-----------+----------+--------
In both of these cases, the operation is relative. If a man has a
profit, let us say 2¢ a pound, and he hedges, he maintains his profit
of 2¢ a pound as compared with the market at the time of delivery, or
at the time when he expects to sell this sugar, regardless of whether
the market is higher or lower.
In the same way, conversely, if he has a loss on his sugar of 2¢ a
pound, by hedging he can limit that loss to 2¢ a pound, even though the
market goes still lower. In other words, his sugar cost at the time of
delivery, or at the time when he expects to sell the sugar, will be
about 2¢ above the market price, whether the market is higher or lower.
We shall assume that you have bought from a refiner through your broker
a supply of actual sugar at 6.00. While your sugar is in transit or
before it has been shipped by refiners, the market advances to 8.00, at
which point it apparently is steady. You now have a _theoretical_ gain
of 2.00--that is, if you were to sell your sugar at once, you would
have an _actual_ profit of 2.00; but you do not sell because your
sugar is in transit or you need it for your trade. However, you do want
to preserve and protect this favorable position of having your sugar
2.00 below the market at the time you want to sell it. So you sell the
same quantity of futures on the Exchange at 8.00.
Three things may occur--the market may decline, or it may continue to
advance, or it may remain steady. You have accomplished your purpose in
any case (see Chart 2).
By the time you sell your sugar (or at the time of its delivery) it
becomes necessary for you to cover your hedge and if the market has
declined from 8.00 (at which point you hedged) and stands at 6.00
again, your hedging operations considered alone would net you an actual
profit of 2.00. Your original sugar cost was 6.00. Your profit on your
hedge was 2.00, so that you would figure your actual sugar cost at
4.00. You would have accomplished your purpose of getting your sugar
2.00 under the market at the time of selling it (or at the time of its
delivery). That is, your delay in selling your sugar has cost you
practically nothing, even though the market has declined.
If the market has advanced to 10.00, when it becomes necessary for you
to cover your hedge (at the time of selling your sugar or when it is
delivered) your hedging operations considered alone would net you a
_loss_ of 2.00. You would buy in futures at 10.00, which you sold at
8.00. Your original sugar cost was 6.00, your loss on your hedge was
2.00, so that you would figure your actual sugar cost at 8.00. But the
market at that time was 10.00, so that you have accomplished your
purpose of getting your sugar 2.00 under the market at the time of
selling it (or at the time of delivery). In other words, you would make
the same profit as though you had re-sold your sugar to second-hands
originally, instead of hedging, but had you followed this course, you
might not have had sugar in stock for your regular trade.
On the other hand, when it becomes necessary for you to cover your
hedge, if the market has remained steady and is again at 8.00, the two
futures transactions cancel themselves without profit or loss. Your
original cost of 6.00, therefore, stands as your actual sugar cost at
the time of selling (or at the time of delivery). This is 2.00 under
the market and you have accomplished your purpose.
HEDGING _to establish and limit a loss on an unfavorable purchase_.
This operation is identical in its working with the previous example,
except that you have a different end in view.
CHART 3
--------------------------------------------------------------------------
HEDGING
to establish and limit a loss on an unfavorable purchase
------------+--------+---------------+-------+----------+----------+-------
Initial | |
Transactions| Subsequent Transactions | Result
------------+--------+---------------+-------+----------+----------+-------
| Hedge | Condition of | Price | Result | Figure | In
| | market when | you | of | actual | each
| | you "cover" | pay | hedge | sugar | case
| | your hedge | for | and | cost | the
| | |futures| covering | this | same
| | | to | operation| way |
| | | cover | | |
| | | hedge | | |
------------+--------+---------------+-------+----------+----------+-------
You buy | | | | |Price paid|
actual sugar| | | | |for actual|
at 6.00 but | | | | |sugar less|
before you | | | | |hedging |
have | |It has declined| | A profit |profit |
received it | |to 4.00 | 4.00 | of 1.00 |6-1=5.00 |
(or before | | | | | |
you sell it)| | | | | |
the price | | | | | |
declines to | | | | | |
5.00 | | | | | |
| | | | | |
You now have| | | | |Price paid|Your
your sugar | | | | |for actual|sugar
at 1.00 | | | | |sugar plus|cost is
above the |You sell| | | |hedging |1.00
market |futures |It has advanced| |A loss of |loss |above
|at 5.00 |to 6.00 | 6.00 |1.00 |6+1=7.00 |the
| | | | | |market
You feel | |It stands at | |No profit,| |
that the | |5.00 | 5.00 |no loss | 6.00 |
market may | | | | | |
decline | | | | | |
still | | | | | |
further and | | | | | |
increase | | | | | |
this loss, | | | | | |
so-- | | | | | |
------------+--------+---------------+-------+----------+----------+-------
Let us say that you purchase actual sugar at 6.00. If the market
declines to 5.00 after your original purchase at 6.00, you have a
_loss_ of 1.00, in the value of your sugar. Facing the possibility of a
further decline and desiring to _limit_ this loss to 1.00, you hedge by
selling futures. In this case you should limit your _loss_ to 1.00 just
as effectively as in the previous example you preserved your _gain_ of
2.00, and by the same course of procedure. (See Chart 3.)
By the time it is necessary for you to cover your hedge by buying an
equivalent amount of futures, the market may have declined still
further, say to 4.00. You sold at 5.00, you bought at 4.00, profit on
that operation, 1.00. Subtract this profit from your original cost
(6.00) and figure your sugar cost at 5.00. In other words, although the
market went still lower, you succeeded in limiting your loss to 1.00,
as compared with the market price at the time of the delivery of your
sugar (or at the time you sell it). Had you omitted the hedge, your
actual sugar cost would have been 6.00, which was 2.00 above the
market.
After your original purchase at 6.00, and market decline to 5.00 (at
which point you hedged), the market might advance again to 6.00, or
remain steady at 5.00, but the operation is no different from that
previously described, and you in each case attain the same result.
Buying of Sugar Futures
Refiners do not make a practice of taking orders more than thirty days
in advance of actual delivery--but there are obviously times when it is
advisable to cover one's requirements for a longer period. A jobber may
do this on the Exchange where he will always find a seller at _some_
price for the quantity he desires.
This privilege is particularly valuable to:
1. Jobbers who believe that the market price of Sugar is going
higher and who desire to cover their future requirements beyond the
delay period which refiners will extend.
2. Jobbers, who desire to sell to manufacturing customers for
future delivery at a fixed price so that these manufacturing
customers may determine their selling price, may do so by the use
of the Exchange.
_1. Buying of sugar futures--Based upon the expectation of higher
prices_
No doubt many jobbers will recall occasions when anticipating their
requirements seemed obviously advisable, perhaps almost imperative.
Such a jobber would be one who believed in the market. His action would
be based on his opinion of the market. He might note in January, let us
say, that the price of May or July futures is favorable. He would like
to get his May or July sugar at about that figure. You yourself
probably can recollect many times in the past, when the general market
was in such a strong position fundamentally that anticipating your
requirements seemed advisable. You decided to buy a considerable
quantity only to find that refiners would not sell you to the extent
that you wished to purchase. When covering your future requirements on
the Exchange, you can buy any quantity desired.
Consider also on how many occasions when you wanted and _needed_ a
definite future month of shipment, you have been told that "_as soon
as possible_" was the only acceptable basis.
Or have you had the experience of placing an order and waiting
twenty-four or thirty-six hours without knowing if the refiner would
accept your order? Meanwhile the market might have advanced, and, if
your order had been declined, you would have had to pay an even higher
price for your sugar. The facilities of the exchange offer opportunities
for protecting requirements _quickly_ and without the uncertainty and
delay sometimes encountered from refiners.
A jobber must anticipate the market in order to take full advantage of
it, and in this connection it should be borne in mind that the Sugar
Exchange, as in the case of practically all exchanges, usually
anticipates either favorable or unfavorable developments in the market
for the actual commodity. Consequently, prompt action is necessary when
either a higher or lower market is expected, as the Exchange market
will usually be the first to reflect changing conditions.
Suppose you feel that the price of sugar is low and probably going
higher. You try to anticipate your requirements for some time to come,
but find that refiners will not sell for more than thirty days.
You can go on the Exchange and buy futures in the quantity and month
desired. Assume then, that you pay 6.00 for your futures. Now, whatever
happens in the sugar market, you know you can get the quantity of sugar
desired at about 6.00 (see Chart 4).
The market will advance, decline or hold steady.
Say the market advances. When it seems advisable to close out your
Exchange contract and buy actual sugar, the price may have gone up to
8.00. You will then sell your futures at about 8.00, go into the market
and buy actual sugar at the same price, assuming, of course, that the
actual market has advanced in relative proportion--which is likely.
Although actual sugar has cost you 2.00 more than you had figured, you
have made 2.00 on your futures. Profit and loss cancel each other. Your
sugar cost is 6.00.
On the other hand, suppose the market declines after you have bought
futures at 6.00, and goes down to 4.00, when it seems advisable to
close out your Exchange contract. You sell your futures at 4.00, a loss
of 2.00. But you will also buy your actual sugar at 4.00, which is 2.00
lower than you had planned. Your actual sugar cost was therefore 6.00,
which is the price you had figured was favorable.
If the price still is at 6.00 when you desire to liquidate, you would
sell your futures and buy your actual sugar at about the same price.
Thus you have neither gained nor lost, but you have been sure of
getting sugar at 6.00, which is the price you felt was low.
The time to buy actual sugar is generally when the market becomes
strong and an advance in the price of the actual commodity seems
imminent; but the time to buy sugar futures is before the strength
develops. The future market invariably discounts declines and
anticipates advances.
_2. Buying of Sugar Futures to protect profits on advance sales to
customers_
While it may not be an established custom, we know numerous instances
where jobbers have sold sugars in small quantities for future delivery.
The examples to which we refer are small manufacturers buying sugar
locally, who, when the market appears in a strong condition desire to
be assured of their regular supply of sugar at a specified price. Under
such conditions we have known jobbers to sell them sugar for delivery
over several months. If at any time you are placed in a similar
position, and desire to take care of your customers in this manner,
without incurring too great a risk, the Exchange offers exceptional
opportunities for protection, as, of course, you would be able to buy
sugar for delivery in any month you desire, even as far in advance as
one year.
It is clear that if you sell at a specified price for delivery at a
certain time, your only protection is your belief that you'll be able
to buy sugar cheaply enough to make a profit.
CHART 4
----------------------------------------------------------------------------
BUYING SUGAR FUTURES
1. Based on the expectation of higher prices.
2. To establish costs, pre-determine selling prices and protect profits
on advance sales.
----------------------------------------------------------------------------
Initial | | |
Transactions | Subsequent Transactions |Sugar Cost | Result
-------------+------+----------+--------+-------+------+------------+-------
| |Condition | Price |Result |Price | Figure it | In
| |of market | you | of | you | this way |each
| | when you | would |selling| pay | |case
| |buy actual| obtain | your | for | |the
| | sugar |for your|futures|actual| |same
| | |futures | |sugar | |
-------------+------+----------+--------+-------+------+------------+-------
| | | | | |Price paid |Your
| | | | | |for actual |sugar
| | | |A | |sugar less |cost is
You buy Sugar|When |If it has | |profit | |hedging |6.00
Futures at |you |advanced | |of | |profit |as pre-
6.00 to cover|buy |to 8.00 | 8.00 |2.00 | 8.00 |8-2=6 |deter-
future |actual| | | | | |mined
requirements;|sugar,| | |A | |Price paid |
fix your |you |If it has | |loss | |for actual |
price and |sell |declined | |of | |sugar plus |
take orders |your |to | | | |hedging loss|
on the basis |fu- |4.00 | 4.00 |2.00 | 4.00 |4+2=6 |
of 6¢ sugar |tures | | | | | |
| |If it is | |No | | |
| |still at | |profit,| | |
| |6.00 | 6.00 |no loss| 6.00 | 6.00 |
-------------+------+----------+--------+-------+------+------------+-------
It is equally clear that if a manufacturer names a price and takes
advance orders without pre-determining his sugar cost, his profit is a
matter of guesswork. He is not going to know the cost of his
manufactured product until he buys his sugar.
Assume that you have contracted to deliver sugar to a manufacturer or
to any customer at a definite date and a specified price, without
buying sugar to cover your requirements. If the price of sugar is
favorable when you deliver it, you are fortunate and net a profit. But
sugar may have advanced to a point where you are forced to pay such a
price that your profit is lower than it should be. In fact there may
not be any profit at all.
By conservative, wise use of the Sugar Exchange, most of this risk and
uncertainty can be eliminated and both you and your customer can go
ahead with your plans with your prices determined through a known sugar
cost.
Suppose that in March or April, for example, the market appears strong
and you find that some of your manufacturing customers are anxious to
be assured of an adequate supply of sugar at a definite price. In such
a case, if these advance orders called for a sufficient volume, and
provided Exchange prices were favorable, you could take care of your
trade's future requirements at a fixed price, without yourself taking a
speculative position. We also believe that buyers making these
arrangements with any of their trade would be justified in requesting
the same proportionate marginal protection which it is necessary for
jobbers themselves to give the seller on the Exchange. There will no
doubt be many occasions when it would be worth while to solicit orders
on this basis.
With your own sugar cost fixed by the use of the Exchange, you could
take proper care of these buyers without worrying about subsequent
fluctuations of the market, as you would know that your sugar cost
would be about the price paid for your futures which, let us say, is
6.00. (See Chart 4.)
The market may advance so that by September, sugar is selling at 8.00.
(You are now making deliveries to your trade as contracted). So you
sell your futures at 8.00, go into the market and buy actual sugar for
about the same figure, assuming, of course, that actual sugar has also
advanced in relative proportion, which is likely. You pay 2.00 more for
your actual sugar than you had figured but you have profited to the
extent of 2.00 on the sale of futures. Profit and loss cancel each
other and you have your sugar at 6.00. In other words, although the
market is now 8.00 you are delivering 6.00 sugar to your customers,
with a profit to yourself.
If the market declines after your original purchase at 6.00 so that in
September sugar is selling at 4.00, you will sell your futures at 4.00,
taking a loss of 2.00. But you will buy your actual sugar at about
4.00, also, which is 2.00 lower than you planned for. This gain of
2.00, while not to be termed an actual profit, may certainly be
considered as canceling the loss on the sale of your futures, so that
the cost of your sugar is really 6.00, your original price.
Another way of looking at this is to add the loss of 2.00 on the sale
of your futures to 4.00, the cost of your actual sugar, making 6.00,
the price upon which you had based your plans. If you had waited, you
would have been able to get your sugar for 4.00, but by buying it ahead
you have had the benefits of protection and the elimination of
speculation and risk.
If the market remains steady after your June purchase, or after various
fluctuations, returns to 6.00 by September, you sell your futures at
6.00 and buy spot sugar for about the same amount. Thus you have
neither gained nor lost, but you have been protected in your sugar
cost.
This is essentially a "playing-safe" operation. It results in profit
insurance for the jobber who is willing to sacrifice the possibility of
a speculative gain on advance sales to customers. It is thoroughly
sound business policy and is neither expensive nor difficult to carry
out.
Point of Delivery
Although Chicago is the delivery point in all Exchange contracts for
refined sugar, it should be plainly understood that the Exchange is for
anyone, anywhere. Whether located in Chicago, or in Rochester,
Baltimore, New York or even San Francisco, a jobber can advantageously
use the Exchange.
Deliveries of Refined Sugar Futures will be made only from the
Exchange-licensed warehouses in Chicago. But, regardless of the
prospective buyer's location, the delivery point is not of any material
importance as it is an established fact that in operations on all
exchanges the percentage of actual deliveries taken is exceptionally
small. In fact, the examples used in this booklet are all based on the
supposition that the buyer may find it more convenient _not_ to take
delivery.
The usual procedure followed in sugar exchange operations is for the
buyer to close out his exchange transaction prior to the period calling
for delivery and purchasing actual sugar from the refiners, executing
both transactions practically simultaneously.
Possibly the most important problem in connection with the organization
of any commodity exchange is to reduce the possibility of corners,
however remote, to the smallest possible degree.
In the case under discussion, the Chicago delivery point, by virtue of
its accessibility for producers and consumers from all parts of the
country, operates to that end.
Practically every refiner of cane sugars in the East and West, as well
as the Southern refiners, carries large stocks in Chicago, and its
favorable location in connection with the beet sugar industry also
makes it highly desirable. Its situation in regard to the offerings of
the Louisiana producers is also an additional protection and advantage
of considerable importance.
The Exchange-licensed warehouses in Chicago are under the direct and
constant supervision of Exchange representatives. Facilities are
provided for testing and grading sugar so as to maintain Exchange
quality standards.
When are Refiners' Prices and Exchange Quotations in line?
Since exchange quotations for refined sugar futures are net cash
ex-exchange-licensed warehouse, Chicago, while refiners' quotations are
f.o.b. refinery, less 2% for cash, it is obvious that there must be a
difference between refiners' prices and exchange quotations.
It is equally obvious that the differential should approximate the
freight rate between Chicago and the Seaboard, where the refiners are
located, with allowance also for the cash discount. When the markets
are in line such is the case. Conversely, when the differential is
higher or lower, the markets are out of line.
Therefore, in order to tell whether the markets are out of line, or to
what extent, it is necessary to determine on a differential to
represent the normal difference between the two markets. There is no
one figure, however, that will satisfy all conditions at all times, for
the reason that there are various freight rates between the Seaboard
and Chicago. It is inaccurate, for instance, to use 63¢ as the basis
for the normal differential. The 63¢ rate is one rate--the all-rail
freight rate from New York to Chicago.
Other important routes and rates are as follows:
Routing: Freight Rate:
New Orleans--Chicago (barge and rail) $0.50[1]
New York--Chicago (rail and lake) .58
New Orleans--Chicago (all rail) .60
Philadelphia--Chicago (all rail) .61
New York--Chicago (all rail) .63
Savannah--Chicago (all rail) .63
Boston--Chicago (all rail) .63
[1] The cheapest routing (48¢) takes about two weeks' more time
in transit than the New York all-rail routing (63¢). Interest
charges on finances involved, etc., for this extra period will
bring the expense of this routing to approximately 50¢.
After a study of the amounts of sugar shipped over these various routes
we have arrived at an arbitrary figure to represent the normal
differential between refiners' prices and exchange quotations. We
believe that 57¢ will serve as a safe basis for calculation, but 58¢ or
59¢ might be equally--or more--accurate. In fact, anyone is entitled to
an opinion. 57¢ is our opinion. It is not an average of freight rates,
but is an arbitrary figure.
When the markets are in line, using 57¢ as a basis for calculation, 2%
should be deducted from refiners' prices, and 57¢ added to determine
what Exchange quotation should be. Conversely, 57¢ should be deducted
from Exchange quotations and 2% added to determine what refiners'
prices should be.
If you are willing to accept 57¢ as a safe figure, you may find the
following chart useful in determining the condition of the market:
ARE REFINERS' PRICES AND EXCHANGE QUOTATIONS IN LINE?
Based on a 57¢ differential and 2% cash discount
When Exchange
Refiners' Quotations
Prices Are Should Be
4¢ 4.49
4.05 4.54
4.10 4.59
4.15 4.64
4.20 4.69
4.25 4.73
4.30 4.78
4.35 4.83
4.40 4.88
4.45 4.93
4.50 4.98
4.55 5.03
4.60 5.08
4.65 5.13
4.70 5.18
4.75 5.22
4.80 5.27
4.85 5.32
4.90 5.37
4.95 5.42
5.00 5.47
5.05 5.52
5.10 5.57
5.15 5.62
5.20 5.67
5.25 5.71
5.30 5.76
5.35 5.81
5.40 5.86
5.45 5.91
5.50 5.96
5.55 6.01
5.60 6.06
5.65 6.11
5.70 6.16
5.75 6.20
5.80 6.25
5.85 6.30
5.90 6.35
5.95 6.40
6.00 6.45
6.05 6.50
6.10 6.55
6.15 6.60
6.20 6.65
6.25 6.69
6.30 6.74
6.35 6.79
6.40 6.84
6.45 6.89
6.50 6.94
6.55 6.99
6.60 7.04
6.65 7.09
6.70 7.14
6.75 7.18
6.80 7.23
6.85 7.28
6.90 7.33
6.95 7.38
7.00 7.43
7.05 7.48
7.10 7.53
7.15 7.58
7.20 7.63
7.25 7.67
7.30 7.72
7.35 7.77
7.40 7.82
7.45 7.87
7.50 7.92
7.55 7.97
7.60 8.02
7.65 8.07
7.70 8.12
7.75 8.16
7.80 8.21
7.85 8.26
7.90 8.31
7.95 8.36
8.00 8.41
8.05 8.46
8.10 8.51
8.15 8.56
8.20 8.61
8.25 8.65
8.30 8.70
8.35 8.75
8.40 8.80
8.45 8.85
8.50 8.90
8.55 8.95
8.60 9.00
8.65 9.05
8.70 9.10
8.75 9.14
8.80 9.19
8.85 9.24
8.90 9.29
8.95 9.34
9.00 9.39
9.05 9.44
9.10 9.49
9.15 9.54
9.20 9.59
9.25 9.63
9.30 9.68
9.35 9.73
9.40 9.78
9.45 9.83
9.50 9.88
9.55 9.93
9.60 9.98
9.65 10.03
9.70 10.08
9.75 10.12
9.80 10.17
9.85 10.22
9.90 10.27
9.95 10.32
10.00 10.37
(This chart works both ways. That is, when the exchange quotation
is given, if the markets are in line the refiners' prices should be
as shown in the first column.)
It should be borne in mind that the above calculations are based upon a
normal difference in price of 20¢ per hundred pounds between beet and
cane sugars, which is the ruling difference as quoted in the Exchange
contract. Should beet refiners elect to sell at greater discounts than
20 points under cane refiners' Seaboard prices, the amount in excess of
20 points would have to be subtracted from our arbitrary figure of 57¢.
The Function of the Sugar Broker
If you should organize your company so that it could attend to all the
details of sugar buying economically, you would probably still profit
from the assistance of a sugar broker whose specialty is sugar buying,
whose horizon is a sugar horizon, whose thoughts are sugar thoughts and
who must necessarily know more about sugar than the average buyer would
ever consider it desirable to know.
The sugar broker's service to you is unaffected by prices--his prices
and all other brokers' prices are the Exchange prices; his commissions
are based on the same percentages as all other brokers' commissions.
His only distinction can come from the actual service he can render.
This service may be good or poor, depending upon whether his
experience, his organization, his information and his judgment are good
or poor. If, added to his knowledge of sugar, he also possesses a broad
knowledge of economic fundamentals and a perspective upon and contact
with world activities as they affect all phases of the business of
sugar, his service will be many times more valuable than if he were
limited by a small organization, by a definite locality or by
experience in only a few phases of this business.
A sugar broker who merely _accepts and transacts orders_ is giving no
service worth the name. To give service in accordance with the highest
modern standards, he must stand as an adviser, as a constant seeker
after opportunities which will benefit his clients, as a partner whose
interest in his clients' profits and progress equals his interest in
his own.
Our experience has convinced us that the client secures the greatest
amount of protection in filling his sugar needs when one broker handles
all sugar transactions.
These exchange operations should be carried out when the market is out
of line in your favor. You need the best kind of advice, based on an
intimate knowledge of your business.
A single brokerage house becomes thoroughly acquainted with the
client's business and personnel, with the result that the two
organizations work in harmony virtually as partners, confusion and
misunderstandings are avoided, quicker and more advantageous
transactions are made possible.
The choice of that broker should be a matter of great care, for in
addition to the willingness to serve, he must have the facilities and
the financial stability. For, bear in mind that the broker with whom
you deal is the responsible party for the fulfillment of the contract.
Your contract is as good only as the reliability of your broker.
Lamborn & Company has become known throughout this country and abroad
as an institution for the service of all those who have a business
interest in sugar.
Lamborn Sugar Service is rendered through our head office at 132 Front
Street, New York, and through branch offices in Philadelphia, Chicago,
Savannah, New Orleans, Kansas City, Mo. and San Francisco.
Lamborn Service in all its phases is available to you as a jobber.
We shall be very glad to explain either in person or by letter what a
brokerage relationship with us involves, how it may be accomplished and
how transactions may be carried out.
LAMBORN & COMPANY
_Sugar Headquarters_
132 Front Street: New York
7 Wall Street: New York (Securities)
Havana and Cienfuegos, Cuba Paris, France
THE LAMBORN COMPANY LAMBORN & CIE
_Branches in the United States_
Philadelphia Savannah New Orleans Chicago
Kansas City San Francisco
_Members of_:
New York Coffee & Sugar Exchange, Inc.
New York Stock Exchange
New York Cotton Exchange
New York Produce Exchange
Chicago Board of Trade
London Produce Clearing House, Ltd.
Cable Address: Lamborn
Contract between Members of the New York
Coffee and Sugar Exchange, Inc.
The Standard Fine Granulated Sugar contract is as follows:
Sold for ... to ... 800 bags (of 100 lbs. net each) of Standard Fine
Granulated Sugar at ... cents per pound, manufactured in the United
States or insular possessions, packed in cotton-lined burlap bags,
deliverable from licensed warehouse in Chicago between the first and
last days of ... inclusive. Delivery within such time to be at Seller's
option, upon seven, eight or nine days' notice to the buyer. If
Domestic Beet Standard Fine Granulated Sugar be delivered in
fulfillment of this contract, Seller to make an allowance of 20¢ per
100 lbs.
The Seller shall have the right to deliver Foreign Cane Standard Fine
Granulated Sugar in fulfillment of this contract by making an allowance
to the Buyer of 25¢ per 100 lbs., and foreign beet standard fine
granulated sugar by making an allowance of 45¢ per 100 lbs., provided
such sugars comply with the Types adopted as Standard by the New York
Coffee and Sugar Exchange, Inc., and all duties have been paid thereon.
This contract is subject to an adjustment for duty, as provided in the
Sugar Trade Rules.
Either party to have the right to call for margins as the variations of
the market for like deliveries may warrant, which margins shall be kept
good. This contract is made in view of and in full accordance with the
By-Laws, Rules and Conditions established by the New York Coffee and
Sugar Exchange, Inc.
(Written across the face is the following)
For and in consideration of one dollar to ... in hand paid, receipt
whereof is hereby acknowledged ... accept this contract with all its
stipulations and conditions.
Brokers' Commissions
The broker's commission for either buying or selling each contract of
800 bags of sugar depends upon the price at which the transaction is
executed. The following table gives a range of prices and the
corresponding commissions:
For the sale or purchase of each lot of 800 bags:
_Contract Price_ _Commission_[2]
Up to 9.99¢, per pound $15.00
10¢ to 12.99¢, " " 17.50
13¢ to 17.99¢, " " 20.00
18¢ and above, " " 25.00
[2] These commissions apply to transactions in the United States,
Porto Rico and Cuba, from non-members of the New York Coffee and
Sugar Exchange, Inc.
Minimum Trading Basis
A "lot" of refined sugar consists of 800 bags of 100 lbs. each, or
80,000 lbs. This is the minimum amount which can be sold on the
Exchange.
Delivery
The date upon which sugar shall be delivered on an Exchange contract is
at the option of the seller, provided that date come within the month
named in the contract. Notice of the date of delivery must be given to
the buyer seven, eight or nine days preceding the day on which delivery
will be made.
If you are not going to fill your actual sugar needs by accepting
delivery from the Exchange warehouses, you should close out your
contracts within two weeks, or, at the latest, ten days of the first of
the month in which delivery is specified, as after notification of
delivery has been given, there is usually not sufficient time to make
other plans.
Orders
Except in nearby localities, orders should be sent by wire, addressed
to: SUGAR FUTURES DEPARTMENT, 132 Front Street, New York, N.Y.
Inquiries or orders will be given prompt attention at any of our
offices, but time will be saved and execution facilitated if they are
sent direct to New York. Unless otherwise specified, orders are good
only for the day on which they are received. If they cannot be executed
at the price named before the closing of the Exchange on that day, or
if they should arrive after the Exchange closes, it will be understood
that they are automatically cancelled unless specific instructions are
given for the execution the following day or unless formally renewed by
wire. If you desire to place an order, good until countermanded, you
can do so. The general term applied to such orders is "order good till
cancelled." The general abbreviation in the trade is G.T.C.
Exchange Trading Hours
Hours for trading on the Exchange are from 11:00 a.m. to 2:50 p.m.,
except on Saturdays.
Saturday hours are from 10:30 a.m. to 11:50 a.m.
Delivery and Warehousing Charges
If you make delivery on the exchange, the following are your charges:
Storage 3¢ per 100 lb. bag
Handling in and out, charged
with first month's storage 5¢ per 100 lb. bag
Negotiable warehouse receipt 50¢
If you accept delivery on the exchange, your charges are:
Carloading 1-1/4¢ per 100 lb. bag
Acceptance of your order
The form of our acceptance of your order reads as follows:
In accordance with your instructions we have this day made the
following transactions in STANDARD FINE GRANULATED SUGAR for your
account and risk, subject in all respects, and in accordance with, the
Rules, By-Laws, Regulations and Customs of THE NEW YORK COFFEE AND
SUGAR EXCHANGE, Inc., and the Rules, Regulations and Requirements of
its Board of Directors, and all amendments that may be made thereto.
All transactions made by us for your account contemplate the actual
receipt and delivery of the SUGAR and payment therefor.
The right is reserved to close transactions when margins are exhausted
or nearly so, without notice.
+=================================================+
|Bags of Refined Sugar | Month of Delivery| Price |
|----------------------+------------------+-------|
| Bought | Sold | | |
|----------+-----------+ | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
|__________|___________|__________________|_______|
Raw Sugar Futures
Prior to the inauguration of trading in Refined Futures, Raw Sugar
Futures were used by many jobbers for hedging and protecting their
Refined requirements.
The theory of operation is that the raw price will be about equivalent
to the refined price after duty and the charge for refining are added.
While the Raw Sugar market will at times get out of line with refined,
both favorably and unfavorably, this cannot continue for any long
period.
When the Raw Futures market is favorably out of line, it may be more to
your advantage to use this market, rather than the Refined Futures
market. At the present time there is the added advantage that the
volume of trading is greater in Raw than in Refined.
When buying or selling Raw Sugar Futures, you may figure that the
variation on a minimum lot of 50 tons would be equivalent to the same
variation of 1120 bags or 320 barrels.
We give you below herewith details of contract and trading conditions:
All contracts for future delivery shall be for 50 tons of 2,240 pounds
each and multiples thereof.
CONTRACTS: Sold for ... to ..., 50 tons of 2,240 pounds each of sugar
in bags, deliverable from licensed warehouse in the port of New York,
between the first and last days of ... inclusive. The delivery within
such time to be at seller's option, upon 7, 8 or 9 days' notice to the
buyer. The sugar to be of any grade or grades of Raw sugars based on
Cuban Centrifugal of 96 degrees average polarization outturn at the
price of ... cents per pound in bond, net cash with additions or
deductions for other grades according to the rates of the New York
Coffee and Sugar Exchange, Inc., existing upon the afternoon of the day
previous to the date of notice of delivery, and shall embrace all
Centrifugals first running. The foreign sugars deliverable other than
Cuban Centrifugals, are: Centrifugals from British West Indies,
Demerara, Surinam, San Domingo, Brazil, Peru, Java, Mauritius,
Venezuela and Haiti, all basis of 96 degrees average polarization
outturn at .2512 cents per pound (difference in duty) less; but no lot
of 50 tons is to consist of sugar from more than one country of origin.
Allowances on Centrifugal sugars to be .03125 cents per pound per
degree above 96 degrees, up to 98 degrees and .0625 cents per pound per
degree below 96 degrees, down to 94 degrees and .09375 cents per pound
per degree below 94 degrees, down to 92 degrees, with fractional
degrees pro rata.
Exchange Trading Hours
Hours for trading in Raw Sugar Futures are from 10:45 a.m. to 2:45 p.m.
on week days and from 10:15 a.m. to 11:45 a.m. on Saturdays.
Trading Differences
A fluctuation of 1¢ per 100 pounds is equivalent to $11.20 per lot of
50 tons.
Margins
An original margin in New York funds must accompany all orders, we
reserving the right to call for variation margins when contract shows
depreciation. We also reserve the right to close transactions when
margins are exhausted or nearly so without further notice. The amount
of this original margin will of necessity fluctuate with conditions
existing at the time orders are placed. At the present time in
localities that are in position to make prompt remittance for any
variation margins required, the margin is $400.
Commissions
For either buying or selling each contract of 50 tons
Based upon a price
Below 4 cents $12.50
4 cents to 9.99 15.00
10 cents to 12.99 17.50
13 cents to 17.99 20.00
18 cents and above 25.00
NOTE: All orders for Raw Sugar Futures shall be in accordance with the
By-Laws and Rules of the New York Coffee and Sugar Exchange, Inc. and
the New York Coffee and Sugar Clearing Association, Inc.
End of Project Gutenberg's About sugar buying for Jobbers, by B. W. Dyer
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