Loonie seen hovering near par with U.S. dollar

next year

Thu Dec 2, 11:08 AM on www.yahoo.ca

KAHULUI

The rain came down. The price went up, and Hawaiian Commercial & Sugar Co. finished the year with a much improved crop.

The final raw sugar shipment was loaded at Kahului Harbor’s Pier One on Wednesday and Thursday.

The harvest was just shy of 172,000 tons, much better than the 127,000 tons in 2009, but well short of the 200,000 tons the plantation can make in a good year.

In a telephone interview from New York on Thursday, HC&S General Manager Chris Benjamin said that although there is still “a ways to go,” the improved crop and better world prices take the immediate pressure off the plantation.

A year ago, after experiencing heavy losses attributed to a long drought, the directors of Alexander & Baldwin took a hard look at HC&S. The 37,000-acre plantation was the origin of the A&B conglomerate, but today it accounts for only about 7 percent of revenues.

The board approved continuation of the business only until the end of this year, pending improved results.

Financial results won’t be published until next year, but Benjamin said he believes that the board is already satisfied that the operation is on the right track.

At this week’s price of nearly 40 cents per pound of raw sugar (in New York), the crop would be worth more than $130 million, not counting molasses and electricity byproduct revenue, plus the premium for the part of the crop sold as specialty sugars.

However, HC&S will not get nearly that much, because the price has varied considerably during the year. The company does not participate in the federal sugar price support program, so it takes its chances on the world and domestic markets.

“There has been a lot of volatility,” Benjamin said. “Fortunately, the general trend is up,” and he is hopeful that it will continue strong for a while. But trying to foretell prices more than a short distance into the future is hopeless.

That’s one of the reasons HC&S is looking to move into energy production, “so we can lock in some future pricing,” he said.

For the immediate future, though, HC&S is growing sugar to eat.

Utilities, with their regulated pricing, are willing to sign delivery contracts for decades, unlike the members of the Sweetener Users Association, the businesses that buy sugar as an ingredient in processed food.

In Hawaii (but not in Texas or Louisiana) sugar is a two-year crop.

The acres harvested this year were planted in 2008, a drought year, but enjoyed somewhat better rain in 2009. This past year was dry again, but the somewhat better

weather was responsible for most of the increase in the crop.

“I believe our yield per acre was up about 32 percent, and production is up 35 percent,” Benjamin said. So, weather is the main reason.

Last winter, the mill shut down for an extended refit, and there were some gains in recovery, about 4 percent. “Every little bit helps,” he said.

Benjamin called the 2010 output “a good important step forward in getting back to where we need to be.”

* Harry Eagar can be reached at heagar@mauinews.com.

In a further indication that the visitor industry recovery is gathering momentum, spending by visitors in Maui County was up 32.6 percent to $258.7 million in October. Spending per person per day rose 10 percent to $185 on Maui, 4.4 percent to $105 on Molokai and 8.3 percent to $313 on Lanai.

The percentage gains are somewhat misleading, since they are coming off the very depressed situation in October 2009. However, a visitor total of 180,882 for an October is fairly robust even by usual standards. The big gain in per person per day spending may indicate that hoteliers are beginning to back off from the heavy discounting they used earlier to keep head counts up.

The Flash Report from Hospitality Advisors later this month will reveal if that happened.

State tourism liaison Marsha Wienert said there has been some recovery in room rates but also in spending at retail shops and on activities and recreation.

“When the downturn started, per person per day spending went down in just about all categories except transportation,” she said.

October is considered a “shoulder month,” a sort of breather between the last summer rush of August and the start of the prime winter season, in late December.

Maui Visitors Bureau Executive Director Terryl Vencl said she was “very happy with the news,” although still nervous about international events that could work against Maui tourism.

“I am cautiously optimistic, but anything anywhere on the globe could could cause more issues for us,” she said.

She noted the jump in expenditures. “We have a long way to go from the deep discounting,” and as a shoulder month, not too much can be read into the results, but “all trends seem to be heading in the right direction,” Vencl said.

The rest of the state also enjoyed an October surprise, though not quite as big as Maui’s.

Oahu head count was up 10.3 percent to 348,702, and spending up was 20.7 percent to $484 million.

Kauai head count was up 7.9 percent to 79,009, and spending was up 29.4 percent to $99 million.

Hawaii County head count was up 13.8 percent to 104,404, and spending was up 23.8 percent to $117 million.

For the first 10 months, Maui County visitor numbers are up 9.6 percent to 1.8 million, and spending is up 19.9 percent to almost $2.5 billion.

“It’s been a challenging couple of years, but the improving national and international economy is boosting consumer confidence,” said Wienert. “This confidence will generate an increased desire to travel for both business and pleasure.”

Vencl attributed Maui’s gains to heavier marketing. “It’s from being out on the road. We’ve got to maintain that pressure,” she said.

Statewide, spending by visitors to Hawaii jumped 24.7 percent in October compared to the same month last year.

Spending rose as more travelers visited Hawaii and as they spent more on average during their stay, the Hawaii Tourism Authority said.

The gains followed a yearlong trend in which spending rose 14.7 percent for the first 10 months of 2010.

Hawaii Tourism Authority President Mike McCartney said he’s viewing the figures with ”cautious optimism.”

”While the trends are positive, we have not yet fully recovered. Therefore, we need to continue our efforts to aggressively market Hawaii to help drive demand,” McCartney said.

The agency said total visitor spending hit $961.5 million in October, up $190.6 million from October 2009. The number of visitors rose 13.6 percent to 574,425.

The greatest growth came from the West Coast, which sent 21.4 percent more visitors, and Canada, which sent 17.2 percent more.

The statistics are published by the Hawaii Tourism Authority. The authority is funded by the state hotel tax and promotes travel to Hawaii.

* Harry Eagar can be reached at heagar@mauinews.com. The Associated Press contributed to this report.

Local retailers, aggressively trying to woo customers to their websites, expect online sales to match the strong start to the holiday season over the weekend, when 212 million shoppers flocked to stores and websites, up from 195 million a year ago, according to the National Retail Federation.

Consumers spent more than they did last year, with the average shopper spending $365, up from $343, an NRF survey shows. Total spending was estimated at $45 billion over the weekend.

Online sales at Maui Divers Jewelry, which has 55 stores, were up about 40 percent over the previous year this weekend, and Cyber Monday sales were up about 10 percent early yesterday afternoon, said Bob Taylor, president and chief executive officer of Maui Divers, which offered as much as half off the regular price and free shipping yesterday.

“It’s a good day,” he said. “As we get closer to Christmas, we’ll have even larger days.”

While sales are up, the average transaction is down about 10 percent over last year, Taylor said.

“People are definitely looking for lower price points from a year ago in the jewelry business,” he added.

Nearly 90 percent of retailers offered Cyber Monday deals yesterday, which could drive sales to more than $1 billion, according to one estimate. Online shoppers spent $648 million on Black Friday, up 9 percent from a year ago, and $407 million — 28 percent more than last year — on Thanksgiving, according to comScore, which measures online retail sales.

Hilo Hattie expects it will “easily double business on Cyber Monday,” according to Mark Storfer, executive vice president and chief operating officer for Pomare Ltd., parent company of Hilo Hattie, which will continue Cyber Monday offers for the next two weeks.

The Hawaiian gift store more than doubled online sales this weekend compared with the previous year, while brick-and-mortar stores were up 40 percent over last year on Black Friday — the best in five years, he said.

“It was huge. We had an incredible day,” Storfer said. “The common reasons for both brick-and-mortar and online (increases) is we see the economy improving, and we see customers more confident about the future.”

Customers are spending more on themselves this year than on family and friends, he said.

Retailers nationwide have gotten aggressive in marketing the so-called Cyber Monday following Black Friday, with many promoting sales through Facebook, Twitter and on websites.

Hilo Hattie sent a targeted e-mail invitation to a quarter of a million customers offering free shipping anywhere in the United States with a $100 purchase, beginning yesterday through Dec. 15.

“I woke up to 20 e-mails from all these different online vendors,” said Donnie Ford, a Hawaii Kai resident who shops online throughout the year but did not have time to shop yesterday.

While Cyber Monday is not as big as Black Friday in terms of traffic and sales for Best Buy, “it’s a lot bigger than it has been in previous years,” said Shawn Troup, Iwilei store manager.

“A lot of people are getting more tech savvy; they’re getting their needs online,” he said. “A lot of people are able to get things that might be out of stock or not available from (Black Friday); now they’re able to get them online.”

Best Buy has hired more staff to handle the expected increase in online ordering, which is up from last year, Troup said.

“Online is getting bigger and bigger and bigger,” he said.

“It was better than expected and going to continue to grow. For some people it’s more convenient. Time-starved people that don’t have a lot of time to drive to places are doing more and more research online.”

Macy’s also anticipates a rise in traffic and sales compared with last year, according to John Gorham, senior vice president and regional director of stores for the southwestern region.