Global sugar market – the analysis of factors influencing supply and demand

This article deals with an analysis of the world sugar market, and specifically focuses on the supply and demand of refined sugar and their main determinants. The article first identifies the main determinants of the world supply of and demand for sugar, and further, their effect on such variables is quantified. Further, the component correlations on the selected market are analyzed. This consists of the identification of the factors affecting the production of refined sugar, as one of the main elements of the supply of sugar, as well as an analysis of the world price of sugar, as one of the significant factors affecting the world sugar market. The said correlations are quantified with the utilization of regression analysis on the basis of time series of the individual variables within the years 1980–2010. On the basis of the conducted analysis, the main determinants of the sugar supply on the world market within the analyzed period, for which an effect has been established both from an economic viewpoint, as well as from a statistical viewpoint, can be considered to be sugar reserves, its price and the acreage of sugarcane. The main determinant of the demand for sugar is, according to the conducted analysis, the global GDP on a new value level, as well as converted to one inhabitant. Further, the analysis also established the effect of the price of sugar and its reserves on the world production of refined sugar, and, last but not least, also the long-term tendency in the development of the world price of sugar. The analysis has proven significant influence of refined sugar supply, reserves of refined sugar, its price and area of sugar cane on sugar supply. Then, the analysis detected GDP as the main determinant of the sugar demand and the long memory in sugar prices. Finally, the influence of delayed price, reserves and delayed reserves on production has been proven.