Abstract
The sugar market in the EU is among the most regulated food markets in the world. This regulation is based on production quotas and foreign trade regulations. At the same time, individual links of the marketing chain are characterised by highly varied degree of concentration, which – in the conditions of strong market protection – creates the potential for monopolistic practices and the so-called monopolistic margins. In this context, the paper aims at empirical assessment of changes in sugar prices in Poland and identification of their determinants. The study was based on monthly sugar prices in Poland, the EU and across the world in 2000-2014. Time series models were used to assess correctness. The conducted research indicates that sugar production and prices in Poland and in the EU are largely determined by the market regulation system, while the sugar market reform had little effect on increasing the interrelations between the EU prices and world prices. At the same time, the retail and selling prices are strongly interrelated and these interrelations can be non-linear.
Highlights
Sugar is presently the basic sweetener in the food economy, despite development of the market of other sweeteners
It can be concluded that the selling prices are exogenous to retail prices, the supply situation and regulatory policy determine the level of sugar prices in the country at long and short periods
The links of the marketing chain of the sugar market in Poland are characterised by much differentiated level of cointegration
Summary
Sugar is presently the basic sweetener in the food economy, despite development of the market of other sweeteners (e.g. starch syrups). The sugar industry still has great economic importance and in many countries it is considered as strategic section of the agri-food sector, which is one of the arguments for the analysis of changes in the mechanisms underpinning the changes in sugar prices. Because of the liberalisation of the world trade in agri-food products in 1995-2000, globalisation processes, reform of regulations in 2006-2010 and numerous bilateral agreements with economically developing countries, the EU and the national sugar markets are increasingly more linked to the world market (Szajner and Hryszko, 2013). Institutional and market determinants of sugar prices Sugar is one of the products that played a significant part in the global economic development This concerns changes in agriculture, food industry, foreign trade and food demand structure. The prices of processed foods containing sugar are not researched by the authors for this paper
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