SUGAR PRICE BEHAVIOR AND PRICE RELATIONSHIPS AT THE MARKET LEVEL BEFORE AND DURING COVID-19 PANDEMIC

Abstract

An efficient commodity market creates a price relationship between two or more markets. This study provides an overview of the behavior of premium granulated sugar prices and the price relationship between market levels. Time series data for the period January 2018-March 2022, are used in this study. Graphical trend analysis; and cointegration analysis with Vector Auto-regression (VAR) approach to find research objectives. The research found that the price behavior of premium quality granulated sugar in the traditional market and the modern market is more dynamic than the price at the wholesaler level. The highest price spike occurred in the early period of covid-19, and several months later it returned to stability. Price behavior in traditional markets does not follow movements at other market levels simultaneously but takes some time to reach equilibrium. There is a long-term rionship (cointegration) between prices at the level of traditional markets, modern markets, and wholesalers, which contribute to the balance in the market. Market players need to take a strategic role in maintaining price balance at every level of the market in order to create an efficient and fair market.

Keywords

• price relationship
• sugar price
• wholesalers
• modern market
• traditional market
• cointegration