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    Demand and Supply Analysis For Pakistan Sugar Market

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    Nayem Uddin Hoque Tusher
    The document analyzes the demand and supply of sugar in Pakistan. It finds that demand for sugar has a positive shift and price elasticity is below 1, meaning demand increases even as price rises. The main factors affecting demand are population, income, and prices of substitutes. Supply has decreased since 2017. A regression model finds the key determinants of supply are previous period's sugar price and sugarcane plantation area, with prices and area both positively correlated with supply.

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    Demand and Supply Analysis For Pakistan Sugar Market

    Uploaded by

    Nayem Uddin Hoque Tusher
    47 views2 pages
    The document analyzes the demand and supply of sugar in Pakistan. It finds that demand for sugar has a positive shift and price elasticity is below 1, meaning demand increases even as price rises. The main factors affecting demand are population, income, and prices of substitutes. Supply has decreased since 2017. A regression model finds the key determinants of supply are previous period's sugar price and sugarcane plantation area, with prices and area both positively correlated with supply.

    Original Description:

    The shift in the demand curve, factor influencing the production of sugar in pakistan.

    Original Title

    Demand and Supply Analysis for Pakistan Sugar Market

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    The document analyzes the demand and supply of sugar in Pakistan. It finds that demand for sugar has a positive shift and price elasticity is below 1, meaning demand increases even as price rises. The main factors affecting demand are population, income, and prices of substitutes. Supply has decreased since 2017. A regression model finds the key determinants of supply are previous period's sugar price and sugarcane plantation area, with prices and area both positively correlated with supply.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    47 views2 pages

    Demand and Supply Analysis For Pakistan Sugar Market

    Uploaded by

    Nayem Uddin Hoque Tusher
    The document analyzes the demand and supply of sugar in Pakistan. It finds that demand for sugar has a positive shift and price elasticity is below 1, meaning demand increases even as price rises. The main factors affecting demand are population, income, and prices of substitutes. Supply has decreased since 2017. A regression model finds the key determinants of supply are previous period's sugar price and sugarcane plantation area, with prices and area both positively correlated with supply.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Pakistan Sugar Market

    Demand and Supply Analysis

    Demand Curve
    80000.00
    70000.00
    Sugar Retail Price Per MT

    60000.00
    50000.00
    40000.00
    30000.00
    20000.00
    10000.00
    0.00
    0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000
    Sugar Demand in MT

    Figure – 1: Demand Curve

    Supply Curve
    80000.00
    Sugar Retail Price MT

    70000.00
    60000.00
    50000.00
    40000.00
    30000.00
    20000.00
    10000.00
    0.00
    0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000
    Sugar Supply in MT

    Figure 2: Supply Curve

    Demand curve depicts that the change in demand is not a linear factor of price. Demand curve
    has a positive shift. Data from 2004 to 2020 shows that the average price elasticity is .2842 which
    means that sugar demand increases even if the price increases (Figure 3). Factors that shift the
    demand curve for sugar causing a different quantity to be demanded at any given price,
    include changes in tastes, population, income, prices of substitute or complement goods, and
    expectations about future conditions and prices. In contrast supply of sugar has been decreasing
    gradually since 2017.

    Price Elasticity of Demand


    2.5

    1.5

    0.5

    -0.5

    -1

    Figure 3: Price Elasticity of Demand

    SE t Stat P-value
    Intercept -6667597.5541 921318.6151 -7.2370 0.0000
    Sugar retail price per MT 33.5403 6.0660 5.5292 0.0001
    Sugarcane Plantation area in hector 8.7593 0.8357 10.4808 0.0000
    R-square 0.9252
    Adjusted R-square 0.9137
    Standard Error of Regression 374325.5538

    The main determinants of the supply of sugar in the Pakistan market can be considered to be
    comprised of the following factor - the price of sugar and the area on which sugar cane and sugar
    beets are grown. The sugar supply models were drawn up that describe the effect of the selected
    determinants in the supply. The coefficient of determination of this model achieves a value of .925
    and all of the estimated parameters are statistically significant at a significance level of 1%.
    Estimated function of the sugar supply:
    Sp = -6667597.5541 + P(t-1) * 33.5403 + A * 8.7593

    Where,
    Sp .......is the supply of sugar in Pakistan market (mt);
    P(t−1)…..is the price of sugar in the previous period (mt);
    A ......is the area of sugar beets grown (ha).

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