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Demand and Supply Theory for Sugar

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Published: Mon, 19 Mar 2018

Sugar is refined sugar from cane and beet molasses squeeze made. Sugar in the production, packaging, transportation, storage process, it is easy to contaminate the pathogenic microorganisms. Especially to store more than one year, the color yellow sugar, often contaminated meats. According to the experiment, from 500 grams of sugar, he even checked out 15,000 mites. If people eat sugar was contaminated mites, parasitic mites enters the digestive tract, causing abdominal pain, diarrhea and other symptoms, and some even cause allergic reactions. If the infant or elderly foods directly into the pollution raw sugar, probably due suffocation and other mites into the lungs and cause asthma or hemoptysis, complicated by bronchitis or pneumonia and easily.

Sugar, divided into two categories, namely, sugar, white sugar and cotton. White sugar is sucrose crystals, generally more than 99.8% purity, from a chemical point of view, this is a very pure substance. White sugar has a pure sucrose sweetness, in addition to direct consumption, but also the main varieties of industrial sugar. Cotton, sugar, cane sugar is fine grains are wrapped in a layer of invert sugar syrup made of, its purity and white sugar considerably. Here invert sugar plays a soft, flavored, functions as a co sweet. This is because the invert sugar having a honey-like scent (the main component of honey is invert sugar) which is greater than the sweetness of sucrose (sweetness of sucrose is 1, the conversion of sugar sweetness 1.2), invert sugar than the ability to maintain a strong absorption of sugar pills soft, so soft sugar taste better than white sugar. Soft white sugar optimum direct human consumption, it is preferred to eat cold drinks cold, but not used to make advanced pastries.

Sugar is one of the main source of nutrition for the body, the body’s consumption of thermal energy produced should be maintained after glucose oxidation, the energy needed by the body activity by about 70% of the sugar supply. Sugar nutrients, but should be controlled within a certain number range. In the end how much sugar a person the right of foreign opinion more consistent day to eat are: daily per kilogram of body weight control in about 0.5 grams. That is, the weight of 20 kg per day for children less than 10 grams, 60-kg adult, about 30 grams per day. So, usually to grasp the amount of sugar in food, in order to avoid over-feeding.

Depending on the process of sugar, cane sugar, white sugar and carbonation curing can be divided into sugar. Because sugar carbonation shelf life longer, better quality, the price is relatively high sugar cure.

Sugar sulfide, sulfurous clarifying technology is a typical pure juice and syrup decolorization method in the production of industrial sugar, because the law has less equipment, process is relatively simple, easy to manage and so on. However, with carbonic clarifying technology comparison, due to the soft process of clarifying the main workers rely on calcium phosphate and calcium sulfate to adsorb impurities in the juice, syrup and sulfur bleaching effect are based on the principle of the reduction reaction, therefore, Asia sulfuric acid produced sugar white sugar quality is often poor, long after the home as well as yellowing phenomenon. In general, the sulfite method of sugar production of white sugar sucrose products are likely to meet the requirements of the physical and chemical indicators, only individual, non-sugar index can not meet the requirement, which is Sulfitation sugar white sugar causes of poor quality. Thus the color values of white sugar production up to about 150IU, even more than 200IU high. Obviously, to improve the quality of Sulfitation sugar, white sugar is bound to reduce the value of the product color.

Carbonized sugar, sugar carbon method features: with lime and carbon dioxide as a clarifying agent to clarify the method is called carbonation juice with carbonated process production of sugar called carbonation sugar, also known as carbon (acid) method sugar. Carbonate produced using sugar, in addition to more than a non-glycoside Shakespeare sulfuric acid method, the obtained high purity refined sugar, lower color values, less sulfur, can be stored for a long time without discoloration. However, the carbonation process is more complex, required more machinery and equipment, consumes a lot of lime and carbon dioxide, and thus a higher cost of production.

As agricultural products, national sugar production will inevitably be affected by floods and droughts and other natural disasters, weather, natural disasters in recent years, the impact on sugar production is particularly evident. Climate. Sugarcane in the growing season with a high temperature, light intensity, water demand, absorption of fat and more features, therefore, constitute the climatic resources of heat, light, water and other conditions have a special dependency. Droughts, floods, high winds, hail, frost and other weather have low impact on the growing disaster in sugarcane, and this effect is long-term, once formed. At the end of 1999 in the main producing areas of frost China cane occurred, allowing rotation germination rate decreased, resulting in the 1999/00 sugar production more than 200 million tons of sugar.

With international oil prices rising, some countries to reduce dependence on oil joined the search for sugarcane ethanol and other bio-system alternative energy, sugar cane is no longer solely as an agricultural product, the sugar market has become increasingly look as an energy product, oil price changes affect not only the global economic situation, the impact of international shipping, but also the influence of alcohol production, thereby affecting the global sugar production. Therefore, the oil price changes will inevitably affect the trend of sugar prices.

According to demand theory, demand is the number of goods bought at a particular place and time with the current price and time. If an item on the demand is affected by its own price (P), income level (Y), and the price of other commodities (X), and assuming a constant elasticity of demand, the demand can be exponentially mathematically expressed in terms of a demand function as Eq.

When prices rise, demand reduction, there will be more suppliers, and lead to increased supply. This concept actually refers Supply Act. Supply Act refers to suppliers more willing to sell more products at a higher price, rather than at a lower price. It also said that these suppliers will try to increase production in that period, in order to increase their profits. For example, when the price of sugar is increasing, the quantity demanded will be decreasing while the quantity supplied will be increasing as well.

There are indications that demand factors explain why sugar is inelastic. First, complementary products. Complementary products such as sugar are often flexible. For example, if the sugar prices, the demand for coffee will decrease. Coffee changing demand curve to the left. It is the price of sugar, because they need to demand a negative correlation between coffee each other at the same time.

There are other factors that will affect the elasticity, such as the substitution of the closeness, the proportion of income spent on the good, the time elapsed since the price change. First, substitution of the approximation degree. Sugar is a necessity of goods, it has a weak alternative, therefore considered inelastic demand. Second, the proportion of income spent on good. We spend a very small proportion of sugar daily income. Thus, sugar is inelastic demand. Finally, the time, because the price changes through. Elasticity of demand depends on whether the value of the sugar can live a very long time. In this case, the sugar is inelastic, and therefore a greater elasticity of demand. Instead of sugar, for example, in a long time, consumers will find, because they have no choice but to set the price.

When the high sugar prices, supply will be higher, and because providers can earn more profits, while demand will be lower. Therefore, it would result in a surplus of graphics. When there is a surplus of supply over demand, excess quantity quantity certain price. In surplus supply and demand curves represented by the above equilibrium price point. When the presence of excess product oversupply buyers to choose from, you may pay less for goods and services. For sellers, they are working with other suppliers to compete for customers and their prices will fall, but also their sales.

Sugar prices, sugar subsidies due to the Malaysian government. Government subsidies are paid to producers by reducing the price paid by the buyer, the seller increases the price received. There are effects of subsidies, such as falling prices and increasing supply. Subsidies to reduce the price of sugar and increase the supply of sugar. In addition, the government paid to the supplier. Government subsidies to pay for each ton of sugar suppliers of sugar. For example, suppliers to increase their supply of 60 million tons of sugar a year receive $ 20 a ton of subsidies. Suppliers receive payments from the government.

The government is using the concept of price ceiling to control the sugar market. According to the following chart, the price ceiling is below the equilibrium price set by the government price. Government price ceiling for the sugar market applications for several reasons. First, in order to prevent the black market. The illegal black market is a market equilibrium price exceeds the ceiling price. For example, some suppliers may sell their products and buyers above the government-set price.

Most foods contain sugar, so sugar prices will directly affect the price of food and other indirect effects of rising prices. Because most of the time, businesses will be because some products from government control and the opportunity to adjust the price of the goods. Recently, Malaysia, rising prices, people attracted a lot of criticism, seafood, vegetables, gasoline, transportation, postal services, etc., are the price a lot. Because the level of inflation in Malaysia has reached a new high in six years. Consumer Price Index, referred to as the CPI rose 3.2%, mainly due to food and non-alcoholic beverages and transport prices.

(Refference : http://www.statistics.gov.my/portal/index.php?option=com_content&view=article&id=2267%3Aconsumer-price-index-malaysia-january-2014-updated-1922014&catid=48%3Aconsumer-price-index-malaysia-&lang=en)

Consumers in Malaysia, there are a variety of menus for their daily diet, sugar is the most important asset, it’s a. Therefore, the sugar market is an important factor in the Malaysian economy.Sugar is needed in life, so the sugar industry is very important. In addition, the evolution of the food processing industry leads to the expansion of the sugar industry. Recently, the Malaysian government has decided to cancel or reduce sugar subsidies. Opening in 2010, the government began to reduce sugar subsidies, which will lead to an increase in sugar prices. There are two parties who damaged; consumers and food vendor.

When the study has been completed, the results show that the food sellers had to increase the price of its products, but not directly because of the price of sugar. Price increase is due to rising prices of other products. The removal of subsidies to the sugar industry led to increased product prices by the government, as well as sugar. Reduce food sellers income. Shortage occurred because the industry tends to use sugar, sugar prices from wholesalers to buy cheaper than buying from the sugar industry itself. Consumers and sellers of food from the impact of the shortage.

In addition, the increase in sugar may occur again in the next time, because the government wants to gradually reduce the price of sugar subsidies. Therefore, through this research, I can educate the community to prepare for the consequences they may face in the future.

Sugar is an inevitable product does not replace sugar, so it’s elasticity of demand. However, the sugar market does not follow the law of demand. In order to explain the reasons for the increased demand for sugar, and even raised the price because of the situation in various parts of Malaysia. Consumers worried the government will once again raised the price of sugar. Thus, in the first case, demand is inelastic, however, increased again when the sugar, sugar market that it is slightly returned to normal, although it still does not follow the law of demand.

The Government should be aware that could lead to food retailers and should recognize that consumers face problems affecting the country. Consumers should be aware of the burden faced by food retailers, do not blame them, when the price of their products increases. Perhaps consumers will reduce consumption and increase imports of good local good consumer, rather than helping the country.

As a conclusion, sugar has a very broad topic to talk about, especially in Malaysia, where the sugar supply and demand, price ceilings and subsidies and price elasticity of sugar can be linked together in the economic field. Brought a lot of influence from the government-imposed policy to the sugar industry in Malaysia, such as the price ceiling. Until today, the price of sugar in Malaysia is still relatively low compared with other countries, because the price ceiling and sugar subsidy policy. However, the low price of sugar in both leaded and lead to high consumption of sugar diabetes. To create a healthy lifestyle, the Government proposes to cut subsidies and educate the people by consuming less sugar to create a healthy lifestyle.

I think, the incremental price of sugar can positively and negatively affect consumers. This is a positive effect, because as prices rise, demand reduction of sugar consumption has done. Excessive intake of sugar harmful. In Malaysia, the prevalence of overweight and obesity has been on the rise, and even children were reported to be obese in the past few years. For example, the US government imposed restriction sugar American consumers. This allows the American people to buy sugar for a cheaper price, so that they consume a lot of this year a total of up to 150 pound average sugars. They not only suffer from the financial burden of health care, but also for the health care burden. In contrast, the negative effects of sugar increment that consumer spending will increase. This is because the consumer’s willingness to have to spend more money to buy sugar, and its complementary products, such as sweetened condensed milk and soft drinks.

Incremental demand for sugar can cause by population, income and food consumption of consumer preferences. Changes in sugar prices are due to push prices higher, in order to satisfy the equilibrium price and quantity to meet the buyers and sellers of market forces. In addition, increasing the price of sugar can help people by reducing sugar intake to control their sugar consumption. However, the high price of sugar to the burden on consumers to increase their spending on food expenditure in terms.

(2517 words)

References:

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-High sugar prices hit MSM bottomline – Business News | The Star Online. (n.d.). Retrieved March 1, 2015, from http://www.thestar.com.my/Business/Business-News/2013/03/05/High-sugar-prices-hit-MSM-bottomline/?style=biz

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