Cyclical fluctuations on the global sugar market in the context of the war in Ukraine

Abstract

PURPOSE: Economic activity is subject to business cycle fluctuations. Business cycles can affect the entire economy as well as specific sectors. This is the main aim of this article.

DESIGN/METHODOLOGY/APPROACH: In the economic history of the world, sugar is recognized as one of the first global products, and this was determined by foreign trade turnover. The world sugar market has always been subject to cyclical economic fluctuations, which have been determined by the political situation or the situation in the energy commodity market.

FINDINGS: Between 2019 and 2023, situation on the world sugar market showed high volatility, and this was determined by the COVID-19 pandemic and the war in Ukraine. Changes in the global sugar market climate, as reflected in price volatility, have a major impact on regional markets.

PRACTICAL IMPLICATIONS: The sugar sector is economically and strategically important, as sugar remains the primary sweetener in households and the food industry. In addition, sugar cane and sugar beet can be processed into bioethanol, and by-products can be used for feed or biogas production.

ORIGINALITY/VALUE: Consequently, the analysis of economic fluctuations in the world market has huge implications for sugar companies and trading companies in the context of strategic decision-making. Between 1990 and 2024, the business cycle on the world sugar market shortened to two to three years compared to earlier periods and production and trade risks have increased as a result.