The Challenges of Sugar Market: An Assessment from the Price Volatility Perspective and its Implications for Romania

Commodity Price Volatility during and after the Economic Crisis – Implications for Romania

“…However, in South East European Journal of Economics and Business recent years, 2010 and especially 2011, the volatility on the Romanian market became more acute than the international one. These findings are in accordance with those provided by Rovinaru, Rovinaru and Pop (2012) and Pop, Rovinaru and Rovinaru (2013) for the combustible market and, from the agricultural perspective, for cereal and sugar markets. These findings come as proof of the fact that Romania is currently experiencing more severely the consequences and aftermath of the crisis, while also highly affected by turbulence in the euro area and the sovereign debt crisis; moreover, it is also facing a period of turbulence and internal problems that deepen the volatility context in comparison with the international market.…”

“…Regarding the Romanian market, this kind of approach in commodity price modeling has been applied by Pop and Ban (2011), who used EGARCH for modeling the price of wheat in order to estimate volatility and price risk, both on the Romanian and international markets. As part of a larger investigation of price volatility on the Romanian market, an investigation which also includes the present paper, Rovinaru, Rovinaru and Pop (2012) estimated and compared the price volatility on the Romanian and international combustible markets, while Pop, Rovinaru and Rovinaru (2013) analyzed price volatility at a deeper level, investigating the cereal and sugar markets.…”

Does the VHP Sugar Price Influence in the Ethanol Volume Production?

“…Right after the peak, we observe a decrease due to the world production increase. This scenario is in accordance with the international market [1,5].…”

“…Brazil, for instance, has become the greatest producer and exporter of sugar worldwide. Since the 1970s the country has responded to an average of 45% of the world's exportations [1]. Moreover is a pioneer on ethanol production as a vehicular fuel [2] using a blender with gasoline (25% ethanol anhydrous and 75% gasoline) and pure (hydrous ethanol) [3].…”

“…In an overall view, the existence of this system makes that Brazil sugarcane agro-industry preferably concentrates its production on sugar (more profitable), what makes the ethanol a secondary product in this process. Nonetheless, the increase of the flex fuel cars and the current eco-friend pressures for the clean energy creation has resulted in an increase in ethanol demand and forced mills to reconfigure its priorities [1,5].…”