The Effect of Supply and Demand on Sugar Production Indonesia

Sugar is a vital commodity in Indonesia, serving as a staple ingredient in households and industries. The interplay of supply and demand significantly impacts sugar production, influencing prices, farmer incomes, and national food security. Comprehending these factors assists policymakers and stakeholders in devising strategies for a stable and sustainable sugar industry. Sugar is a staple foods that plays an important role in the Indonesian economy because Indonesia is one of the countries that produces granulated sugar, but still imports it every year. among the staple food that holds a significant role in the Indonesian economy since Indonesia is one of the countries that produce granulated sugar but still import it annually. This study aims to: (1) determine the demand trend for granulated sugar in Indonesia, (2) ascertain the supply trend of granulated sugar in Indonesia, (3) identify the gap between supply and demand trends for granulated sugar in Indonesia, (4) analyze the factors influencing demand for granulated sugar in Indonesia, and (5) examine the factors affecting the supply of granulated sugar in Indonesia. This study employs descriptive methods, cause and effect analysis, and a quantitative approach utilizing secondary data. The study was intentionally conducted in Indonesia, considering that Indonesia is among the countries that produce granulated sugar but still import it annually. The data utilized is secondary data sourced from various channels. The analysis methods employed include trend analysis and multiple analyses of the Cobb-Douglas model. The results of the study concluded that: (1) the trend of demand for granulated sugar in Indonesia is increasing, (2) the trend of supply of granulated sugar in Indonesia is increasing, (3) the trend of the gap between supply and demand for granulated sugar in Indonesia is increasing, (4) factors that significantly influence the demand for granulated sugar in Indonesia are the price of granulated sugar, the price of tea, the price of ground coffee, while factors that do not significantly influence are the price of brown sugar, population, per capita income. (5) Factors that significantly influence the supply of granulated sugar in Indonesia are the farmer's benchmark price, the price of granulated sugar, and the price of SP-36 fertilizer.