Future Development of Sugar Market in the European Union in the Period 2023–2032

The European Union is the world’s largest producer of sugar beet and one of the main consumer markets in the world. The EU market is very specific as for 50 years, it was one of the most regulated markets in the agri-food sector. For more than three decades, the Union maintained an extremely costly supply management regime in its domestic sugar market through heavy price support and import duties. This system resulted in domestic prices being three times higher than the world market prices and a surplus of production, which could only be exported thanks to substantial subsidies. The aim of this article is to identify the trends and determinants of the EU sugar market to predict its future development as accurately as possible. The research method used is a two-equation econometric model determining the supply of sugar and its price on the European Union market. The results of the econometric model show that sugar supply in the EU market is determined by the volume of sugar production, initial sugar stocks, import of raw sugar, and sugar beet yield per hectare. Furthermore, the model implies that the price of sugar is determined by the sugar price in the previous period and by political changes. The econometric model served as a basis for the calculation of predicted volume of sugar supply and sugar prices inside the European Union. The prediction implies that between 2023 and 2032, sugar supply will decline by 4.5%. At the same time, the price of sugar on the EU market will increase by 11.5% in the period considered.