MODEL OF CONTROLLING SUPPLY-DEMAND EQUILIBRIUM OF WHITE SUGAR COMMODITY BY TAKING ACCOUNT OF INTER REGIONAL TRADE FLOW
White sugar is an important commodity for many people. Due to its importance, government has to control its availability in an equilibrium condition. However, the quantity of supply and demand is not always in this condition (in one region or inter regions). As a result, price will be volatile in so...
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| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/15200 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | White sugar is an important commodity for many people. Due to its importance, government has to control its availability in an equilibrium condition. However, the quantity of supply and demand is not always in this condition (in one region or inter regions). As a result, price will be volatile in some regions caused by an unbalancing of supply-demand quantity. There are two programs implemented by the government to overcome price volatile and unbalancing of the commodity, through price support and price stabilization programs. In the first program, the government buys commodities from the surplus region (so that equilibrium of supply-demand is reached and the price will rise) and sets a price band (minimum price). This can protect producers from a falling price. In the second case, the government sells commodities to the deficit region (so that equilibrium of supply-demand is reached and the price will fall down) and sets a price band (maximum price). It can protect consumers from a rising price.<p>This research developes Spatial Price Equilibrium (SPE) Model of Nolte (2007) and Buffer Stocks of Sutopo, et al. (2008). The concept of SPE is used to solve the excess supply and excess demand of the sugar commodity for the case of a single product in the two regions, namely region 1 and region 2. Sutopo, et al. (2008) model gives a concept of how to determine price band on a government's price intervention. The objective function of this research is to maximize total benefit for the producers, the consumers, and the government. The constraints used are demand, supply, price, and government stock. In this research, there will be 4 periods (the beginning of harvesting, the end of harvesting, the begining of planting, and the end of the planting season) and 2 regions mentioned above that can show the condition of supply and demand in each region. There will also be three supply price elasticities (0,20; 0,25; and 0,30) which can show the influence of supply and equilibrium price changes. |
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