COMPETITION AND COMPLEMENTARY IN THE SUGAR PRODUCTION SECTOR

Abstract

In the last quarter of the 20th century, it is possible to observe a progressive fragmentation of the world sugar sector, with a significant reduction of international transactions and a growing overproduction crisis. One of the main factors responsible for this has been the transformation of sugar, during the last decades, into an industrial raw material substitutable by others. Its substitution by products like HFCS (high fructose corn syrup) and the synthetic sweeteners is already well advanced in the most developed economies and will, with time, occur in all. Technology and technical progress are fundamentally important variables in the determination of market structures and of the performance margins of their participants. These variables haven't been sufficiently considered in the present regulation schemes, which for this very reason are also in crisis. On the other hand, it would be adviseable to reconsider the notion of sector itself, which seems clearly inadequate for studying phenomena such as competition and complementarity.