PEMicroeconomics Supply and demand chain presentation slides

WELCOME TO OUR PRESENTATION PRINCIPLES OF ECONOMICS Lecturer: Kinwah Lo MARKET SUPPY AND DEMAND What is your choice? ABOUT US WE ARE AWESOME ECONOMISTS PHAM THI TUYET TRANG WSU21000098 LAO TINH NGHI ISB21000052 NGUYEN lAN HUONG B1112014471 NGUYEN LANG GIA LINH B1112014491 TRINH NGOC NAM KHANH B1112015482 C O F N O T E E L N T B S A T 02 01 INTRODUCTION MARKET SUGAR 03 MARKET FAST FOOD COFFEE PLEASE 04 MARKET COFFEE 05 CONCLUSION 01 INTRODUCTION Why is it important to study demand and supply model? It helps with pricing and buying decisions a better-informed consumer and a strategic producer Better predict the future and plan for what might come It’s difficult to comprehend how this concept plays out in businesses around the world SUGAR MARKET Real-life examples FAST FOOD MARKET COFFEE MARKET 02 MARKET 1: SUGAR A MARKET OVERVIEW Sugar production in the European Union is expected to fall dramatically in 2019/20 as farmers consider reducing plantings and moving to other crops due to low prices (Ionova, 2018) B CHANGE IN SUPPLY: Exogenous variables: A ban on neonicotinoids Decreased cultivated area Dry weather in many sugarproducing regions => Decrease EU sugar supplier Price P2 S2 S1 E2 E1 P1 D Q2 Q1 Quantity Future Market: According to Gebhard, reducing production by at least 20% is the best strategy for reviving prices (Ionova, 2018) 03 MARKET 2: FAST FOOD A MARKET OVERVIEW Fast food is a substitute for home-made meals The fast food market growth is mainly related to the workforce looking for easy, cheap, and fast options B CHANGE IN DEMAND Price S Decrease in the number of customers P1 The demand curve shifts to the left P2 E1 E2 D1 D2 Pe and Qe decrease Q2 Q1 Quantity C CHANGE IN SUPPLY Downstream value chain International shipping Internal logistics networks Local currency devaluations Upstream value chain Poor harvest prospects Labour supply Input price Technical assistance access Interest rates on fresh credits C CHANGE IN SUPPLY Downstream value chain Difficulties in International shipping Restricted lockdown High transportation cost Lower stocks for export E.g: Export Coffee in March=11.06M -> 3.7% lower than 2019 (ICO, 2020) Pe increase, Qe decrease C CHANGE IN SUPPLY Downstream value chain Difficulties in Internal logistics networks (ICO, 2020) Pe increase, Qe decrease C CHANGE IN SUPPLY Downstream value chain Local Currency devaluations Coffee price lose against the US dollar E.g: the Brazilian real lost around 15% against the US dollar in the first quarter of 2020 (ICO, 2020) Pe increase, Qe decrease C CHANGE IN SUPPLY Downstream value chain Price S2 Difficulties in International shipping Difficulties in Internal logistics networks Local Currency devaluations P2 S1 E2 E1 P1 D Pe increase, Qe decrease Q2 Q1 Quantity C CHANGE IN SUPPLY Decrease in Labour supply Upstream value chain Poor harvest prospects E.g: bad weather in Brazil Inventories were running low Pe increase, Qe decrease (ICO, 2020) (ICO, 2020) C CHANGE IN SUPPLY Increase in Input price Upstream value chain Decrease in Technical assistance access Obstruction in Technical assistance Reduce supply quantity Pe increase, Qe decrease C CHANGE IN SUPPLY Interest rates on fresh credits Reducing farmers’ use of fertilizer and pesticides Raise production costs and limit credit access Pe increase, Qe decrease Upstream value chain C CHANGE IN SUPPLY Upstream value chain Decrease in Labour supply Upstream value chain Price Poor harvest prospects P2 Increase in Input price S2 S1 E2 E1 P1 Decrease in Technical assistance access Interest rates on fresh credits Pe increase, Qe decrease D Q2 Q1 Quantity Conclusion Supply curve shifts to the left Demand curve shifts to the left Demand and Supply curve shift to the left REFERENCE LIST Bohlouli, J., Moravejolahkami, A R., Dashti, M G., Zehi, Z B., Kermani, M A H., Borzoo-Isfahani, M., & Bahreini-Esfahani, N (2021) COVID-19 and Fast Foods Consumption: a Review Retrieved from: International Coffee Organization (2020) ANNUAL REVIEW COFFEE YEAR 2019/ 2020 Retrieved from: International Coffee Organization (2020) Coffee Break Series No.1: IMPACT OF COVID-19 ON THE GLOBAL COFFEE SECTOR: THE DEMAND SIDE Retrieved from: International Coffee Organization (2020) Coffee Break Series No 2: Volatile coffee prices: Covid-19 and market fundamentals Retrieved from: International Coffee Organization (2020) Coffee Break Series No.3: IMPACT OF COVID-19 ON THE GLOBAL COFFEE SECTOR: SURVEY OF ICO EXPORTING MEMBERS Retrieved from: Ionova, A (2018) EU sugar output could drop further as growers turn away from beet Retrieved from: