APPLICATION OF THE BOX-JENKINS : MODELING OF THE SUGAR PRODUCTIVITY FOR THE SUDANESE SUGAR COMPANY.

Abstract

The research aims to study and analyze the current situation of sugar production in the Sudanese Sugar Company during the period 1963-2003, and assess the demand gab between production and consumption and providing a forecast for sugar production for the period 2004-2010. The research adopts descriptive as well as modeling approach. The descriptive part was based on describing the research variables that affect sugar production during the period of the study in order to highlight the most important features of these variables. While the modeling part used Box-Jenkins Time Series Model, particularly Auto Regressive Moving Average (ARMA) model to explain the trends of sugar production. The most important findings of the research are the following: 1. Sugar production series are non-stationary which indicates that sugar production has been affected by so many factors. 2. The most appropriate model for explaining sugar production is Auto Regressive Moving Average ARMA (1, 1). 3. There is positive significant relationships between sugar production and the area cultivated, capital, water irrigation, working a cultivation days which means that in order to satisfy the increasing demand for sugar, there should be more areas introduced. 4. The sugar demand is expected to increase dramatically during the next five years and that is due to the sustainable growth in the soft drinks market . 5. The study conclude that, the average demand gab as follows, 113, 168, and 54 tons, for the periods 60's, 70's and 80's respectively. 6. With the exception of 1990/91, situation of the sugar witnessed surplus instead of a deficit amounting to 160 tons in1998/99, however starting in 2000 the situation goes back to a deficit of 60 tons. The research recommends that invest laws in Sugar industry should be made conducive in order to attract foreign investment in Sugar industry, and also research in Cane varieties should be encouraged for more productive type of cane.