Regulation of Ukraine’s Commodity Markets in Conditions of Emergency and Martial Law

Abstract

The economy can function both under normal and extraordinary conditions, which include states of emergency and martial law. Emergency conditions arise from time to time and can be both relatively short and sufficiently long. The functioning of the economy in conditions of emergency and martial law can include overcoming the pandemic and repelling armed aggression. The functioning of the economy in conditions of emergency and martial law requires special methods of state regulation, including on commodity markets. The purpose of the article is to determine methodical approaches to the formation of regulatory policy on commodity markets under conditions of emergency and martial law. To achieve the goal, the following tasks were set: 1) to determine the peculiarities of the regulation of commodity markets in conditions of emergency and martial law; 2) assess the effectiveness of regulatory influence; and 3) substantiate recommendations for improvement of regulatory policy. Various methods of sampling and statistical processing of information were used during the research. Data from the State Statistics Service of Ukraine, the Ministry of Finance of Ukraine, and the State Service of Ukraine on Food Safety and Consumer Protection were used for the analysis. Special attention was paid to the methods of price regulation and increasing supply in commodity markets of consumer goods. One of the main features of the functioning of the economy in conditions of the COVID-19 pandemic and martial law is the disruption of the usual supply chains of goods. There is a commodity shortage in the markets, which accelerates the growth of prices. Therefore, the main task of regulatory policy in commodity markets is to encourage supply and curb inflation. To this end, during 2020-2022, a set of measures was introduced: the procedure for starting a business was simplified, the tax burden was reduced, pricing was deregulated, exports were limited, barriers to imports were lowered, a declaration of intent to increase prices was introduced, price limits were established, etc. As a result of the conducted research, it was found: 1) high efficiency of influence on the price dynamics on the part of export restrictions and tax benefits; 2) low effectiveness of the declaration of the intention to increase the price; 3) relatively high efficiency of setting ceiling prices during a pandemic and low efficiency of this measure under martial law; 3) high expediency of introducing free prices on the markets of goods of significant social importance with high competition between suppliers; 4) great importance of the competition between suppliers to overcome shortages and price stability. In order to improve the regulatory policy in the conditions of emergency and martial law, the following recommendations have been substantiated: 1) canceling the price limits in highly competitive markets; 2) simplifying the procedure for declaring the intention to increase the price and strengthening control over its implementation; 3) creating strategic stocks of goods of significant social importance in the event of a state of emergency and war.