Abstract
A Linear Approximation Almost Ideal Demand System was used to provide more reliable and detailed information about competitive ability of the Egyptian oranges export in major markets: Russia, Saudi Arabia, Netherlands and United Kingdom. The model is estimated by iterated seemingly unrelated regression (ItSUR) estimators with adding up, homogeneity, and Slutsky symmetry conditions imposed. Significance level of estimated marginal shares, expenditure elasticities, signs of own price Slutsky parameters, and Cournot own price elasticities indicated that the model fit the data reasonably well. At the level of the average annual increase rate of the Egyptian orange exports to the studied four markets, the Egyptian orange exports have a distinguish place in all these markets, especially in the Russian and Saudi markets. Between 200-2016, this rate increased by 15.7, 8.4, 3.8 and 3.9 thousand tons in the Russian, Saudi, Netherlands and UK markets, respectively. The results of the research indicate that in case of increasing the total expenditure of oranges in the mentioned markets, the development of the marginal shares of the major four exporting sources is clearly in favor of the Egyptian exports in the Russian and Saudi markets. The high estimated expenditure elasticities of the imported oranges, 1.67 in Russia, 1.13 in Saudi Arabia, 1.08 in Netherlands and 0.71 in the UK, show that the Egyptian oranges are preferred by the customers of these four markets. The results indicate that increasing Orange expenditure by 10% will increase the demand for imports of Egyptian oranges by 10.7%, 11.3%, 11.8% and 7.1% in the studied markets, respectively. The results illustrate that the cournot own price elasticity of the imported Egyptian oranges in the Russian market is relatively high (-1.14), which means that the orange export to the Russian market is very sensitive to the price changes of its own. Other own price elasticities -0.69, -0.37 and -0.39 in the Saudi, Netherlands and UK markets, respectively, are moderate, indicating that there are other factors beside price influencing the preference of the customers of these three markets. The cross price elasticities in all four markets show that the Egyptian orange export are affected by price changes of other sources, however the major impact is due to the price changes of the South African Exports, the main competitor of the Egyptian orange export, especially in the Netherland market.
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More From: International Journal of Scientific Research and Sustainable Development
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