AN EFFECTIVE PRAGMATIC ANALYSIS OF SOYBEAN IMPORTS DEMAND IN EGYPT: IMPACT OF PRICE AND EXPENDITURE

Abstract

This study empirically analyses the demand for soybean imports from Argentina, the USA, and other countries to Egypt using the Almost Ideal Demand System (AIDS model) during the period (2001-2021). The model parameters used to calculate the Marshallian elasticities for which the own-price elasticities of soybean imports are 1.175, -0.857, and 0.101 for Argentina, the USA, and other countries, respectively. The cross-price elasticity of soybeans imported from Argentina and the USA are complementary relationships; and the soybeans imported from the USA have a substitutability relationship with other countries. Expenditure elasticities are elastic for soybeans imported from the USA and inelastic for soybeans imported from Argentina. If the expenditure on soybean imports increases by 10%, the soybeans imported from the USA and Argentina will increase by 11.23% and 7.36%, respectively. So, the research suggests that, in order to avoid becoming dependent on a small number of nations, Egypt must diversify the sources of its soybean imports. Additionally, it can lower imports in the future by boosting domestic manufacturing and using a variety of supply sources for goods That alludes to the primary innovation of the research, which is that soybeans imported from the USA have a substitutability relationship with other nations and a complementing cross-price elasticity with soybeans imported from Argentina. Keywords Soybeans, Demand system, AIDS model, Marshallian elasticities, expenditure elasticities.