Estimating the Expected Commercial Potential of Saudi Date Exports to Middle Eastern Countries Using the Gravity Model

Abstract

Date production farms account for 10% of total income in the agricultural sector. Although Saudi exports of dates reach many countries, they are still of lower quantity compared to the size of their production. This study investigates the possibility of expanding external marketing of date exports by increasing the marketing efficiency of the existing market, which is expected to lead to increased returns. Therefore, this research uses the gravity model to identify the most critical factors affecting Saudi date exports to Middle Eastern countries. The results indicated the positivity of the per capita GDP in Saudi Arabia, the common border in influencing the increase in date exports, and the opposite effect of membership in the Gulf Cooperation Organization (GCC). In estimating the potential and expected trade capabilities with the Middle Eastern countries, the study results show that the actual value of date exports to the countries of the Middle East represents about 83.37% of its expected potential date trade, and it is possible to increase the export value by 16.63%, or USD 12.75 million. The study provides recommendations to improve date trade further.