Food Import Demand: Meat, Dairy Products, Eggs and Live Animals in Oman

Abstract

To develop effective food import policies, it is necessary to understand the responsiveness of consumers to factors affecting import demand. These factors include consumer response to changes in import prices and income. In this study the authors develop economic models of import demand for three main product groups in Oman: meats, dairy and eggs, and live animals. These product groups have been identified as major sources of protein for the Omani population. In addition, these products have a history of domestic production and potential for reducing dependence on food imports. The results indicate that the estimated price elasticity of demand for meat products is elastic, which implies that an increase in price Will result in a decrease in revenues for meat import businesses However, the estimated price elasticity for imported dairy and egg products is inelastic. This implies that an increase in import price will result in an increase in revenues for dairy and egg import businesses. The estimated income elasticities for meat products and dairy and egg products were found to be less than one, suggesting that they are normal goods. A one percent increase in per capita incomes Will result in a less than one percent increase in demand for imported meat, dairy, and egg products These results have economic implications for growth and development of businesses in these important food import sectors.