Maximizing the economic return from Egypts export of the most important vegetable crops in the foreign markets

Abstract

This study is set to examine the possibility of maximizing the returns of Egyptian vegetable exports: fresh potatoes, onions, and tomatoes, through the optimal distribution of exports to international markets. Linear programming model is formulated to determine the optimal distribution of exports among the importing countries. This model is restricted by export capacity, import capacity, and suggested organization constraints, determining the optimal plan for various scenarios. The mathematical analysis is based on secondary data from the Central Agency for Public Mobilization and Statistics of Egypt and the United Nations Comrade Database for the period of 2010- 2014. The model solution is obtained using the General Algebraic Modeling System (GAMS). The results show that the major export markets for Egyptian potatoes are Russia, Italy, and Germany, representing altogather about 69% of Egyptian exports. For Egyptian onions, Saudi Arabia, Kuwait, Jordan, and Syria together accounted for 77% of the total exported quantity. For Egyptian tomato exports, Syria, Saudi Arabia, Libya, and Iraq accounted for 85% of the total tomatoes exports from Egypt. The results of the various scenarios showed that there is a prospect to increase the Egyptian export returns through geographical re-distribution of exports from potatoes, onions, and tomatoes. Under the capacity of export-import constraints (Scenario No. 1), the total export value would increase by 19.26, 33.95 and 45.30% for potatoes, onions, and tomatoes, respectively. Under countries group constraint (Scenario No. 2), the export value increases by 12.67, 26.49 and 35.85% for these crops, respectively, more than the current export values. Under the suggested model (Scenario No. 3), the export value would increase by 9.56, 25.45 and 25.26% for potatoes, onions, and tomatoes respectively, much more than the current values of exports. Egyptian exports of potatoes would be directed to many countries: the United Kingdom, Greece, Italy and Russia. For onions, higher quantities would be exported to Saudi Arabia, Kuwait, Belgium, and Romania. The most important export markets for Egyptian tomatoes would be Iraq, Italy, Syria, and Saudi Arabia. The study recommends to re-distribute the Egyptian exports of vegetable crops in the international markets to maximize export returns. These models can be used as a tool for the Egyptian decision makers about optimum export distribution for export development. Key words: Optimal geographic distribution, export development, linear programming, optimization technique.