Modelling export opportunities for the Hong Kong fresh fruit and vegetable market

Abstract

Hong Kong is a major importer of fresh fruit and vegetables. This paper describes a method of quantifying the economic feasibility of export schemes to supply this market. Fresh fruit and vegetable price and throughput data for Hong Kong were collated from import trade declarations for 1985–1987. An analysis of price-quantity relationships over the 3 years from 1985 to 1987 for four very different crops (lemons, onions, lettuce and avocado), supplied by three countries (USA, China and Australia), showed that the semilog form P = α + βln Q, where P = price, Q = quantity and α and β are constants, provided a good description of the relationship. Further analysis showed that competition between these countries did not have a significant effect on the price-quantity relationship. The usefulness of the semilog relationship as a predictor of prices an exporter might receive in Hong Kong was tested using exports from Australia as an example. Models were fitted for 1985–1987 and then used to predict 1988 prices. A comparison with actual prices received showed that this method can be used with some confidence.