Does Egyptian Orange Exports Really have a Market Power in Saudi Arabia Market?

Yasser S. A Mazrou

Asian Journal of Agriculture and Rural Development, 2015, vol. 5, issue 7, 167-176

Abstract: Egypt is one of the important orange exporters and Saudi Arabia also is an important import orange market. The Saudi orange market is a main market for Egypt which has a market share that exceeds half of Saudi orange market by 55.72%. This article aims to discover the degree of market power for Egyptian orange exports and other competitors in the Saudi market and if it is considered a measure of the relative mark- up by applying Residual Demand Elasticity approach. The results show that Egyptian orange exports has just a statistically signified market power by SUR and 3-SLS and has a negative sign, which may gain monopolistic profits by the relative mark-up over its marginal cost by about 63.7% without losing any of its market share. The source of Egyptian orange exports market power is due to: 1- product differentiation where Egypt exports navel orange most its export season compared with sweet orange which exported from other competitors. 2- Saudi Arabia Market demand characteristics which reflect on the consumers preference for Egyptian oranges.

Keywords: International trade; market power; residual demand elasticity; fresh orange; KSA; Egypt (search for similar items in EconPapers)
Date: 2015
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