Global Competition for the Japanese Fruit Juice Market: A Uniform Substitute Demand Analysis

Shiferaw T. Feleke and Richard L. Kilmer

No 9997, 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This study analyzes the competitiveness of countries exporting fruit juices into Japan through market structure analysis (MSA) within the context of the theory of consumer demand using the relative price version of the Rotterdam model and the block-wise dependent uniform substitute Rotterdam model. The models were estimated for six different types of fruit juices (orange, grapefruit, other citrus, apple, pineapple and grape juices imported from 18 countries) on monthly per capita data over the period December, 1995, to May, 2005, using the non-linear least squares (LSQ) in the Time Series Processor (TSP) program. Results indicate that the market structure underlying the competition for the Japanese fruit juice market is non-uniformly competitive, and most of the cross price elasticities are below one. Consequently, an exporter can't take market share from another exporter quickly through price reductions. Nonetheless, the United States and the Philippines appear to have a competitive advantage in the export of orange and pineapple juices, respectively. Brazil has the most to gain from an increase in the size of the Japanese fruit juice market. The demand for fruit juices imported into Japan is projected to increase at a decreasing rate over the next decade or so because of the absolute decline in population growth. The results of the study have important implications to countries exporting fruit juices to Japan for making marketing strategies such as price reduction, product differentiation as well as export supply plan.

Keywords: Demand; and; Price; Analysis (search for similar items in EconPapers)
Pages: 36
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea07:9997

DOI: 10.22004/ag.econ.9997

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