COMPETITIVENESS OF THE EGYPTIAN FRESH ORANGES OF THE EUROPEAN UNION1 MARKET AND POSSIBILITIES OF ITS IMPROVEMENT | ||||
| Journal of Agricultural Economics and Social Sciences | ||||
| Article 7, Volume 27, Issue 6, June 2002, Page 3921-3944 PDF (6.54 MB) | ||||
| Document Type: Original Article | ||||
| DOI: 10.21608/jaess.2002.255564 | ||||
 View on SCiNiTO | ||||
| Authors | ||||
| A. A. F. Abdel-Aziz,1; M. A. Sh. Omran2 | ||||
| 1Economic Department, Faculty of Agriculture, Cairo University | ||||
| 2USAID, Cairo | ||||
| Abstract | ||||
| Egypt is one of the highest ten countries producing oranges in the world. Egypt produced about 3% of the world oranges production. Egypt export of fresh oranges is only 6% of its orange production. Most of Egypt's export of orange goes to Arab countries, especially Saudi Arabia. The other small part of Egyptian orange export goes to Europe and some Asian countries. This research aims to identify the Egyptian's position among the countries of the world in orange production, export, and import businesses. The final goal of the research is to measure the competitiveness position of the Egyptian orange in the European market and recommendation for its improvement.1 The European Union consists of 15 countries. They are United Kingdom, France, Germany, Italy, Spain, Portugal, Greece, Belgium, Luxembourg, Netherlands, Denmark, Finland, Sweden, Austria, and Ireland.J. Agric. Sci. Mansoura Univ., 27 (6), June, 2002 Morocco, Tunisia and Israel are the major competitors of the Egyptian fresh orange exports to the European union market. The ratios of the fresh orange exports to the total production of orange in Israel, morocco, Tunisia, and Egypt are 40%, 40%, 22%, and 6% respectively as average of the period 1988-2000. The unit value of the Egyptian fresh orange exports is less than its respective in the three competitor countries. This means that the price is not responsible of the low exports of the Egyptian fresh orange to the EU market, i.e. non-price factors are responsible of this low export, such as quality standards, homogeneity, and environmental factors. The study measured the competitiveness position of the Egyptian fresh orange exports and its competitors to the EU market using two ways. The first way is estimating demand of the fresh orange from Egypt and its three competitors in the EU market by using a model called "Almost Ideal Demand System (AIDS)". The results of the best model was used to estimate the marginal quota of imports, which showed an increase of the EU expenditure of importing oranges by $1,000 will increase the EU imports from Tunisia by $25 and from Israel by $103; and will reduce the EU imports from Egypt by $44 and from Morocco by $385. In addition, the expenditure elasticities showed an increase in the EU demand on the Tunisian and Israeli oranges, i.e. 1 % increase in the EU expenditure on fresh orange export will increase the demand on the Tunisian, Israeli, and Egyptian fresh oranges by 4.12%, 3.14% and 1.54% respectively; and will reduce the demand on the Moroccan fresh orange exports by a very minimal ratio. Cournt price and cross price elasiticities show a competition in the selected four countries in the EU market. 1 % increase in the price of the Egyptian fresh orange exports to the EU market will reduce the Egyptian exports of fresh orange to EU market by 0.939%, which will cause an increase of 0.245% of the Israeli exports of fresh orange to the EU market. While, 1 % increase in the price of the Moroccan fresh orange exports to the EU market will reduce the Moroccan exports of fresh orange to the EU market by 0.25%, which will increase the Egyptian and Tunisian fresh orange export to the EU market by 0.241% and 0.349% respectively. 1% increase in the price of the Tunisian fresh orange exports to the EU market will reduce the Tunisian exports of fresh orange to EU market by 1.775%, which will cause an increase of 0.878% and 2.96% of the Egyptian and Moroccan exports of fresh orange to the EU market. 1 % increase in the price of the Israeli fresh orange exports to the EU market will reduce the Israeli exports of fresh orange to EU market by 5.41%, which will cause an increase of 0.964% of the Egyptian exports of fresh orange to the EU market. The second way is the Market Penetration Ratio that reflects the share of the exporting country of the available supply in an importing market. The ranking of the four countries according to this measurement is Morocco has the highest market penetration ratio to the EU market then Israel, Tunisia and Egypt. However, the aggregate market penetration ratio of the four countries is decreasing through 1988-1999. It is important to say that the conditions of the 2000 EU-Agreement is better than the 1977 EU-Agreement's conditions. Under the 1977 EU- Agreement the quota amount was 7,840 tons of fresh orange with fees of 86 ECU/ton and the market widow was three-months (January-March). However, under the 2000 EU-Agreement the quota amount is 34 thousand tons of fresh orange and the market window is six-months (December-May). Egypt has to improve the fresh orange quality standards and varieties to meet the EU-market demand standards and conditions. The quality standards include shape, size and ripeness of fresh orange. Availability of market information is very important. Control the harvested oranges for exports to be ready early October before the start of the orange season in Spain, Italy, and Greece to be benefit from the low custom fees (3.52% - 3.36%). | ||||
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