Estimating the demand for imported green coffee in Saudi Arabia using the Almost Ideal Demand System
Frontiers in Sustainable Food Systems
Introduction: Understanding the demand for imported green coffee in Saudi
Arabia is crucial for stakeholders in the coffee trade. This study examines how
demand varies by country of origin, focusing on Ethiopia, Brazil, India, and other
exporting nations such as Colombia, Vietnam, and Kenya. Given the growing
coffee consumption in Saudi Arabia, analyzing consumer preferences andmarket
dynamics can provide insights for importers, exporters, and policymakers.
Methods: This study employs the Almost Ideal Demand System (AIDS) model
to estimate demand elasticities for green coffee imports. The analysis considers
income and price elasticities to determine the classification of coffee imports
as necessities or luxury goods, as well as cross-price elasticities to assess
substitution and complementarity relationships between different origins.
Results: Findings indicate that Ethiopian coffee dominates the Saudi market and
is considered a luxury good with high income elasticity. In contrast, Brazilian
and other coffees exhibit characteristics of necessities, with relatively stable
demand. Indian coffee is highly price-elastic but maintains a smaller market
share. Cross-price elasticity estimates reveal that Ethiopian and Indian coffees
act as substitutes, whereas Ethiopian coffee complements imports from other
sources.
Discussion and conclusion: Projected trends suggest continued growth in
Ethiopian, Brazilian, and Indian coffee imports, while imports from other
origins may decline. These findings have practical implications for importers
and marketers, who can refine sourcing and promotion strategies, and for
exporters, particularly from Ethiopia and Brazil, who can strengthen their market
positioning. Policymakers may leverage these insights to ensure stable coffee
import flows through targeted trade policies. This study contributes to the coffee
demand literature by emphasizing the role of origin differentiation in shaping
market dynamics in Saudi Arabia’s green coffee sector.
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Introduction: Understanding the demand for imported green coffee in Saudi
Arabia is crucial for stakeholders in the coffee trade. This study examines how
demand varies by country of origin,…