THREE ESSAYS ON SAUDI ARABIA AGRICULTURAL MARKETS

The first essay compares six common models, linear, quadratic, Cobb-Douglas, translog, logarithmic, and transcendental, to estimate wheat yield and area functions for Saudi Arabia. Data cover 1990-2016 for all the variables that affect wheat supply. After testing the models using Box-Cox, multicollinearity, and autocorrelation tests, we decide that the Cobb-Douglas models provide the best fit for both yield and area. We find the price elasticity of wheat is inelastic. Yield price elasticities are more inelastic than area elasticities. The impact of government policy number 335 has a larger effect on area than yield. The cultivated area of wheat, the one-year lag of yield, and the number of machines per hectare are the most influential factors affecting wheat yield. The primary factors influencing the area models are a one-year lag of both cultivated area and yield, as well as the number of machines per hectare. The second essay estimates the residual demand elasticity that rice exporters face in Saudi Arabia. The inverse residual demand methods, as proposed by Reed and Saghaian 2004, are used for rice exporters to Saudi Arabia during the period 1993-2014. Estimation results of the elasticities of the residual demand indicate that Australia, India, and Pakistan enjoy market power, while Egypt faces a perfectly elastic demand curve. We find Thailand and the US had positive inverse residual demand which means they also have no market power. The last essay is about the virtual water trade in Saudi Arabia. Using the concept of virtual water introduced by Allan 1994 and developed by Hoekstra and Hung (2002), we estimate virtual water trade for 20 crops of Saudi Arabia during 2000-2016. Our result shows the average virtual water trade was 12.5 billion m3/year. Saudi has net virtual water imports, with the most significant virtual water imports coming from cereals & alfalfa and vegetables; and there is net virtual water export of fruit. Saudi virtual water trade reduces pressure on water resources by 52%. Distance plays a role in Saudi virtual water export; we found that more than 90% of exports go to neighboring countries, including 45% to GCC countries. More than 30% of virtual water imports come from Europe. A Gravity model is used to investigate whether water scarcity variables influence trade. We compare the OLS, Fixed effects, Random effects, and PPML estimators to get the best model. The AIC, and tests for multicollinearity, and heteroskedasticity assist in determining estimation procedures and the final models. We cluster the errors by distance to improve the specific country effect variables such as economic mass variables. For the cereals and alfalfa group, we find that water-related variables influence virtual water imports of cereals, millet, sorghum, corn, barley, and sesame. Therefore, we suggest that a basic gravity model be applied to the other crops. In the vegetable group, we find that related water variables impact virtual water trade for all crops except marrow. Dates are the only fruit crop that are not influenced by the water-related variables

Measuring the Intensity of Competition among Rice Exporters to Saudi Arabia

The objective of this research is to estimate the residual demand elasticity that rice exporters face in Saudi Arabia. We conducted an empirical exercise to assess the intensity of competition in Saudi Arabian rice import market during the 1993-2014 period. A model using the inverse residual demand method was specified and estimated. Estimation results show that Australia, India and Pakistan, acting as exporters, exercise market power and maintain marketing margins throughout the study period

The impact of the green Middle East initiative on sustainable development in the Kingdom of Saudi Arabia

Using econometric analysis, this study intended to determine the influence of the Green Middle East Initiative on sustainable development in the Kingdom of Saudi Arabia from 2000 to 2020. This research yielded a number of findings, the most important of which are: The country has tended to reduce carbon emissions by increasing natural gas use and decreasing diesel and crude oil use in electricity generation. The real per capita income increased by 0.8 percent annually due to the unpredictability and instability of the economic growth rate. The Human Development Index has similarly risen, from 0.744 in 2000 to 0.855 in 2020. It was also discovered that a 10% increase in domestic refined petroleum product consumption results in a 7.97% rise in carbon dioxide emissions. And that a 10% rise in predicted carbon dioxide emissions results in 4.71 percent, 0.36 percent, and 0.71 percent decreases in foreign direct investment, real GDP, and the value of the human development index, respectively. And the Green Middle East initiative included planting 10 billion trees irrigated with untapped treated sewage water amounting to 1528.49 million m3, with a value of 2.094 billion riyals. Finally, the gradual transformation of the green economy leads to environmental sustainability and integration between the environment, economic, and social dimensions of sustainable development, and then this study recommends the necessity of following up and evaluating the results of the work of the Green Middle East Initiative so that carbon emissions eliminated in the Kingdom of Saudi Arabia until 2060

Consumers’ choices for crucial firewood in Saudi Arabia and banning the use of local types

Environmental laws in Saudi Arabia ban the using of local firewood, restricting consumers to only imported types. Hence, the study aims to investigate the factors affecting consumers’ choices of imported firewood. To obtain variations in consumers' choices of firewood, in the absence of local firewood, the study employed the stated preference approach to estimate the probability of choosing imported firewood using Logistic regression. The results pose that environmental attitudes and knowledge positively affect imported firewood choices while the aroma and country of origin negatively influence the imported firewood selection. Shopping from stores of recreational supplies and supermarkets increases the likelihood of selecting imported firewood. The collection available in the bagged logs shows a positive effect in selecting imported firewood. The essential of findings supply to shift preferences toward imported firewood comprise increasing environmental awareness, importing logs with a similar aroma to that of local types, and providing labels for the exporter countries. As local firewood is illegal, the latter insight might stimulate the selection mentality among only imported types of firewood

The Future of Saudi Arabia's Date Exports Using a Cointegration Model

Dates represent an important export crop for Saudi Arabia that attracts foreign exchange. There is an opportunity for Saudi Arabia to extend its date exports to the international market due to production exceeding consumption and comparative advantage in date production. This paper explores the future export market for Saudi dates by analyzing the factors that affect Saudi date exports and highlighting this crop’s comparative advantage. Also, the paper uses autoregressive and distributed lag methodology with data from 1980 to 2017 to predict the future for exported dates between 2020 and 2025. The relationship between the export of dates and other exogenous variables shows there are significant effects from domestic production, domestic consumption of dates, and the price of exported dates in both the long and short term. In contrast, the comparative advantage of Saudi dates shows a significant effect only in the short term, because there has been no active program to promote Saudi dates in global markets. The explanatory variables predict that 2019 Saudi date exports will increase by 3.8-fold in 2025, with the total export amount over 700 thousand tons. Thus, there is an opportunity to develop more programs that target the international market in support of date farms and exporters, and to support market research directed at satisfying the international market

The Future of Saudi Arabia's Date Exports Using a Cointegration Model

Dates represent an important export crop for Saudi Arabia that attracts foreign exchange. There is an opportunity for Saudi Arabia to extend its date exports to the international market due to production exceeding consumption and comparative advantage in date production. This paper explores the future export market for Saudi dates by analyzing the factors that affect Saudi date exports and highlighting this crop’s comparative advantage. Also, the paper uses autoregressive and distributed lag methodology with data from 1980 to 2017 to predict the future for exported dates between 2020 and 2025. The relationship between the export of dates and other exogenous variables shows there are significant effects from domestic production, domestic consumption of dates, and the price of exported dates in both the long and short term. In contrast, the comparative advantage of Saudi dates shows a significant effect only in the short term, because there has been no active program to promote Saudi dates in global markets. The explanatory variables predict that 2019 Saudi date exports will increase by 3.8-fold in 2025, with the total export amount over 700 thousand tons. Thus, there is an opportunity to develop more programs that target the international market in support of date farms and exporters, and to support market research directed at satisfying the international market

The Economic Nexus between Energy, Water Consumption, and Food Production in the Kingdom of Saudi Arabia

The goal of this study was to look at the economic relationship between energy, water use, and plant and animal food production in Saudi Arabia from 1995 to 2020. The results showed that about 55.5%, 82.4%, and 2.5% of changes in the index of plant and animal food production were related to changes in the consumption of water, electricity, and diesel, respectively, using an econometric analysis and the partial correlation coefficient of the second order. The proposed model demonstrated that a 10% change in predicted water, power, or fuel consumption resulted in a 1.97%, 2.78%, and 0.73% change in the index of plant and animal food production, respectively. In light of the Green Middle East Initiative, which intended to minimize carbon emissions, and Saudi agriculture’s goal of rationalizing water use, the country’s total consumption does not exceed 8 billion m3 of renewable groundwater. This is intended to reduce the use of fuel and increase the use of electricity in the agricultural sector. This rationalizing water consumption, reducing diesel consumption, and expanding electricity consumption affects the production of plant and animal food. In light of the strong interdependence between water, energy, and food production, the agricultural policy has become necessary to increase the amount supplied or available for water to be used in food production, in addition to expanding the production of clean energy and its use in the agricultural sector

Impact of Gulf Cooperation Countries’ Foreign Direct Investment on Sudan’s Agricultural Exports

Agricultural foreign direct investment (AFDI) contributes to the long-term growth of developing countries. Sudan has rich agricultural resources with great potential for AFDI. However, so far, Sudan has not exploited this potential to attract investors from other countries, having less of a competitive advantage in agricultural production owing to local and international problems. In this study, we examined the effects of foreign investments of Gulf Cooperation Council (GCC) countries on agricultural exports in Sudan, in addition to other economic factors during 1990–2016 using the two-stage least squares (2SLS) model. The results showed that the investments of GCC countries in Sudan’s agricultural sector boosted agricultural exports. The exchange rate was found to be a key determinant factor of GCC countries deciding to invest in Sudan. We recommend that the Central Bank of Sudan encourage policies to stabilize the exchange rate to attract more agricultural investment from GCC countries