Estimation of Demand for Major Crops in Egypt Using Almost Ideal Demand Model

Abstract

Promoting exports development and reduction of imports are top priorities on Egypt's economic development agenda as tools to reduce the sharp deficit in the balance of trade, to which wheat and corn imports are main contributors due to the fact that domestic production fails to meet national consumption from both crops. Such imports pose a heavy burden on Egypt’s Balance of Payments, where imports from the two crops reached US$ 2.65 and 1.74 billion, respectively, representing 20.37% and 13.38% of the total value of food imports during 2017, estimated at US$ 13 billion. The Government also devotes great attention to boosting rice and potato exports to accelerate development in the context of global changes leading to increased competition among nations to acquire the largest share of markets, which depends not only on domestic production but also on the competitive advantage of the exported commodity. Needless to say, competitive advantage is the outcome of interaction between a combination of several factors such as growth, economic stability, private sector development, education, training, productivity, efficiency and degree of integration with the global economy.