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

Abstract

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.

Optimal geographical distribution of Saudi dates exports

“…A study Alnafissa Mohamed, Alderiny, Yosef and Alhashim (2021) showed that although the production of dates in Saudi Arabia increased during the period 1970-2019, it was not accompanied by a commensurate increase in exports to global markets. The results showed that Saudi Arabia and other date exporting countries (Iran, Iraq, Israel, Pakistan, Tunisia, and the United Arab Emirates) are highly competitive in the global market.…”

“…Also Alnafissa Mohamed et al (2021) conducted a study that showed that Saudi Arabia can increase its exports of dates to international markets, given the superiority of production over consumption and the comparative advantage in date production. It was found that there are significant effects of both local production and consumption of dates, and the prices of exported dates in the long and short term.…”