Economic analysis of the structure of demand for imported corn to the Kingdom of Saudi Arabia

The main objective of this paper is to analyze economic factors affecting the demand for imported corn to Saudi Arabia. The analysis aimed also at observing the impact of alternative livestock support policy on the demand for corn. Import demand model for corn is specified and statistically estimated using time series data for the period 1976-1990. Some literature for related studies in the U.S., Egypt, and Saudi Arabia is reviewed in this research. Results showed that about 94% of the variation in imported quantities of corn is due to the variations in real import price of corn, real per capita GDP, real price of local chicken meat, and the per animal unit government support to the livestock sector. The estimated demand model was tested for its projection ability using the (U-theil). Imported quantity demanded of corn is then forecasted up to the year 2000 with a 95% confidence interval. The paper also analyzed the impact of a 10% increase or decrease in the per animal unit government support on the imported quantity of corn to Saudi Arabia. It is expected that imported quantities of corn will be around 504 thousand tons by the year 2000, a 10% increase (decrease) in the per animal unit government support will result in an increase (decrease) of the forecasted imported quantities of corn by 9%, and 33%, respectively