J. Agric. Environ. Sci. Vol. 5 No 2 (2020) ISSN: 2616-3721 (Online); 2616-3713 (Print)

Publication of College of Agriculture and Environmental Sciences, Bahir Dar University 64

Demand for Imported Staple Food Commodities in the Kingdom of Saudi Arabia

Sadiq, M. S.

*1

, Singh, I. P.

2

and Ahmad, M. M.

3

This work is licensed under a Creative Commons Attribution 4.0 International License

1. Introduction

The Gulf Cooperation Council (GCC) countries,

with an approximate population of 40 million are

among the world‟s richest countries in respect to

oil and gas reserves, and per capita wealth (Adam

et al., 2019). However, about 90% of their food

requirements are imported as the domestic

production is inadequate to meet their current

demand. Therefore, the food imports in the GCC

region experienced a rapid and drastic change in

their socio-economic situation, patterns of food

consumption, lifestyle and health status. This was

mainly attributed to the sharp increase in income

due to oil revenue accumulations. Nevertheless,

under-nutrition and micro-nutrient deficiencies still

exist among vulnerable groups; diet-related chronic

diseases have become the main health problems

while communicable diseases have diminished

(FAO, 2017; Adam et al., 2019).

Adam et al. (2019) opined that qualitative and

quantitative changes in food diets represent the

main characteristics of the dietary changes and

content. These factors include income, prices,

traditions and geographical location,

environmental, social and economic factors. Major

shifts in dietary patterns are occurring, such as a

shift in consumption of basic staple foods towards

more diversified diets.

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Therefore, Kingdom of Saudi Arabia being an

epicentre of tourism and rapid population growth in

the GCC region was chosen as a pilot country to

examine the demand pattern of imported staple

food commodities so as to chart a realistic narrative

that will enhance homegrown economy and the

health status of its populace in particular and the

region in general. Thus, it is in view of the

foregoing that the present study aimed at

2. Research Methodology

The study used time-series data that spanned from

1980 to 2017; which covered Consumer price

index(CPI), import quantities and expenditures of

fifteen staple food commodities viz. barley, wheat,

rice, maize, millet, dry beans, potatoes, root and

tubers, coffee, tea, vegetables, spices, beef, mutton

and chicken meat. The data were sourced from the

database of FAO and UNCTAD and the collected

data were analysed using descriptive statistics (first

[1]

[2]

The restrictions on the parameters of the AIDS in

equation (1) are:

commodity;

X = total household expenditure on all the food

items considered for the study;

= stone price index;

= stochastic term and it is assumed to be zero

= expenditure coefficient

According to Blanciforti and Green (1983) and

Awal et al. (2008) the model that uses Stone‟s

Approximate Almost Ideal Demand System

as the functions of the estimated parameters and

they have standard implications.

) which measures the

J. Agric. Environ. Sci. Vol. 5 No 2 (2020) ISSN: 2616-3721 (Online); 2616-3713 (Print)

Publication of College of Agriculture and Environmental Sciences, Bahir Dar University 66

When the objective is to use a tax instrument to

limit consumption of a certain item by raising its

price to consumers, the value of the price elasticity

of demand is the key (Clements and Si, 2015)

which was calculated following the formula below.

[14]

Where,

RPI = Required price increase

(0.202) and then imported chicken meat (0.201)

(Table 1). Thus, the average budget share of these

three household food commodities had an

overwhelming dominance in the average annual

expenditure budget of consumers of imported

commodities in the study area. This showed that on

the average consumers of imported commodities in

the study area expended $0.328, $0.202, $0.201

and $0.269 on barley, rice, chicken meat and the

commodities, thus indicating a very little diversity

in their diet. Thus, the diversity of barley, rice and

area is high. This did not come as a surprise as the

major food items consumed in the studied area are

these three items.

On the average, the quantity consumed per year

was highest for barley (4.9 million MT), followed

by maize (1.23 million MT), then rice (0.78 million

MT), wheat (0.59 million MT), chicken meat

(0.372 million MT) and the least been the dry

barley, coffee, potatoes, root and tubers and mutton

were high; dry beans, maize, rice, spices, tea,

wheat, beef and chicken meat were moderate; while

it was low for millet. This indicates that the first

and the second categories of the food items are sold

based on grades, thus the reason for the high and

moderate variations in their prices (Table 3 and 4).

However, millet having low variation in its price

indicates that the imported commodity is not

graded, thus the low price variation may be

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J. Agric. Environ. Sci. Vol. 5 No 2 (2020) ISSN: 2616-3721 (Online); 2616-3713 (Print)

Publication of College of Agriculture and Environmental Sciences, Bahir Dar University 68

Furthermore, barley, rice and chicken meat had the

highest marginal budget shares with an estimate of

diversification in food spending with one single

J. Agric. Environ. Sci. Vol. 5 No 2 (2020) ISSN: 2616-3721 (Online); 2616-3713 (Print)

Publication of College of Agriculture and Environmental Sciences, Bahir Dar University 69

limit. The R

estimates showed the percentage

contribution of the price and income to the

household demand for a particular commodity. For

instance, the R

vegetables and beef respectively, imply that 58.9%

imported vegetables and beef respectively were

determined by own-price, substitute prices and

income that were captured in the model while the

significant intercept coefficients while the

remaining selected food items had positive

of the intercept implies an exogenous growth in the

demand for a commodity independent of the

movements in prices and income. Thus, it can be

increased with an increase in its own-price and

price of chicken meat while it decreased with an

increase in the prices of maize, roots & tubers, tea,

vegetables and wheat. The budget share of coffee

decreased with an increase in its own-price and

prices of roots and tubers, tea and vegetables; while

it increased with an increase in the price of mutton.

The budget share of maize increased and decreased

with an increase in its own-price, prices of dry

beans, tea and beef; and, prices of millet, potatoes,

J. Agric. Environ. Sci. Vol. 5 No 2 (2020) ISSN: 2616-3721 (Online); 2616-3713 (Print)

Publication of College of Agriculture and Environmental Sciences, Bahir Dar University 70

The budget share of rice increased with an increase

in its own-price and price of tea, while it decreased

with an increase in the prices of barley, coffee,

spices and wheat. The consumption share of roots

and tubers increased and decreased with an

increase in the prices of potatoes and mutton; and,

chicken meat respectively. The budget share of

spices increased with an increase in its own-price

and the price of wheat; and decreased with an

potatoes and mutton. The budget share of wheat

decreased and increased with an increase in the

prices of chicken meat; and, coffee, maize,

potatoes, rice, roots and tubers, vegetables and

mutton, respectively.

increase in its own-price and the prices of maize,

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