Competition in the Saudi Arabian rice market

Yosef Alamri, Michael Reed and Sayed Saghaian

Abstract: This study aims to examine the intense competition in the Saudi Arabian rice market. The inverse residual demand methods, as proposed by Reed & Saghaian (2004), were estimated using 2SLS for rice exporters to Saudi Arabia during the period 1993-2014. After testing the model for various specifications, it was found that Australia, India, and Pakistan had market power in the Saudi market, while Egypt faced a perfectly elastic demand curve. India had the highest rice mark up and Australia had the lowest. We found Thailand and the US had positive inverse residual demand elasticity, which means no market power.

Keywords: elasticity; inverse residual demand; Lerner index; rice

Date published: 2020-04-30