Determinants of South Africa’s Orange Trade Flows in the Top European and Asian Importing Countries

Luyolo Matolo, Li Zhemin, Yu Wen, Huang Min

Abstract


South Africa orange exporters have for a long time enjoyed a sizeable market share in many parts of the world. A large portion of that sizeable market share can be located in the European countries then followed by fast developing countries in Asia. This market share can be associated with a declining South African currency compared to the values of these major currencies. On the other hand a number of trade agreements that have been reached by South Africa and these countries over the years have also contributed handsomely in the mentioned market share. Furthermore, diets of consumers in these countries have as well contributed in the conquered market share. Although a number of studies have been conducted on the subject of South Africa’s declining currency and the established trade agreements on products with mixed magnitudes in influencing trade flows, further research is needed for a better understanding on the trade determinants patterns in specific products. This paper focuses on the determinants of South Africa’s orange trade in the top European and Asian importing countries. In order to understand these trade determinants, gravity model has been applied to identify and analyze significant factors encouraging or discouraging the quantities/volumes of oranges exported to the above mentioned countries. Findings have shown that over the reviewed period, South Africa’s orange exports to the European market have been consistence, while exports to Asian market started slow and gradually increased over the years. Gravity model estimated coefficients also showed expected signs.


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DOI: http://dx.doi.org/10.5539/jas.v8n7p38

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