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Competiveness of Latin American Exports in the U.S. Banana Market

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  • Muhammad, Andrew
  • Fonsah, Esendugue Greg
  • Zahniser, Steven

Abstract

U.S. banana demand differentiated by country of origin is estimated using the generalized dynamic Rotterdam model. Results indicate that dynamic factors play a significant role in determining the allocation of U.S. banana expenditures across exporting sources. Of particular interest is Guatemala’s increased share and Costa Rica’s decreased share of U.S. banana supply. A number of factors explained why Guatemala replaced Costa Rica as the leading U.S. supplier in 2007. (1) Guatemala is the least expensive source on average. (2) Habit persistence, adjustment costs, and other dynamic factors favor Guatemala’s exports. (3) Given increases in the relative price of Costa Rica’s bananas, the price competition between Costa Rica and Guatemala is highly significant. (4) Bananas from Costa Rica are highly responsive to own-price while imports from Guatemala are more price-inelastic. (5) Heavy rains and fluctuating temperatures in Costa Rica have decreased banana production and exports.

Suggested Citation

  • Muhammad, Andrew & Fonsah, Esendugue Greg & Zahniser, Steven, 2011. "Competiveness of Latin American Exports in the U.S. Banana Market," 2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas 98365, Southern Agricultural Economics Association.
  • Handle: RePEc:ags:saea11:98365
    DOI: 10.22004/ag.econ.98365
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    File URL: https://ageconsearch.umn.edu/record/98365/files/banana%20imports%20final%20paper%20_szam_2011.pdf
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    References listed on IDEAS

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    1. Guyomard, Herve & Laroche, Catherine & Le Mouel, Chantal, 1999. "Impacts of the Common Market Organization for Bananas on European Union Markets, International Trade, and Welfare," Journal of Policy Modeling, Elsevier, vol. 21(5), pages 619-631, September.
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    Cited by:

    1. Mekonnen, Dawit Kelemework & Huang, Chung L. & Fonsah, Esendugue Greg, 2012. "Analysis of Fruit Consumption in the U.S. with a Quadratic AIDS Model," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119767, Southern Agricultural Economics Association.

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    Keywords

    Demand and Price Analysis; International Relations/Trade;

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