Economic Analysis of Factors Affecting Sudanese Live Sheep Exports to Kingdom of Saudi Arabia

Abstract

The major objective of this paper was to analyze the effects of
factors responsible for the exported quantity of Sudanese live sheep to the
market of the Kingdom of Saudi Arabia (KSA). For this end, data on
exported quantities, import prices, competitors' prices, exchange rate and
Saudi chilled mutton imports was used. Multiple regression analysis was
used for estimating the effect of these factors via a transformed
generalized Cobb-Douglas function. Among the four hypothesized
variables, only import price and exchange rate were having significant
effect on exported live sheep quantities. Consistent with the economic
logic, the former was having an elastic effect while the latter had an
inelastic effect. The other two variables with insignificant effect were
competitors' price and KSA imported chilled mutton. All four variables
exerted increasing returns to scale to the Sudanese exported live sheep
quantity. To increase live sheep exports to the Saudi market, the paper
recommends improvement of quality control measures, reduction of
production cost as well as minimizing the tax margins levied by the
different local governments involved, adopting long term contracts in
future markets and have Sudan Central Bank adopt exchange rate policy
measures to encourage investments in this foreign trade business.