Demand and supply factors in the export of South African fresh oranges to the United Kingdom: 1976-1993

Two Stage Least Squares and principal component analysis were used to estimate the exportdemand and supply of South African (SA) fresh oranges in the United Kingdom (UK) during1976-1993. Export demand was negatively related to the SA fresh orange price relative to theprice of fresh oranges from Israel, and positively related to lagged orange exports (consumerbrand loyalty proxy). Export supply was positively related to lagged net export realisation pricerelative to domestic orange price, the SA fresh orange price in the UK relative to the SA freshorange price in France, lagged exports (export orientation), and supply shocks. The relativeprice elasticity of export demand was inelastic in both the short- and long-run, indicating thatCapespan International and other future exporters may need to diversify fresh orange exports toalternative export markets to increase real revenue. Long-run export supply was inelastic withrespect to relative price, implying that if SA fresh orange exports are included in a Free TradeAgreement with the EU, they are unlikely to have a marked adverse affect on EU fresh orangeproducers.