Estimating the demand for imported green coffee in Saudi Arabia using the Almost Ideal Demand System

Emad Aljohani ^1* Benaissa Chidmi ² Alaa Kotb ¹ Mahmoud Alderiny ¹ Abdullah Aldakhil ³ Yusuf Krimly ¹

• ¹ King Saud University, Riyadh, Riyadh, Saudi Arabia
• ² Texas Tech University, Lubbock, Texas, United States
• ³ King Abdulaziz City for Science and Technology, Riyadh, Saudi Arabia

This study analyzes the demand for imported green coffee in Saudi Arabia using the Almost Ideal Demand System (AIDS) model, examining demand variations by origin, including Ethiopia, Brazil, India, and other countries such as Colombia, Vietnam, and Kenya. The results reveal that Ethiopian coffee, viewed as a luxury good with high income elasticity, dominates Saudi imports, whereas Brazilian and other coffees are considered necessities with more stable demand. Indian coffee demonstrates high price elasticity but occupies a smaller market share.Cross-price elasticities show that Ethiopian and Indian coffees are substitutes, while Ethiopian coffee complements imports from other origins. Projected trends suggest continued growth in imports from Ethiopia, Brazil, and India, with potential declines from different sources. These findings have practical implications for stakeholders: importers and marketers can refine their sourcing and promotion strategies, exporters from key suppliers like Ethiopia and Brazil can strengthen their market positioning, and policymakers can ensure stable access to preferred imports through targeted trade policies. This study contributes to the coffee demand literature by highlighting the importance of a differentiated approach in analyzing the effects of the country of origin on the Saudi Arabian green coffee market.