Seasonality of Egyptian Potato Exports

Abstract

Summary and Conclusions This research paper tackles the problem of estimating the seasonality indices using dummy variables models. The paper utilizes a new approach suggested by Daniel Suits to overcome the problem of dummy variables trap and at the same time keep the intercept and all seasonal dummies in the model. This new approach is applied to Egypt exports of potatoes and the results are compared to the results of the traditional approach of estimating seasonal indices. Potatoes constitute the second most important export crop for Egypt after citrus. Egypt exported about 732 thousand tons of fresh potatoes in 2017/2018 with a total value of 209 million US dollars. Russia is the main importer of Egyptian potatoes where its imports in 2017/2018 reached 358 thousand tons with a total value of 102 million US dollars. The study reveals that most of Egypt exports take place during the months of February, March, and April. Egypt exports during the period from July to December are almost negligible. That is the Egyptian produce from the winter season is the most important for the export market. The seasonal index for the month of March is about 216 percent according to the traditional approach and about 210 percent according to Suits approach. The seasonal index of the month of March for Egyptian exports to Russia is about 122 percent according to the traditional approach and 130 percent according to Suits approach. The study concludes that Suits approach is superior to the traditional approach for several reasons. Suits approach can isolate the effects of other variables that impact the dependent variable. In this study we isolated the effect of the time trend on monthly exports. That is why there are some discrepancies between the results of both approaches. Furthermore, Suits approach provides the researcher with the opportunity to test and validate statistical hypotheses that might be of interest to the study under consideration.