Brazilian Import Demand of Dairy Products, with Emphasis in the Mercosul Context

RODRIGO GARCÍA ARANCIBIA; EDITH DEPETRIS GUIGUET

NOVA ECONOMIA

Universidade Federale de Minas Gerais

Año: 2020 vol. 30 p. 551 - 577

0103-6351

Brazil is the largest dairy producer in Latin-America, and in the last 20 years it haschanged from being a net importer of dairy products to an exporter. However, it has notbecome self-reliant and Brazil continues to be a major importer in the region, and it is themost relevant partner for Argentina and Uruguay in Mercosur. In this paper, the Brazilianimport demand of dairy products is estimated by using a source di?erentiated demandsystem framework that is derived from consumer theory. This model takes into account thecountries of origin (i.e., Argentina, Uruguay and other grouped competitors) and variousdairy aggregated items that compete in the Brazilian market. The expenditure elasticities,and the own and cross-price elasticities are computed with the estimated parameters of thedemand system. Conclusions regarding the competitive potential of exporters involved inthis market are obtained, with special emphasis for its Mercosur partners.