Prioritization of Iranian Tomato Target Markets Based on Market Competition Indicators

مجله اقتصاد و توسعه کشاورزی

Article 4, Volume 36, Issue 1 - Serial Number 54, April 2022, Pages 49-65   

Document Type: Research Article

DOI: 10.22067/jead.2022.72231.1075

Authors

A. Kazem Pour¹; H. Rafiee^{* 1}; H. Noroozi¹; S.A. Zarer¹; L. Yousefzadeh²; M. Kaboudtabar¹

¹Department of Agricultural Economics, Faculty of Agriculture, University of Tehran, Karaj, Iran

²Department of Agricultural Economics, Faculty of Agriculture, University of Urmia, Urmia, Iran

Abstract

Introduction
 In the modern world, there is interdependence between the economies of different countries and it is difficult to find a country that has a closed economy. In other words, all the economies of the world are interconnected, but the degree of openness of the economy varies from country to country. One of the ways to reach global markets in transition countries is to develop the export of non-oil products, especially agricultural products, which cannot be achieved without considering the market structure of exportable commodities. Due to the high share of the country in the production of this product versus its small share in the export of this product and on the other hand the lack of comprehensive research on determining appropriate target markets and active presence in it, the present study seeks to examine the comparative advantage , The structure of the export market and finally the prioritization of the target countries of Iranian tomato export using numerical taxonomy (by prioritizing the target countries of Iran based on a set of indicators) to provide scientific solutions to producers of this product to identify and select the appropriate target market.
Materials and Methods
 Considering the high potential of the country in the field of tomato production and export, the present study was conducted with the aim of examining the comparative advantage, determining the structure of the export market and prioritizing the export target markets of this product in Iran. The study period of this research is 2001-2018. For this purpose, the present study has examined the business model and structure of the export market of tomatoes in Iran and the world using the revealed comparative advantage, symmetric revealed comparative advantage, concentration ratios and Herfindahl-Hirschman index. After introducing the indicators of comparative advantage, the market structure index will be examined. Market structure reflects the organizational characteristics of the market, including the concentration of sellers, buyers' concentration, entry conditions and the degree of homogeneity of goods, which can be identified by identifying the nature of pricing, market competition and market type between competition and complete monopoly. Then, in order to prioritize the target markets of Iranian tomatoes, the method of numerical taxonomy analysis was used, which can be used to rank the regions in terms of comparative advantages and potentials and capacities. In this method, first each set is transformed into a homogeneous set based on the desired indicators and then prioritization will be done based on the expressed indicators.
Results and Discussion
 The study of tomato export trends in recent years shows that there is a growth in the export value of this product, but in contrast to the export advantage of Iranian tomatoes during the period under review has been accompanied by many fluctuations and this indicates a competitive risk for tomato exporters in the country. Therefore, adopting policies for permanent monitoring and policy-making to improve the level of competitiveness of Iranian exporters, such as raising the quality of packaging, advertising to introduce the product in new and developed markets, as well as setting preferential tariffs with other countries seems necessary. The study of the structure of the Iranian tomato market showed that during the period under review, the structure of the Iranian tomato export market was not diverse and focused on a few specific countries, which caused instability and a decrease in foreign currency income from tomato exports. The bargaining power of Iran in the world market of this product has decreased, which has ultimately been to the detriment of Iran and the benefit of importing countries. Therefore, it is recommended in the field of trade of this product by identifying new and emerging export target markets and shipping commodities to these countries, as well as increasing the number of export target markets and bringing Iran's export market closer to a competitive state, to prevent Iran's tomato exports to concentrate on a few limited and traditional markets (dominant firm).
Conclusion
 In this study, using the method of numerical taxonomy analysis as an efficient method, we tried to identify Iran's export target markets during the period 2001-2009. Finally, according to the ten indicators of market attractiveness, potential target markets for future exports of Iranian tomatoes were selected. The results of prioritizing the target markets of Iranian tomatoes showed that out of 25 countries importing Iranian tomatoes, 23 countries were among the target markets for exporting Iranian tomatoes. Among the major actual markets of Iranian tomatoes, which account for the largest imports of this product from Iran, only 4 countries, Azerbaijan, Afghanistan, UAE and Armenia are among the 10 countries with high priority, and the rest of the importers of tomatoes from Iran is considered as a target market with low priority. Therefore, in the export of tomatoes, a policy should be adopted that shifts the main focus to high-priority countries to penetrate them with full awareness of all the conditions of the target markets, especially the tastes of customers.

Keywords

Export market structure; Iran; Herfindahl-Hirschman index; Numerical; Target market; Taxonomy

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