Thesis, Undergraduate (BS Agribusiness Economics) -- University of the Philippines, Mindanao

Market potential of coconut oil in major importing countries and coconut products in the export market were estimated using Ordinary Least Square (OLS) and Seemingly Unrelated Regression (SUR) models. Secondary nominal and aggregate time-series data of each country and product were used. The resulting OLS and SUR model for coconut oil in major importing countries-USA, Netherlands, Japan, Italy and Korea-suggests that contemporaneous correlation does not exist, which mean that OLS results are better than the result obtained in SUR. The import price in USA, Netherlands, Italy and Korea are significant with a negative coefficient that conforms to the assumption of the theory that price should be negative. It implies that for every unit increase on import price, import demand will decrease. On the other the resulting OLS and SUR model for coconut products-coconut oil, desiccated coconut, cake of copra-suggests that contemporaneous correlation exists, which implies that the result in SUR is better than the result in OLS. Independent variables such as price, population, and price of substitute became significant. The demand elasticity for coconut oil showed that Korea is the most sensitive to price changes because it has the highest own-price elasticity. Furthermore, palm oil was proven to be a strong substitute to coconut oil in Netherlands, but a complementary product in Japan. Market potential, on the other hand, was observed in Korea because it has significant income elasticity that is greater than one. In this manner, import demand in Korea is sensitive in the income changes. Demand elasticity for coconut products only has a significant value on income elasticity. However, market potential was not perceived in the model considering the negative coefficient of each product. Thus, given the results obtained from the study, there should be a strong government intervention through coconut agencies to create a strategic pricing mechanism and the industry must content first the issues it is currently facing domestically for it to keep its competitiveness in the international scene in the long run.