Egyptian tea market is one of the largest tea import markets as it ranked fifth among the world import markets for tea. Nevertheless, there is no economic research has been done on Egyptian tea market. Accordingly, this paper is the first study analyzing the Egyptian import demand for tea differentiated by source of production. Thus, the source differentiated Almost Ideal Demand System (SDAIDS), in which sources of tea are differentiated and the expenditure is treated as endogenous, has been adopted.
The results showed that India still has good opportunity to increase their exports to Egypt by removing trade barriers or/and trade agreements rather than price reduction are the key factors to increase the access of Indian tea in Egyptian tea market.
Indonesia has the largest expenditure elasticity (6.12) and strong elastic own-price elasticity indicating that Indonesia encountered sever competition in the Egyptian market. Consequently, price decrease policy has to be taken into consideration in addition to trade facilities in terms of increasing the Indonesian access to Egyptian tea market.
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