Analysis of Copra and Coconut Oil Markets in Mexico

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Edgar Ricardo Lagunes Fortiz
Alma A. Gómez-Gómez
Juan A. Leos-Rodríguez
José Miguel Omaña-Silvestre
Erika Lagunes-Fortiz

Keywords

Spatial equilibrium Model, Profit Maximization, Production Planning.

Resumen

Objective: To assess the economic impact of the implementation of different
production systems (real, traditional, intensive and organic) on the profits of copra-
producing states and major coconut oil companies.
Design/Methodology/Approach: A linear programming model was formulated
which considered the main costs and production revenues, and the transport costs of
the copra and coconut oil market, in order to maximize the profit of copra producers
and the oil industry simultaneously.
Results: The states that were most suitable in the distribution of copra were
Guerrero and Tabasco, which proved to be the main suppliers of all the production
systems evaluated; within production systems, the intensive system presented a
higher level of profit in the scenarios raised.
Study Limitations/Implications: The model considered the sale of copra as the
sole income of producers, leaving aside the marketing of other products and economic transfers, thus underestimating their total profit. Future research is
required to help collect data on alternative sources of income for producers.
Findings/Conclusions: Increasing copra production without taking into account the
installed capacity in the industry results in the creation of a copra surplus in most
producing states, which would result in a fall in the prices of this product, therefore
reducing the profit of most states.

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