HEALTH ISSUE COMMODITY PROMOTION - IMPACTS ON UNITED-STATES EDIBLE VEGETABLE OIL DEMAND

Analysis of monthly data for January 1980 through December 1990 provid es evidence that an American Soybean Association (ASA) promotional cam paign focusing negative attention on the health issue of tropical oils induced structural change in US domestic consumption of edible palm a nd coconut oils. Evidence strongly suggests that the decline in tropic al oil imports and consumption can be attributed to processor changes in inputs resulting from perceived consumer responses to the ASA healt h issues campaign. The study found prices of tropical oils to be insig nificant in determining short-run soybean and cottonseed oil demand. C onversely, such domestic commodity promotion campaigns may have devast ating short-term impacts on imports, which in turn are significant to the exports of a small number of producing countries. If the perceived negative attributes are less serious than implied, counter-promotion may diminish consumers' concerns over time or create new product marke ts, and declining tropical oil imports might be only temporarily affec ted.