This report presents results of a study directed toward specification of relationships which determine some important variables in the market for Thai kenaf and which provide empirical estimates of parameters in these relationships. The work has been undertaken in pursuit of two general sets of objectives.

First, the research forms part of a larger project in which a comprehensive model is being constructed to represent production, consumption, price determination, and interregional trade and competition for major commodities within Thailand's agricultural economy. The project is being conducted within the Division of Agricultural Economics, Ministry of Agriculture and Cooperatives (DAE), and staff from several of the branches of DAE are participating. The present effort to construct a statistical model of demand and price determination for kenaf is one of several commodity market studies now being conducted under this project.

Second, it is also intended that this work shall form part of the regular work program of the Demand Analysis Sub-Branch of DAE's Marketing Branch. Here there are two sub-objectives. One is to develop analytical structures and results which may be used independently for short-term demand and price forecasting. Although forecasts would rarely be based solely on results from a formal model, such models can provide valuable inputs into the forecasting process.