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Izaan Jamil · Mori Kogid · Thien Sang Lim · Jaratin Lily ·Economies ·2022

This paper investigates the impact of soybean and crude oil futures on palm oil indexes by utilising monthly data from three palm oil indexes listed in Bursa Malaysia, i.e., the Asian palm index, Malaysian palm index, and Plantation index, spanning from January 2010 to June 2020. The impacts were analysed using the Autoregressive Distributed Lag (ARDL) bounds test approach and causality test. The statistical findings revealed that the Asian palm index has a long-run relationship with crude oil futures and crude palm oil, and a short-run relationship with soybean futures, crude oil futures, and crude palm oil. On the other hand, the Malaysian palm index has a short-run relationship with soybean futures and crude palm oil, whereas the Plantation index has a short-run relationship with crude oil futures, crude palm oil, and exchange rate. For the long-run strategy, this study recommends close monitoring of crude oil futures. Meanwhile, the short-run strategy requires close monitoring of the crude oil and soybean futures. Eventually, the empirical findings proposed that interested parties such as fund managers, investors, and traders should pay attention to crude oil and soybean futures to mitigate risk and diversify their portfolios with greater emphasis on crude oil futures.

Norlin Khalid · Hakimah Nur Ahmad Hamidi · Sharmila Thinagar · Nur Fakhzan Marwan (Universiti Teknologi MARA (UiTM) Kedah) ·Jurnal Ekonomi Malaysia ·2018

This paper aims to forecast the performance of crude palm oil price (CPO) in Malaysia by comparing several econometric forecasting techniques, namely Autoregressive Distributed Lag (ARDL), Autoregressive Integrated Moving Average (ARIMA) and Autoregressive Integrated Moving Average with exogenous inputs (ARIMAX). Using monthly time series data spanning from 2008 to 2017, the main results revealed that ARIMAX model is the most accurate and the most efficient model as compared to ARDL and ARIMA in forecasting the crude palm oil price. The results also show that the spot price of palm oil is highly influenced by stock of palm oil, crude petroleum oil price and soybean oil price. The empirical findings provide some insights for decision making and policy implementations, including the formulation of strategies to help the industry in dealing with the price changes and thus enable the Malaysian palm oil industry to continue dominating the international market.

Helena Varkkey · Adam Tyson · Shofwan Al Banna Choiruzzad ·Forest Policy and Economics ·2018

Intensification and expansion are two essential tenets of commercial agriculture. This paper analyses trends of intensification and expansion at the national level, particularly in the oil palm sector in Indonesia and Malaysia. Despite similar starting points and also comparable rates of increasing productivity and profit in this sector, both countries have developed almost opposite trajectories of land use. While both intensification and expansion has occurred in these countries, national indicators show that Malaysia has largely pursued intensification while Indonesia has overwhelmingly favoured expansion. Using the framework of the Jevons paradox, this paper contributes to the existing literature by arguing how and why political and social factors, rather than technology and market incentives, can better account for the differences between yield and land use efficiency in Indonesia and Malaysia today. The paper argues that expansion in Malaysia has been curtailed by the Malaysian government's pledge to maintain at least 50% forest cover in the late 1990s, coupled with a government supported corporate strategy of establishing plantations in Indonesia. Indonesia has made no such pledge, leading to expansionist policies focused on market creation and production goals with limited incentives for technology-driven intensification. It also notes however that in recent years, new socio-political developments in both countries may yet change this clear dichotomy of opposing land use strategies between these two countries, namely Sarawak's recent autonomous tendencies over land use and Indonesia's new leadership and international No Deforestation Peat and Exploitation (NDPE) commitments.

Mohd Azlan Shah Zaidi · Zulkefly Abdul Karim · Noor Amirah Zaidon ·Economies ·2022

Movements in palm oil price give important signals to various stakeholders of the palm oil industry in Malaysia. Thus, understanding external and internal factors that may affect the palm oil price is vital to the industry players for sustainability of their activities. This study investigates relative importance of external and internal shocks on the movement of palm oil price in Malaysia. Employing a structural vector autoregressive (SVAR) model on quarterly data from 1990 to 2019, the findings reveal that external shocks are more dominant in affecting the palm oil price. Shocks to the crude oil price, the prices of substitution goods (soybeans oil, rapeseed oil, and sunflower oil), the world palm oil price, and foreign income significantly affect the palm oil price in the short and medium run. The results also indicate that a shock to soybean oil price has a more profound effect on the palm oil price than a shock to rapeseed oil or sunflower oil prices, respectively. Likewise, shocks to incomes from India as well as from Netherlands create greater impacts on the palm oil price than a shock to income from the other trading partners, respectively. The study has shown the importance of external factors in affecting the palm oil industry.

Arif Imam Suroso ·Economies ·2022

Palm oil is one of the most traded vegetable oils in the global market due to its versatile usage and having a lower price than competitor products. Trade is related to logistics performance as it connects the exporter and importer countries; thus, improving the indicators of logistics also improves the performance of trade, especially in agricultural export. Currently, no study has revealed the effect of logistics performance on palm oil export by considering all the indicators. This study investigates the impact of all the indicators of the logistics performance index on palm oil and palm-based products. Using a panel data regression approach, the extended gravity model is applied in this study to examine Indonesia and Malaysia as the leading exporters of palm oil and palmbased products. The results reveal that all the Logistics Performance Index indicators affect palm oil and palm-based products export in Indonesia and Malaysia. The critical indicators of the Logistics Performance Index in Indonesia are timeliness and tracking and tracing. However, competence and quality of trade infrastructure are the main indicators of Malaysia’s palm oil and palm-based products. The future direction of this research is to explore other agricultural commodities and extend the period of the analysis.