An Empirical Study of Malaysia Palm Oil in the Global Market
DOI:
https://doi.org/10.37134/Keywords:
ARDL, Export, Global market, Palm oilAbstract
This study is to review the factors that affect the Malaysian palm oil exports in the global market. This study used secondary data for the period 1975 until 2023 by using an ARDL approach. The findings of this study show that the dominant factor for Malaysia's palm oil export market in the long term is contributed by world economic activity. The world palm oil price has a negative impact and significant in the short run and the long run towards export. Next, this study also indicate that soya bean oil and palm oil are substitute but significant only in the long run. The positive effect also shown by exchange rate. Malaysia and Indonesia act as substitute in the global market which is indicated by a negative sign of Indonesian palm oil export but insignificant in the long run. However, in the short term it is significant at a one-year and two-year delay at the 1 percent significance level. Therefore, adopting a non-price approach, such as promotions and Memorandums of Understanding, are likely to stabilize and lower palm oil prices, thereby enhancing the marketability of Malaysia's palm oil exports worldwide.
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