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EXPORT DEMAND OF PALM OIL IN MALAYSIA: ANALYSIS USING ARDL APPROACH

  • Normaz Wana Ismail*
  • , Sarah Nursyazmin Mohamad Kamal
  • , Muhamad Firdaus
  • , Norazwa Mohamed Hariri
  • *Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

Abstract

The growth of the palm oil industry in Malaysia has established a demand for exports among trading partners worldwide. As a result, Malaysia has gained a reputation as the world's largest producer and exporter of palm oil. Crude palm oil production in 1980 was 2.50 million tonnes; however, by 2019 it had increased to 19.86 million tonnes due to the high export demand for oil palm products. This study studies the export demand for palm oil in Malaysia from 1991 to 2019 by adopting autoregressive distributed lag (ARDL) for cointegration to analyze the export demand determinant, weighted average trading partner income, Malaysian export price, competitor export price, world export price of palm oil, world export price of soybean oil, and real effective exchange rate. The main findings reveal that the factors that determine Malaysian export demands for palm oil are palm oil price changes and trading partner income. In addition, the study also finds that European restrictions on unsustainable palm oil consumption hurt Malaysia’s export demand for palm oil.

Original languageEnglish
Pages (from-to)157-163
Number of pages7
JournalAsian Journal of Agriculture and Rural Development
Volume12
Issue number3
DOIs
Publication statusPublished - 25 Jun 2022
Externally publishedYes

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

  1. SDG 10 - Reduced Inequalities
    SDG 10 Reduced Inequalities

Keywords

  • Agricultural commodities
  • ARDL
  • Export
  • Palm oil
  • Price

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