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A time series analysis of the relationship between total area planted, palm oil price and production of Malaysian palm oil


Citation

Abu Hassan Asari, Fadli Fizari and Abd Rahman, Nur Hayati and Abdul Razak, Errie Azwan and Shabir Ahmad, Bashir Ahmad and Harun, Nurul Fahana Aini and Jusoff, Kamaruzaman (2011) A time series analysis of the relationship between total area planted, palm oil price and production of Malaysian palm oil. World Applied Sciences Journal, 12. pp. 34-40. ISSN 1818-4952; ESSN: 1991-6426

Abstract

Malaysia is a very well-known country in the oils and fats sector especially palm oil because it is the world’s biggest producer and exporter of the commodity. This study was conducted to analyze the relationship between total area planted and palm oil price with production of palm oil in terms of magnitude and direction using the time series analysis method. Johansen cointegration technique, error correction model and Granger causality tests were used to estimate those relationships. The findings showed that the total area planted and palm oil price have negative relationship towards production of Malaysian palm oil. On the other hand, there is no causality relationship between total area planted and production of Malaysian palm oil in the short run. However, there is a unidirectional causality relationship between palm oil price and production of palm oil in Malaysia. For future recommendation, it is suggested that other researchers will supplement this research by integrating other factors that might affect the production of palm oil such as climate change and geographical area.


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Additional Metadata

Item Type: Article
Divisions: Faculty of Forestry
Publisher: IDOSI Publications
Notes: Special issue on Bolstering Economic Sustainability
Keywords: Total area planted; Palm oil price; Production of palm oil; Time series analysis; STATA
Depositing User: Nabilah Mustapa
Date Deposited: 09 Jul 2020 00:35
Last Modified: 09 Jul 2020 00:35
URI: http://psasir.upm.edu.my/id/eprint/42910
Statistic Details: View Download Statistic

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