IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/2022-03-11.html
   My bibliography  Save this article

World Vegetable Soil Competition in 1960-2019

Author

Listed:
  • Syahril Syahril

    (Faculty of Economics, Universitas Teuku Umar, Meulaboh, 23681 Aceh Barat, Indonesia)

  • Arie Saputra

    (Faculty of Engineering, Universitas Teuku Umar, Meulaboh, 23681 Aceh Barat, Indonesia)

  • Irmayani Irmayani

    (Faculty of Engineering, Universitas Teuku Umar, Meulaboh, 23681 Aceh Barat, Indonesia)

  • Mirdha Fahlevi

    (Faculty of Economics, Universitas Teuku Umar, Meulaboh, 23681 Aceh Barat, Indonesia)

  • Yenni Ertika

    (Faculty of Economics, Universitas Teuku Umar, Meulaboh, 23681 Aceh Barat, Indonesia)

  • Said Mahdani

    (Faculty of Economics, Universitas Teuku Umar, Meulaboh, 23681 Aceh Barat, Indonesia)

Abstract

This study aims to examine the balance and competition of world vegetable oils as a policy formulation to improve palm oil competitiveness in the balance that is partial to the welfare of palm oil farmers in Indonesia.The study used the Vector Error Correction Model (VECM) to analyze short- and long-term balance relationships with the Johansion Cointegration Test. It then analyzed the relationship of bivariate causality with the Pairwise Granger Causality Tests approach. It further analyzes shocks on the values of independent variables that are responded by dependent variables using Impulse Response and Variance Decomposition. The study used monthly data from1960-2019 sourced from the Food and Agriculture Organization (FAO) and the World Trade Organization (WTO). The results of the study proved that the balance in the short-term variable palm oil prices in one and two previous periods was negative to the price of palm oil now. Furthermore, the same findings on soybean oil prices in the previous one and two years negatively affect the price of soybean oil today. Furthermore, the price of coconut oil in the previous two periods also negatively affects the price of coconut oil now. However, the price of coconut oil variable in the previous period had a positive and significant effect on the price of palm oil. While in the long run, the variable price of soybean oil negatively affects the price of palm oil, then the price of coconut oil has a positive effect on palm oil. The results of bivariate causality tests prove that the variable relationship of palm oil prices has a two-way causality with soybean oil prices, then the price of coconut oil (PCO) has a one-way relationship with the price of palm oil (PPO). This means that changes in price of palm oil (PPO) do not affect changes in price of palm oil (PPO), while changes in price of palm oil (PPO) affect changes in price of coconut oil (PCO). Furthermore, the two-way causality relationship between price of coconut oil (PCO) and price of soybean oil (PSO), meaning that changes in price of coconut oil (PCO) will affect price of soybean oil (PSO) and vice versa. Based on the results of impulse response function and variance decomposition explained that the shock of palm oil prices responded to changes in soybean oil prices and coconut oil prices.

Suggested Citation

  • Syahril Syahril & Arie Saputra & Irmayani Irmayani & Mirdha Fahlevi & Yenni Ertika & Said Mahdani, 2022. "World Vegetable Soil Competition in 1960-2019," International Journal of Energy Economics and Policy, Econjournals, vol. 12(3), pages 108-115, May.
    • Handle: RePEc:eco:journ2:2022-03-11
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijeep/article/download/12562/6741
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijeep/article/view/12562
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rincón, Luis E. & Valencia, Monica J. & Hernández, Valentina & Matallana, Luis G. & Cardona, Carlos A., 2015. "Optimization of the Colombian biodiesel supply chain from oil palm crop based on techno-economical and environmental criteria," Energy Economics, Elsevier, vol. 47(C), pages 154-167.
    2. Dennis Bergmann & Declan O’Connor & Andreas Thümmel, 2016. "An analysis of price and volatility transmission in butter, palm oil and crude oil markets," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 4(1), pages 1-23, December.
    3. Syahril Syahril & Raja Masbar & Sofyan Syahnur & Shabri A. Majid & T. Zulham & Jumadil Saputra & Saiful Badli & Irmayani Irmayani, 2019. "The Effect of Global Prices of Crude Palm Oil, Marketing Margins and Palm Oil Plantations on the Environmental Destruction: An Application of Johansen Cointegration Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 9(4), pages 305-312.
    4. Bicalho, Tereza & Bessou, Cécile & Pacca, Sergio A., 2016. "Land use change within EU sustainability criteria for biofuels: The case of oil palm expansion in the Brazilian Amazon," Renewable Energy, Elsevier, vol. 89(C), pages 588-597.
    5. Pal, Debdatta & Mitra, Subrata K., 2017. "Time-frequency contained co-movement of crude oil and world food prices: A wavelet-based analysis," Energy Economics, Elsevier, vol. 62(C), pages 230-239.
    6. Nizar, Muhammad Afdi, 2012. "Dampak Fluktuasi Harga Minyak Dunia Terhadap Perekonomian Indonesia [The Impact of World Oil Prices Fluctuation on Indonesia’s Economy]," MPRA Paper 65601, University Library of Munich, Germany.
    7. Euler, Michael & Hoffmann, Munir P. & Fathoni, Zakky & Schwarze, Stefan, 2016. "Exploring yield gaps in smallholder oil palm production systems in eastern Sumatra, Indonesia," Agricultural Systems, Elsevier, vol. 146(C), pages 111-119.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Das, Debojyoti & Bhatia, Vaneet & Kumar, Surya Bhushan & Basu, Sankarshan, 2022. "Do precious metals hedge crude oil volatility jumps?," International Review of Financial Analysis, Elsevier, vol. 83(C).
    2. Firna Varina & Sri Hartoyo & Nunung Kusnadi & Amzul Rifin, 2020. "The Determinants of Technical Efficiency of Oil Palm Smallholders in Indonesia," International Journal of Economics and Financial Issues, Econjournals, vol. 10(6), pages 89-93.
    3. Eusebius Pantja Pramudya & Lukas Rumboko Wibowo & Fitri Nurfatriani & Iman Kasiman Nawireja & Dewi Ratna Kurniasari & Sakti Hutabarat & Yohanes Berenika Kadarusman & Ananda Oemi Iswardhani & Rukaiyah , 2022. "Incentives for Palm Oil Smallholders in Mandatory Certification in Indonesia," Land, MDPI, vol. 11(4), pages 1-28, April.
    4. Wongwuttanasatian, Tanakorn & Jookjantra, Kittichai, 2020. "Effect of dual-frequency pulsed ultrasonic excitation and catalyst size for biodiesel production," Renewable Energy, Elsevier, vol. 152(C), pages 1220-1226.
    5. da Costa Lima Pires, Pâmela & da Silva César, Aldara & Cardoso, Alexandre Nunes & Favaro, Simone Palma & Conejero, Marco Antonio, 2023. "Strategies to improve the competitiveness of an agroindustrial system for a macauba based oil production in Minas Gerais State, Brazil," Land Use Policy, Elsevier, vol. 126(C).
    6. Kondoz, Mehmet & Kirikkaleli, Dervis & Athari, Seyed Alireza, 2021. "Time-frequency dependencies of financial and economic risks in South American countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 79(C), pages 170-181.
    7. Abdulai, Issaka & Hoffmann, Munir P. & Jassogne, Laurence & Asare, Richard & Graefe, Sophie & Tao, Hsiao-Hang & Muilerman, Sander & Vaast, Philippe & Van Asten, Piet & Läderach, Peter & Rötter, Reimun, 2020. "Variations in yield gaps of smallholder cocoa systems and the main determining factors along a climate gradient in Ghana," Agricultural Systems, Elsevier, vol. 181(C).
    8. Loretta Mastroeni & Alessandro Mazzoccoli & Greta Quaresima & Pierluigi Vellucci, 2021. "Wavelet analysis and energy-based measures for oil-food price relationship as a footprint of financialisation effect," Papers 2104.11891, arXiv.org, revised Mar 2022.
    9. Claudia Dislich & Elisabeth Hettig & Jan Salecker & Johannes Heinonen & Jann Lay & Katrin M Meyer & Kerstin Wiegand & Suria Tarigan, 2018. "Land-use change in oil palm dominated tropical landscapes—An agent-based model to explore ecological and socio-economic trade-offs," PLOS ONE, Public Library of Science, vol. 13(1), pages 1-20, January.
    10. Bernhard Dalheimer & Christoph Kubitza & Bernhard Brümmer, 2022. "Technical efficiency and farmland expansion: Evidence from oil palm smallholders in Indonesia," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(4), pages 1364-1387, August.
    11. Pal, Debdatta & Mitra, Subrata K., 2019. "Hedging bitcoin with other financial assets," Finance Research Letters, Elsevier, vol. 30(C), pages 30-36.
    12. Chikumbi, Lydia & Muchapondwa, Edwin & Thiam, Djiby, 2020. "Volatility Linkages between Energy and Wine Prices in South Africa," EfD Discussion Paper 20-7, Environment for Development, University of Gothenburg.
    13. Ida Farida & Faurani Santi Singagerda, 2021. "Volatilitiy of World Food Commodity Prices and Renewable Fuel Standard Policy," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 516-527.
    14. Ding Chen & Umar Muhammad Gummi & Shan-Bing Lu & Asiya Mu'azu, 2020. "Modelling the impact of oil price fluctuations on food price in high and low-income oil exporting countries," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 66(10), pages 458-468.
    15. Taghizadeh-Hesary, Farhad & Rasoulinezhad, Ehsan & Yoshino, Naoyuki, 2019. "Energy and Food Security: Linkages through Price Volatility," Energy Policy, Elsevier, vol. 128(C), pages 796-806.
    16. Espinoza Pérez, Andrea Teresa & Camargo, Mauricio & Narváez Rincón, Paulo César & Alfaro Marchant, Miguel, 2017. "Key challenges and requirements for sustainable and industrialized biorefinery supply chain design and management: A bibliographic analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 350-359.
    17. Rezitis, Anthony N. & Rokopanos, Andreas, 2019. "Impact of trade liberalisation on dairy market price co-movements between the EU, Oceania, and the United States," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(3), July.
    18. Dervis Kirikkaleli & Hasan Güngör, 2021. "Co-movement of commodity price indexes and energy price index: a wavelet coherence approach," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 7(1), pages 1-18, December.
    19. Husam Rjoub & Jamiu Adetola Odugbesan & Tomiwa Sunday Adebayo & Wing-Keung Wong, 2021. "Investigating the Causal Relationships among Carbon Emissions, Economic Growth, and Life Expectancy in Turkey: Evidence from Time and Frequency Domain Causality Techniques," Sustainability, MDPI, vol. 13(5), pages 1-20, March.
    20. Farah Roslan & Ștefan Cristian Gherghina & Jumadil Saputra & Mário Nuno Mata & Farah Diana Mohmad Zali & José Moleiro Martins, 2022. "A Panel Data Approach towards the Effectiveness of Energy Policies in Fostering the Implementation of Solar Photovoltaic Technology: Empirical Evidence for Asia-Pacific," Energies, MDPI, vol. 15(10), pages 1-22, May.

    More about this item

    Keywords

    Vegetable Oil Competition; VECM; Pailm oil;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ2:2022-03-11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.