Proceedings of the 10th International Conference on Business, Accounting, Finance and Economics (BAFE 2022)

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The Determinant of Local Palm Oil Price in Malaysia: Does the Covid-19 Pandemic Matter?

Authors
Thurai Murugan Nathan1, *, Abdelhak Senadjki1, Hui Nee Au Yong1
1Faculty of Business and Finance, Universiti Tunku Abdul Rahman, Jalan Universiti, Bandar Barat, 31900, Kampar, Perak, Malaysia
*Corresponding author. Email: thurai@utar.edu.my
Corresponding Author
Thurai Murugan Nathan
Available Online 4 February 2023.
DOI
10.2991/978-2-494069-99-2_26How to use a DOI?
Keywords
Malaysia; Biodiesel; Palm oil price; Environmental; Sustainable development goals; Supply and demand
Abstract

Biodiesel is an alternative fuel and is getting substantial attention globally due to its environmental benefits. Biodiesel is one of Malaysia’s downstream movements of the palm oil industry. This industry is well known for its economic contribution to Malaysia’s income growth. This study determines the effect of biodiesel price and the Covid-19 pandemic on Malaysia’s local palm oil price using the monthly data which covered the period of January 2013 to June 2022. ARDL bound testing was adopted to test for cointegration. The dummy variable represents the lockdown period incorporated in the model. The findings indicate the existence of cointegration among variables. The real exchange rate and industrialization have a negative and significant impact on local palm oil prices, and crude oil and biodiesel prices positively affect Malaysia’s local palm oil prices. Interestingly, the impact of biodiesel price on the local palm oil price is higher than the crude oil price. The dummy variable, which represents the Covid-19 pandemic effect, shows a significant positive effect on the local palm oil price in the short and long run. Policies promoting the sustainable development of the palm oil and biodiesel industry will contribute to Malaysia through increased output, employment, and GDP.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 10th International Conference on Business, Accounting, Finance and Economics (BAFE 2022)
Series
Advances in Economics, Business and Management Research
Publication Date
4 February 2023
ISBN
10.2991/978-2-494069-99-2_26
ISSN
2352-5428
DOI
10.2991/978-2-494069-99-2_26How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Thurai Murugan Nathan
AU  - Abdelhak Senadjki
AU  - Hui Nee Au Yong
PY  - 2023
DA  - 2023/02/04
TI  - The Determinant of Local Palm Oil Price in Malaysia: Does the Covid-19 Pandemic Matter?
BT  - Proceedings of the 10th International Conference on Business, Accounting, Finance and Economics (BAFE 2022)
PB  - Atlantis Press
SP  - 333
EP  - 347
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-2-494069-99-2_26
DO  - 10.2991/978-2-494069-99-2_26
ID  - Nathan2023
ER  -