IDEAS home Printed from https://ideas.repec.org/a/ags/ajosrd/342285.html

Price Adjustment of Oil Palm and Palm Oil in Thailand to the World Price of the Palm Oil Market

Author

Listed:
  • Saleerut, Sriwena
  • Jatuporn, Chalermpon
  • Suvanvihok, Vasu
  • Wanaset, Apinya

Abstract

The objectives of this study are to analyze: (1) the effects from the change of palm oil price in the world market to the prices of oil palm and palm oil in Thailand, and (2) the adjustment of oil palm and palm oil prices in Thailand to the change of the price of palm oil in the world market using monthly time series from January 2008 to September 2019. The statistics consist of the stationary test using the ADF unit root, the long-run equilibrium test using the cointegration, and the short-run adjustment to the equilibrium using the error correction model, respectively. The empirical findings show that farm-gate price is the most affected by the change of palm oil price in the world market, followed by wholesale, export, and retail prices, respectively. In line with the adjustment of the prices of oil palm and palm oil in Thailand to the change in the world palm oil price, it is found that farm-gate price has adjusted in the short-term to return the equilibrium with the highest speed at 27.883%, followed by wholesale price 22.710%, exporting price 18.792%, and retail price 15.658%, respectively.

Suggested Citation

  • Saleerut, Sriwena & Jatuporn, Chalermpon & Suvanvihok, Vasu & Wanaset, Apinya, 2020. "Price Adjustment of Oil Palm and Palm Oil in Thailand to the World Price of the Palm Oil Market," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 10(02), January.
    • Handle: RePEc:ags:ajosrd:342285
    DOI: 10.22004/ag.econ.342285
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/342285/files/Price%20Adjustment%20of%20Oil%20Palm%20and%20Palm%20Oil%20in%20Thailand%20to%20the%20World%20Price%20of%20the%20Palm%20Oil%20Market.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.342285?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Robert Engle & Clive Granger, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    2. Barry K. Goodwin, 1992. "Multivariate Cointegration Tests and the Law of one Price: A Clarification and Correction," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 14(2), pages 337-338.
    3. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    4. Madhusudan Ghosh, 2003. "Spatial Integration of Wheat Markets in India: Evidence from Cointegration Tests," Oxford Development Studies, Taylor & Francis Journals, vol. 31(2), pages 159-171.
    5. Stephan Cramon-Taubadel & Jens-Peter Loy, 1996. "Price Asymmetry in the International Wheat Market: Comment," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 44(3), pages 311-317, November.
    6. P. J. Dawson & P. K. Dey, 2002. "Testing for the law of one price: rice market integration in Bangladesh," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(4), pages 473-484.
    7. Wanvilai Chulaphan & Shwu-En Chen & Chalermpon Jatuporn & Pattana Jierwiriyapant, 2012. "The Effect of Rice Price-Pledging Scheme on Price Transmission of Rice Markets in Thailand," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 2(5), pages 141-148, November.
    8. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
    9. Barry K. Goodwin, 1992. "Multivariate Cointegration Tests and the Law of One Price in International Wheat Markets," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 14(1), pages 117-124.
    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. Sriwena Saleerut & Chalermpon Jatuporn & Vasu Suvanvihok & Apinya Wanaset, 2020. "Price adjustment of oil palm and palm oil in Thailand to the world price of the palm oil market," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 10(2), pages 690-697, December.
    2. Tleubayev, Alisher & Jamali Jaghdani, Tinoush & Götz, Linde & Svanidze, Miranda, 2021. "The relationship between trade policies and macroeconomic adjustments in the Russian cheese market integration," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 22(3), pages 44-68.
    3. Alisher Tleubayev & Tinoush Jamali Jaghdani & Linde Gotz & Miranda Svanidze, 2021. "The relationship between trade policies and macroeconomic adjustments in the Russian cheese market integration," Journal of New Economy, Ural State University of Economics, vol. 22(3), pages 44-68, October.
    4. Yap, Wei Yim & Lam, Jasmine S.L., 2006. "Competition dynamics between container ports in East Asia," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(1), pages 35-51, January.
    5. repec:eur:ejefjr:7 is not listed on IDEAS
    6. Osamah M. Al-Khazali, 2003. "Stock Prices, Inflation, and Output: Evidence from the Emerging Markets," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 2(3), pages 287-314, September.
    7. Rosa, Franco & Vasciaveo, Michela & Weaver, Robert D., 2014. "Agricultural and oil commodities: price transmission and market integration between US and Italy," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 3(2), pages 1-25, August.
    8. Svanidze, Miranda & Götz, Linde & Djuric, Ivan & Glauben, Thomas, 2019. "Food security and the functioning of wheat markets in Eurasia: a comparative price transmission analysis for the countries of Central Asia and the South Caucasus," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 11(3), pages 733-752.
    9. Usman Qamar Sheikh & Muhammad Zafar Iqbal & Hafiz Khalil Ahmad, 2016. "The Impact of Foreign Aid, Energy Production and Human Capital on Income Inequality: A Case Study of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 5(1), pages 1-9, March.
    10. Stevenson, Simon, 2000. "A Long-Term Analysis of Regional Housing Markets and Inflation," Journal of Housing Economics, Elsevier, vol. 9(1-2), pages 24-39, March.
    11. Carlos Alberto Barreto Nieto & Jacobo Campo Robledo, 2012. "Relación a largo plazo entre consumo de energía y PIB en América Latina: Una evaluación empírica con datos panel," Revista Ecos de Economía, Universidad EAFIT.
    12. Felipe Morandé & Raimundo Soto, "undated". "El Mercado de Clientes No Regulados en la Industria Eléctrica," ILADES-UAH Working Papers inv100, Universidad Alberto Hurtado/School of Economics and Business.
    13. Levent KORAP, 2008. "Exchange Rate Determination Of Tl/Us$:A Co-Integration Approach," Istanbul University Econometrics and Statistics e-Journal, Department of Econometrics, Faculty of Economics, Istanbul University, vol. 7(1), pages 24-50, May.
    14. Teixeira, Aurora A.C. & Fortuna, Natércia, 2010. "Human capital, R&D, trade, and long-run productivity. Testing the technological absorption hypothesis for the Portuguese economy, 1960-2001," Research Policy, Elsevier, vol. 39(3), pages 335-350, April.
    15. Johannes W. Fedderke, 2022. "Identifying supply and demand shocks in the South African Economy, 1960–2020," South African Journal of Economics, Economic Society of South Africa, vol. 90(3), pages 349-389, September.
    16. Ghosh, Asim, 1996. "Cross-Hedging Foreign Currency Risk: Empirical Evidence from an Error Correction Model," Review of Quantitative Finance and Accounting, Springer, vol. 6(3), pages 223-231, May.
    17. Tung Liu & Lee C. Spector, 2005. "Dynamic employment adjustments over business cycles," Empirical Economics, Springer, vol. 30(1), pages 151-169, January.
    18. Esther Stroe-Kunold & Joachim Werner, 2009. "A drunk and her dog: a spurious relation? Cointegration tests as instruments to detect spurious correlations between integrated time series," Quality & Quantity: International Journal of Methodology, Springer, vol. 43(6), pages 913-940, November.
    19. Hervé Nenghem Takam & Roger Tsafack Nanfosso, 2024. "Importance of official development assistance in improving the economic cycles of Economic and Monetary Community of Central Africa countries," SN Business & Economics, Springer, vol. 4(7), pages 1-22, July.
    20. Jones Danquah & Daniel Sarpong & Ari Pappinen, 2013. "Causal relationships between African mahoganies exports and deforestation in Ghana: policy implications," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 15(1), pages 51-66, February.
    21. Goldberg, Michael D. & Frydman, Roman, 1996. "Empirical exchange rate models and shifts in the co-integrating vector," Structural Change and Economic Dynamics, Elsevier, vol. 7(1), pages 55-78, March.

    More about this item

    Keywords

    ;

    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:ags:ajosrd:342285. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aesstea.html .

    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.