The Elasticity of Foreign Demand for Malaysian Palm Oil

The Elasticity of Foreign
Demand for Malaysian
Palm rock oil
Faizah Shariff*; Ayat K
Ab Rahman* and Mohd
Nasir Amiruddin*

ABSTRACT
The value snap fastener of merchandise command is expected to receive respectable
attention collect to the current economic climate of mercurial exportation markets
and prices. The export drive elasticity is used to predict the deviate
in demand for an export for a unit reposition in its price and to model the
behavior of international buyers. This project estimated the elasticity of
foreign demand for Malaysian ribbon oil for the major importing
countries - chinaware P R, India, Pakistan, Egypt and South Korea. The
error correction mechanism (ECM) manner was used for the estimation
considering its usefulness in quantifying the short-run and long-run
effects of informative variables on the dependent variables using timeseries data. It was found that the price of touch oil plays a very
significant role in its export; thus, the price needs to be stable and
competitive with those of its substitutes, specially soyabean oil. From
panel data research, the effect of a unit change in the soyabean oil price
is greater on the exports of crude decoration oil than the effect of the same
change in the palm oil price. This means that both oils are highly
substitutable.

INTRODUCTION

* Malaysian Palm Oil Board,
P. O.



Box 10620,
50720 Kuala Lumpur,
Malaysia.

The current economic climate is
characterized by volatile export
markets and prices. Due to this,
the price elasticity of export
demand is expected to receive
considerable attention. The price
elasticity of demand represents the
percentage change in the quantity
of a good demanded in response to
a unit change in its price. Export
demand elasticity is used to predict
changes in the demand for exports
as consequences of changes in their
prices. The export elasticity is used
to model the behaviour of foreign
buyers. Proper estimates of the
export demand elasticity for
Malaysian palm oil are...If you want to get a full essay, wander it on our website: Ordercustompaper.com



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