ISSN: 2222-6990
Open access
Crude palm oil (CPO) is one of the commodity that contributes aggressively to the Malaysian economy. Malaysia, at present, grasps the position as the world’s second-largest palm oil producer and exporter in the world after Indonesia. However, there is uncertainty in the price of CPO, and the trend shows an intense fluctuation for the last 20 years. The drive of this study is to examine the relationship and the impacts of four macroeconomic variables, namely the exchange rate (EXC), inflation (INF), money supply (M3) and gross domestic product (GDP) on the Malaysian CPO price. The focus is on the macroeconomic factors that affect CPO price in Malaysia from 1999 to 2018. The research uses secondary data collected from the World Bank and Datastream. The study employs descriptive statistics, Augmented Dickey-Fuller test (ADF) unit root, correlation and multiple regression tests to analyze the data. Based on the ADF test results, the data series are integrated or stationary. Pearson’s correlation test reveals that the EXC has negative correlation while INF, M3 and GDP indicate a positive correlation with the CPO price, respectively. The multiple regression test results are also consistent with the correlation test. INF and GDP found to be significant variables, whereas EXC and M3 are not. These findings are beneficial to the policymakers, palm oil growers or producers and palm oil-related products manufacturers in their planning, forecasting, and making the best policy-related, business and investment decisions in the future. Through this research, the researcher can conclude the findings and correlation between the macroeconomic factors with CPO price in Malaysia.
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In-Text Citation: (Isa et al., 2020)
To Cite this Article: Isa, M. A. M., Baharim, A. T., Mohamed, S., Noh, M. K. A., Nasrul, F., Ibrahim, W. M. F. W., & Hassan, S. S. (2020). Crude Palm Oil Price Fluctuation in Malaysia. International Journal of Academic Research in Business and Social Sciences, 10(5), 879–892.
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