Abdel Hameed, Amna Awad and Hasanov, Akram and Idris, Nurjihan and Abdullah, Amin Mahir and Mohamed Arshad, Fatimah and Shamsudin, Mad Nasir (2009): Supply and Demand Model for the Malaysian Cocoa Market.
Download (194Kb) | Preview
This paper investigates a system of supply, demand, and price equations for Malaysian cocoa using annual data over the period 1975-2008. Theoretically, in supply and demand models, the price variable is treated as endogenous. However, Hausman specification test result indicates that there is no simultaneity problem in the model. Thus, we estimate the system of equations utilizing the Seemingly Unrelated Regression (SUR) estimation technique which might be considered a more efficient estimator for supply and demand model of the Malaysian cocoa. The results suggest that the Malaysian cocoa production is mainly affected by the previous year production, price of cocoa beans at lag two as well as the harvested area. In the export demand equation, the real effective exchange rates is statistically significant determinant while the index of industrial production of advanced economies and the world price of cocoa are found to be insignificant. The results also suggest that both Malaysian industrial production index and domestic price of cocoa beans are key determinants of domestic demand for cocoa beans in Malaysia. Finally, the domestic price of cocoa beans is highly sensitive to its domestic consumption, lagged domestic price, and its world price.
|Item Type:||MPRA Paper|
|Original Title:||Supply and Demand Model for the Malaysian Cocoa Market|
|Keywords:||Supply and Demand; Malaysian Cocoa; SUR technique|
|Subjects:||Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q1 - Agriculture > Q11 - Aggregate Supply and Demand Analysis; Prices
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products
|Depositing User:||nurjihan idris|
|Date Deposited:||25. Dec 2009 10:43|
|Last Modified:||11. Feb 2013 19:36|
Abdul Rahman Lubis (1994). "Malaysian Market Model for Palm Oil: Some Policy Simulations," PhD Thesis (unpublished), Universiti Putra Malaysia, Serdang, Selangor.
Amna Awad Abdel Hameed (2005). An Econometric Study of Palm Oil Import Demand in the Middle East and North African Countries, PhD Thesis (unpublished), Universiti Putra Malaysia, Serdang, Selangor.
Azhar, I. (2007). “The Ways towards Sustainability of Cocoa Industry in Malaysia”, presentation at the ICCO Round Table on A Sustainable World Cocoa Economy, International Conference Centre Accra , Ghana, 3-6 October 2007.
Bateman, J.R. (1965). “Aggregate and Regional Supply Functions for Ghanaian Cocoa, 1946- 1962.” Journal of Farm Economics. 47 (2): 384-401.
Behrman, M.J. (1968). “Monopolistic Cocoa Pricing” American Journal of Agricultural Economics. L:702-719.
Chambers, R. and Just R. (1979). A Critique of Exchange Rate Treatment in Agricultural Trade Models. American Journal of Agricultural Economics, 61, 249-57.
Ernawati (2004). Trade Liberalization Impact on The Indonesian Palm Oil Industry," PhD Thesis (unpublished), Universiti Putra Malaysia, Serdang, Selangor
FAOSTAT online database of the Food and Agriculture Organization of the United Nations @ http://faostat.fao.org/default.aspx , accessed on 30th August 2009.
Hwa, E.C. (1979) “Price Determination in Several International Primary Commodity Markets: A Structural Analysis.” IMF Staff Papers. 26:157-188.
IFS online data base of the International Monetary Fund @ http://www.imfstatistics.org/imf/logon.aspx, accessed on 30th August 2009.
Kox , Henk M.L. (2000). The Market for Cocoa Powder: Modeling and Forecasting the Market for Cocoa and Chocolate, paper prepared for the Ministry of Foreign Affairs, The Netherlands.
Malaysian Cocoa Board (2009). Malaysian Cocoa Board website@ http://www.koko.gov.my/l accessed on 12 September 2009.
Melo, H.D. (1972). An Analysis of World Cocoa Economy in 1980. Ph. D. Dissertation, North Carolina State University.
Mohammad Haji Alias (1988). “Pembinaan dan Pemilihan Model respon Penawaran dan Pengeluar Getah Asli” Jurnal Ekonomi Malaysia. 18: 3-25.
Mohammad Haji Alias, Anizah Md Ali dan Maria Abdul Rahman. (2001). The Impact of Government Policy on the Supply Response of Malaysian Palm Oil, Rubber and Cocoa Producers. Utara Management Review. 2(1):41- 64.
Mohammad Haji Alias, Mansor Jusoh and Zulkifli Senteri, (1987). “A Model of Malaysian Agricultural Sector: Preliminary Results” . Paper presented in the Fourth economic Meeting (MIER), Kuala Lumpur.
Remali Yusoff, Margaret Chee and Zulkefli Senteri (1998). Supply and demand Model of the Malaysian Cocoa Industry, Borneo Review, 9(1),pp:67-86.
Rosdi M. L. (1991). An econometric Analysis of the Malaysian Cocoa Prices: A Structural Approach, Masters Thesis , UPM.
Schuh, G. E. (1974). The Exchange Rate and U.S. Agriculture. American Journal of Agricultural Economics, 56, 1-13.
Shamsudin, M. N., Rosdi, M L. and Ann, C. T. (1993). Malaysian Cocoa Market Model. In Arshad, F.M., Shamsudin, M.N. and Othman, M.S. (Eds) Malaysian Agricultural Commodity Forecasting and Policy Modelling. UPM: Center for Agricultural Policy Studies.
Yusoff, Mohammed (1988a). “Malaysian Natural Rubber Market Model.” Pertanika, II (3): 441- 449.
Yusoff, Mohammed (1988b). “Production and Trade Model for the Malaysian Palm Oil Industry.” Asean Economic Bulletin: 169-177.
Yusoff, Remali, Margaret Chee and Zulkefli Senteri (1998). “ Supply and Demand Model of the Malaysian Cocoa Industry” , Borneo Review, 9 (1) pp: 67-86.