INDONESIAN CRUDE PALM OIL MARKET DEMAND AND SUPPLY ANALYSIS

Endra Setiaji, Prof. Dr. Tri Widodo, M.Ec., Dev.

2013 | Tesis | S2 Ilmu Ekonomi dan Studi Pembangunan

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The purpose of this research is to determine the determinant of supply and demand of world crude palm oil (CPO) market, further on its elasticity. The outcome of this research is expected to be useful in the public policy making, especially regarding to the CPO trade in Indonesia, like export tax policy. The data used are secondary information, particularly from FAOSTAT and World Bank Data. The problem in this study were analyzed by using the log-linear demand and supply model or constant elasticity model. In this study, the simultaneity problem test is conducted to analyze the potential of endogeneity problem that theoretically arise in demand and supply model. The results from the study shown support all hypothesis in this research that price of CPO, price of soybean oil, and income from consumer countries are significant determinant to the demand of CPO in the world. On the other hand, in the supply side, the price of CPO, the area and yield of production become the significant determinant. The application of those results also try to be presented in this study.

Kata Kunci : Crude Palm Oil (CPO), demand, supply, elasticity, endogeneity problem, export tax.