Palm oil supply and demand characteristics and behavior: a system dynamics approach
Like other commodities, palm oil is characterized by common commodity cycles in the market. However, in this study, we argue that the palm oil market has distinctive traits compared to other commodity markets with regard to the cobweb theorem by elaborating on the characteristics of the Malaysian pa...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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University of Kassel
2018
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| Online Access: | https://repo.uum.edu.my/id/eprint/26019/1/JFAS%206%201%202018%208%2019.pdf |
| _version_ | 1803629045725790208 |
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| author | Faeid, M Zabid M Zainal Abidin, Norhaslinda Applanaidu, Shri Dewi |
| author_facet | Faeid, M Zabid M Zainal Abidin, Norhaslinda Applanaidu, Shri Dewi |
| author_sort | Faeid, M Zabid M |
| collection | UUM |
| description | Like other commodities, palm oil is characterized by common commodity cycles in the market. However, in this study, we argue that the palm oil market has distinctive traits compared to other commodity markets with regard to the cobweb theorem by elaborating on the characteristics of the Malaysian palm oil market and its basic underlying behavior. In an attempt to understand the behavior of the industry, researchers had been changing the paradigm of modelling the palm oil market by using the operationally-based modelling approach (like system dynamics - SD-) rather than the observationally-based modelling approach (like econometrics). Thus, we propose a basic SD model of the palm oil market based on the Malaysian palm oil industry and tested its capability to replicate the real situation in the palm oil market. Five placeholder variables are included in the model to represent the exogenous factors influencing the key variables. Findings from the simulation-based run show that the palm oil market produces a fluctuating pattern of its key variables ceteris paribus, as suggested in cobweb theorem. For future works, further disaggregation of the key variables and exogenous factors is possible, thus adding model complexity in order to achieve specific objectives. This study contributes by setting up the fundamental structure of the market model for palm oil and other similar commodities. |
| first_indexed | 2024-07-04T06:31:37Z |
| format | Article |
| id | uum-26019 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T06:31:37Z |
| publishDate | 2018 |
| publisher | University of Kassel |
| record_format | dspace |
| spelling | uum-260192019-05-08T07:04:44Z https://repo.uum.edu.my/id/eprint/26019/ Palm oil supply and demand characteristics and behavior: a system dynamics approach Faeid, M Zabid M Zainal Abidin, Norhaslinda Applanaidu, Shri Dewi HC Economic History and Conditions Like other commodities, palm oil is characterized by common commodity cycles in the market. However, in this study, we argue that the palm oil market has distinctive traits compared to other commodity markets with regard to the cobweb theorem by elaborating on the characteristics of the Malaysian palm oil market and its basic underlying behavior. In an attempt to understand the behavior of the industry, researchers had been changing the paradigm of modelling the palm oil market by using the operationally-based modelling approach (like system dynamics - SD-) rather than the observationally-based modelling approach (like econometrics). Thus, we propose a basic SD model of the palm oil market based on the Malaysian palm oil industry and tested its capability to replicate the real situation in the palm oil market. Five placeholder variables are included in the model to represent the exogenous factors influencing the key variables. Findings from the simulation-based run show that the palm oil market produces a fluctuating pattern of its key variables ceteris paribus, as suggested in cobweb theorem. For future works, further disaggregation of the key variables and exogenous factors is possible, thus adding model complexity in order to achieve specific objectives. This study contributes by setting up the fundamental structure of the market model for palm oil and other similar commodities. University of Kassel 2018 Article PeerReviewed application/pdf en https://repo.uum.edu.my/id/eprint/26019/1/JFAS%206%201%202018%208%2019.pdf Faeid, M Zabid M and Zainal Abidin, Norhaslinda and Applanaidu, Shri Dewi (2018) Palm oil supply and demand characteristics and behavior: a system dynamics approach. Future of Food: Journal on Food, Agriculture and Society, 6 (1). pp. 8-19. ISSN 2197411X http://www.fofj.org/index.php/FOFJ/article/view/4 |
| spellingShingle | HC Economic History and Conditions Faeid, M Zabid M Zainal Abidin, Norhaslinda Applanaidu, Shri Dewi Palm oil supply and demand characteristics and behavior: a system dynamics approach |
| title | Palm oil supply and demand characteristics and behavior: a system dynamics approach |
| title_full | Palm oil supply and demand characteristics and behavior: a system dynamics approach |
| title_fullStr | Palm oil supply and demand characteristics and behavior: a system dynamics approach |
| title_full_unstemmed | Palm oil supply and demand characteristics and behavior: a system dynamics approach |
| title_short | Palm oil supply and demand characteristics and behavior: a system dynamics approach |
| title_sort | palm oil supply and demand characteristics and behavior a system dynamics approach |
| topic | HC Economic History and Conditions |
| url | https://repo.uum.edu.my/id/eprint/26019/1/JFAS%206%201%202018%208%2019.pdf |
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