Oil Palm Industry Economic Journal Vol. 9 (2) September 2009 p. 31-40

The Impact of Petroleum Prices on Vegetable Oils Prices: Evidence from Co-integration Tests

Amna Awad Abdel Hameed and Fatimah Mohamed Arshad
Received:    Accepted:    Available Online:


The prices of petroleum and vegetable oils appear to be moving in tandem, a trend which was not observed before. This study seeks to investigate the long-term relationship between the prices of crude oil and selected vegetable oils. To that end, the bivariate co-integration approach using the Engle-Granger two-stage estimation procedure was applied. The study utilized monthly data over the period of January 1983 through March 2008. The results provide strong evidence of a long-run relationship between the two product prices.

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