Vol. 14 (1) March 2014 – OPIEJ https://opiej.mpob.gov.my Oil Palm Industry Economic Journal Thu, 21 Mar 2019 03:47:22 +0000 en-US hourly 1 https://wordpress.org/?v=7.0 The Impact of Palm Oil Mills’ Capacity on Technical Efficiency of Palm Oil Millers in Malaysia https://opiej.mpob.gov.my/the-impact-of-palm-oil-mills-capacity-on-technical-efficiency-of-palm-oil-millers-in-malaysia/ Tue, 28 Aug 2018 14:45:46 +0000 https://opiej.mpob.gov.my/?p=348 Read more]]> The general purpose of this study is to evaluate technical efficiency of palm oil mills in Malaysia. Specifically, the study attempts to examine if large mills are more efficient than small mills as well as to compare technical efficiency between integrated and non-integrated mills. In order to fulfill the objectives, econometric approach was used whereby crude palm oil production function was estimated by using OLS least squared technique. The Cobb-Douglas production model was used and the model is satisfactory in terms of goodness of fit. This is shown by the values of R2 (0.89) as well as F statistic (358.03). From the study, it was found that palm oil mills in Malaysia are technically efficient. In terms of processing capacity, large mills which have processing capacity more than 20 t/hr are more efficient than small mills. Integrated mills are also technically efficient as compare to non-integrated mills.

Keywords: palm oil, technical efficiency, FFB, processing, capacity

]]> Malaysian Palm Oil – Moving Ahead to Sustainable Production Growth https://opiej.mpob.gov.my/malaysian-palm-oil-moving-ahead-to-sustainable-production-growth/ Tue, 28 Aug 2018 14:40:31 +0000 https://opiej.mpob.gov.my/?p=346 Read more]]> Malaysian palm oil production has surged in recent decades and the palm oil industry has been transformed to become Malaysia’s key socioeconomic driver. Plans are underway to ensure palm oil continues to be a major growth engine and its production remains sustainable in the future. While undergoing the process of transformation, the industry faces such major issues as labour and land availability that can hinder the sustainability of production growth. This article highlights the continuous efforts made to sustain production growth in Malaysia in the future, focusing on increasing land productivity, replanting, promoting mechanisation and upgrading labour skills. In addition, the article also forecasts long-term palm oil production until 2020, the year targeted for the transformation of Malaysia into a high income economy.

Keywords: palm oil, sustainable production, production growth, production
forecast

]]> The Co-operative Benefits of Malaysia and Indonesia in Palm Oil https://opiej.mpob.gov.my/the-co-operative-benefits-of-malaysia-and-indonesia-in-palm-oil/ Tue, 28 Aug 2018 14:38:50 +0000 https://opiej.mpob.gov.my/?p=344 Read more]]> The article has argued that the rising competition between Malaysia and Indonesia is affecting the palm oil industry in totality. The recent phenomenon of palm oil playing a role in Chinese shadow banking has also contributed to the depression in palm oil prices, particularly in 2013. With these in mind, and through the use of Prisoner’s Dilemma game theory, the article argues for both Malaysia and Indonesia to institutionalise co-operation, rather than compete strongly, through the setting up of a palm oil producing and exporting countries organisation (POPEC). This is aimed at better management of the supply and inventory of palm oil in the global market in line with global demand conditions.

Keywords: palm oil, competition, Malaysia, Indonesia, game theory,
comparative advantage, downstream, upstream, shadow banking

]]> The Effect of Progressive Export Tax on Indonesian Palm Oil Industry https://opiej.mpob.gov.my/the-effect-of-progressive-export-tax-on-indonesian-palm-oil-industry/ Tue, 28 Aug 2018 14:37:17 +0000 https://opiej.mpob.gov.my/?p=342 Read more]]> The government of Indonesia imposed export tax on crude palm oil (CPO) and its derivatives since September 1994 and in September 2007, the progressive export tax was implemented. This policy has two objectives, first is to guarantee the availability of domestic CPO as the main raw material of cooking oil which is one of the staple products of Indonesia. Secondly, is to develop the downstream industry of the palm oil industry which has higher value-added compared to CPO. By limiting CPO export, hopefully the CPO will be utilised to produce higher value-added product. The objective of this article is to analyse the effect of export tax on Indonesian palm oil industry. The results indicate that export tax will decrease domestic CPO price, production, export and competitiveness. The policy will make producers worse off while consumers and cooking oil producers will be better off. On the other hand, the policy is able to increase the refined palm oil export and stabilise the cooking oil price.

Keywords: export tax, crude palm oil, Indonesian palm oil industry

]]>