ABSTRACT:
This study analysed the extent to which Malaysia had a comparative advantage over Indonesia in crude palm oil (CPO) and processed palm oil (PPO) exports to five major markets, namely, China, India, the European Union (EU), Pakistan and the USA. In addition, this study examined how Malaysia’s competitiveness and comparative advantage changed over the period 1999-2014 in major markets by adopting a widely used Revealed Comparative Advantage (RCA) index. The results suggest that Malaysia retained its comparative advantage in exporting CPO to Pakistan from 2009 to 2014 and started to gain comparative advantage in exporting CPO to India in 2014. Meanwhile, for PPO market, Malaysia sustained its comparative advantage in the USA along the study period, but gradually reduced comparative advantage onset 2012. In Pakistan, the study found that Malaysia started to lose comparative advantage for PPO to Indonesia in 2012 and 2014.
Keywords: trade, revealed comparative advantage, export competitiveness, palm oil, CPO, PPO, Malaysia, Indonesia, China, India, EU, Pakistan, USA
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