A study on the relationship between Malaysia’s crude palm oil price and its productions, stock and demand on different economic situation / Raja Mohamad Shahrimi Raja Ibrahim

Malaysia and Indonesia are the largest and second largest producers and exporters of palm oil products in the world where both of them contribute about 83.5% of the productions and 89.6% of palm oil trade in the world. Both countries export crude palm oil (CPO) and processed palm oil (PPO). The trends of exports indicate Malaysian exporting increasing of CPO in the new millennium when CPO export increased from 0.4 MT to 1.3 MT in 2000 and 2001 respectively. Currently, Malaysia is the largest producer and exporter of CPO in the world. This paper attempts to identify the factors that affect the price of CPO. This study focuses on the relationship between production, stock and demand with the price of CPO on different economic situation. The dependent variable for this study is the price of CPO and the independent variables are production, stock and demand. The data of the variables are collected on monthly basis, which are 132 months from January 1995 to December 2005. In order to see the result, the regression technique is SPSS programme will be used as the research methodology. The method is chosen because it is one of the appropriate methods in completing this study. The coming result will be used as guidelines and recommendations. The result will indicate the significance of the study regarding the relationship between production, stock and demand with the price of CPO.