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ABSTRACT |
Impacts
of CPO-Export Tax on Several Aspects of Indonesian CPO Industry
To control domestic supply and price of
crude palm oil (CPO) and cooking oil, the government of Indonesia has
imposed CPO-export tax since August 1994. As the CPO industry plays
an important role in Indonesian economy, the imposition of the tax is
expected to have substantial impacts on various aspects of the industry,
such as on investment, production, trade, farm income and welfare distribution.
The main objective of this study is to assess these impacts using an
econometric model of the industry. The results of the study reveal that
the export tax policy has inhibited the growth rate of investment, production,
export and farm income. On the other hand, this policy has been an effective
instrument to control domestic CPO and cooking oil price. Moreover,
this policy has caused a substantial welfare transfer from producers
to consumers and the government. To compromise these conflicting impacts,
an alternative CPO tax formula is also proposed in this paper.
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Comparative
Advantage of the European Rapeseed Industry vis-a-vis Other Oils and
Fats Producers
Rapeseed production in Europe
currently constitutes to nearly one-third of the world output of about
28 million tonnes although its area is three times smaller than that
in China. This paper attempts to assess its competitiveness vis-à-vis
26 other oils and fats producing countries [with special reference to
other rapeseed oil producers, the least cost producer of vegetable oil
and Malaysia (in the production of palm oil)]. Three economic comparisons
will be used, i.e.; economic advantage, comparative advantage and structural
competitiveness.
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Improving
the Price Forecast of Crude Palm Oil Futures Using Historical Return
Variances
This paper attempts to investigate
the price relationship between the spot and futures prices of crude
palm oil contracts traded in the Malaysian Derivatives Exchange. Using
historical variances of spot and futures price returns, we applied a
model for approximating the convenience yield developed by Longstaff
(1995). This model was then tested on the actual crude palm oil prices
for the spot-month and three-month contracts from January 1988 to December
2002, to determine the forecasting accuracy of this model relative to
the simple cost-of-carry model. There was some improvement in the predictive
ability of this approach which could be attributed to the inclusion
of historical return variances. The improvement was also evident when
tested against out-of-sample data, suggesting that the inclusion of
historical return variances in the form of the convenience yield could
provide a better forecast of crude palm oil futures prices.
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Economic
Feasibility of Organic Palm Oil Production in Malaysia
The importance of organic farming
has increased due to its environmentally friendly methods and growing
consumer awareness of food safety. Based on estimates, world retail
sales of organic foods will reach USD 29-USD 31 billion in 2005. Producing
palm oil by organic cultivation is highly possible in Malaysia since
many oil palm agronomic practices in the country already have minimum
environmental impacts and are moving towards even more eco-friendly
methods. The command of a premium price is the main attraction for investment
in organic food production.
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