one by one using econometric.
1.4 Significance of the research
Researcher
This research suitable for the researchers who wants to gain knowledge and information about palm oil in Malaysia. All this information gather from internet, journal, and by result from E-Views. So all society especially researcher will gain knowledge on the study about determinant of the price of palm oil in Malaysia.
Palm Oil Industry
The palm oil companies also can get benefit from this research by knowing the factor that will influence the price of palm oil respectively. If palm oil companies already knew what the factor can influence the price of palm oil, the palm oil companies increased the export of palm oil and our country also can get higher income because of the production of palm oil.
Labor Study
Labor can know what are the big factor that can influence the price of palm oil, and then can their can increase performance in terms of work quality and many more.
1.5 Scope and Limitation of the study
The scope of this study is around Malaysia and the data collected on production of palm oil, export of palm oil, consumption of palm oil, and plantation of palm oil in land area (hectares). This data from year 1980 to 2009, involved 29 years. The data for 2010 also hard to find because year 2010 is not finished yet. So the data for 2010 is not stated yet.
CHAPTER TWO
LITERATURE REVIEW
The previous study has been made to understand the impact of palm oil based-biodiesel demand on palm oil prices (Ramli; Roslan and Ayatollah, K 2007). Nowadays biodiesel has become an important fuel to our society. It is because of the growing concern for the environment. Demand for the biodiesel has become higher, and that effect to the amount of palm oil that we can get in the market that putting its prices increased sharply since July 2006. That days, the prices of palm oil influenced by the stock, supply, production. From July 2006 onwards, biofuel become a serious fuel of his renewable production. Biodiesel mainly from palm has increased the demand and altered the economics of palm oil. This study using the autoregressive integrated moving average (ARIMA). This method has been proven to forecast from July 2006 to end 2007 to forecast the prices of palm oil.
Supporting to this journal, the prices of petroleum and vegetable oil down to be moving slowly together. (Anna Awad, Fatimah, 2009). This previous studies have been made to find the long term relationship the prices of crude oil and vegetable oil. They were using the Engle-Granger two-stage to do the method. This study use data over the period from January 1983 to March 2008. The two products show the result of the strong evidence of a long relationship. Began in the 1970s until 21 century, the price for all commodities increased between January 2000 and March 2008. The increased of the prices caused by the increased petroleum price more than 300%, while food prices increased 107% during the same period and vegetables oil increased of 192%.
Besides that,(Mohd Nasir, 2003) said that Malaysia is the largest producer and Indonesia is the second largest producer. This two country is the exporter where they contribute 89.6% of palm oil trade in the world and 83.5 % of production. They also export crude palm oil (CPO) and other than that processed pa
