Top PDF Impact of Biodiesel Demand on the Malaysian Palm Oil Market

Impact of Biodiesel Demand on the Malaysian Palm Oil Market

Impact of Biodiesel Demand on the Malaysian Palm Oil Market

The study uses econometric modelling involving simultaneous system of nine structural equations and four identities. The estimators of the structural parameters were derived with the two stage least squares (2SLS) method using annual data for the period 1976-2009. The structural relationships were validated with Theil’s inequality coefficients (U-Theil), the root mean squares percentage errors (RMSPE) and turning points. The 2SLS model was used for simulation of counterfactual and scenario analysis. The econometric simulation consists of two parts. The first part consists of counterfactual analysis. A ‘shock’ was injected into the system by indicating two levels of crude oil prices (i.e., 20 percent increase and decrease in crude oil prices; 30 and 60 percent increase in biodiesel demand). The impact of these change on endogenous variables were then estimated. The second part was the ex-ante simulation scenario analysis. The forecast was carried out for the years 2010 to 2015 before the ex-ante simulation exercise.
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Marketing Risk Management of Palm Oil Based Biodiesel Agroindustry

Marketing Risk Management of Palm Oil Based Biodiesel Agroindustry

Engineering decision support system (DSS) agro-industry strategy to overcome the risk of palm-based biodiesel can improve the effectiveness of risk management. This study uses a systems approach to the output of a conceptual model to overcome the risk of biodiesel palm oil -based agro- industry. In particular, this model is constructed by soft system methodology , particularly using Analytical Hirarchy Process (AHP). This method uses knowledge as a tool of analysis and interpretation , produces Biodiesel marketing DSS software is useful for marketing analysis and risk management. Each risk analysis model using fuzzy non- numeric method of Multiple Criteria Decision Making Multi Person. At the risk of agro-industry of biodiesel marketing, occurred at the highest risk elements of government policy. Factors that influence government policy of AHP analysis results in a row is market demand (0.33), the availability of quality raw materials ( 0.26), the price of raw materials (0:17), biodiesel quality standards (0:13), and infrastructure (0:08).
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Supply and Demand Model for the Malaysian Cocoa Market

Supply and Demand Model for the Malaysian Cocoa Market

The main objective of this paper is to examine the market variables of the Malaysian cocoa. The SUR technique is employed to investigate the domestic supply, foreign demand, and domestic price responses to the main determinants. All the models are consistent with theory as all the variables carried the correct signs. The models are diagnosed for the appropriate specification. The results of the diagnostics test indicate that the model described in methodology section is the proper specification to examine the supply and demand response. Moreover, the models are satisfactory in terms of their explanatory powers ranging from quite high to very high. The findings indicate that the cocoa production is determined by its own and palm oil price lagged two years, planted area and the previous year production. The Malaysian cocoa beans exports are influenced by cocoa world price and the real effective exchange rate of the Malaysian ringgit. The domestic demand appears to be dependent on its own price and the economic activity of Malaysia. The previous year domestic price as well as the world price of cocoa emerged to be key factors influencing its current price. The price is also affected to less extent by the demand whereas stock level is found to be an insignificant factor. The estimated model appears to explain the cocoa market in terms of its major structural elements, supply, demand and price. However, the study does not address the development of the cocoa grinding industry which is experiencing a rapid growth in the last decade. Hence, to have a complete picture of the cocoa industry, further research is required to analyse the grinding industry in detail and its relation to the other cocoa sub-sectors as well the relevant manufacturing sectors.
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Factors Influencing Malaysian Palm Oil Export Demand in Long-Run and Short Run

Factors Influencing Malaysian Palm Oil Export Demand in Long-Run and Short Run

Palm oil is an edible vegetable oil derived from the fresh fruit bunch of the oil palm trees. Nowadays, palm oil is widely used by the world population’s daily life – food and non-food products. Compare to the other vegetable oils such as sunflower oil and soybean oil, palm oil is more cost effective. Palm oil can be produced with a lower cost and selling at the lower price than other edible vegetable oils. Due to the higher demand for palm oil in the international market, there are so many countries are interested to plant the oil palm and produce the palm oil products in their country such as Indonesia, Thailand, Columbia, and Nigeria. In recent, Indonesia and Malaysia both are the main countries to produce and to export the palm oil products in the global market.
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Sustainability in the Malaysian palm oil industry

Sustainability in the Malaysian palm oil industry

With a rapidly growing world population, the demand for palm oil is increasing. In 2010, palm oil accounted for 36.5% of the world’s vegetable oil production and it is projected to be the leading vegetable oil in the world by 2016. As the Malaysian palm oil industry is committed to delivering sustainable palm oil products to meet customer demand, this research was to enable identification and prioritisation of areas for improvement. As an example, the Roadmap of Malaysian Palm Oil Industry 2009-2020 was finalised as one of its strategies to attain sustainable production of palm oil and improvement in the quality of planet, people and profit. These include the implementations of Environment Management Systems (since 2004) and National Life Cycle Assessment Project (since 2006). The implementation of carbon footprint labelling is currently being carried out under the National Carbon Footprint Labelling Scheme (2011-2015) by the Standards and Industrial Research Institute of Malaysia (SIRIM) as part of continuous improvements for the delivery of sustainable palm oil products. Current approaches used for governing sustainable palm oil products are unsatisfactory due to limitations such as lack of potential impact models, data availability and uncertainty of impact results. Hence, this research addressed the need to improve understanding of having clear information requirements based on the different impacts in the Malaysian palm oil industry supply network tiers. Simulation experiments were then used to explore the aggregation of these information requirements across the Malaysian palm oil industry supply network. Agent-based and system dynamics modelling techniques were applied to simulate the behaviours of different entities and their interactions in the plantation, mill and mill-refinery models. These simulation techniques were able to build understanding on how information could be linked throughout the different tiers in the supply network. In order to have significant results, the output of the models of each tier must be linked (e.g. the mill and refinery models were linked together).
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The Empirical Analysis on Prices of the Malaysian Crude Palm oil Futures Market

The Empirical Analysis on Prices of the Malaysian Crude Palm oil Futures Market

Another definition is that the efficiency of a market refers to the performance of its functions in facilitating transactions and improving on the terms of transactions (Burns, 1983). According to this definition, the efficiency of a market can be related to three aspects: transaction costs, liquidity and pricing efficiency. Pricing efficiency reflects the degree to which an asset’s price reflects to demand and supply conditions in a market. Pricing efficiency is defined to include two elements: the degree to which an asset’s price is determined by competitive prices and the speed with which an asset’s price reflects changes in information. According to Hawawini (1993), there are two kinds of efficiency: informational efficiency and operational efficiency. Informational efficiency refers to the performance of a market as an information processor and a price setter whereas operational efficiency refers to the performance of a market as an exchange system. If the market is informationally efficient, then it means that the market is able to process information and the securities prices in that market reflect all that is known about the firms. A market can be operationally efficient in the sense that it offers an inexpensive and reliable trading mechanism. It can be stated that the informational and operational efficiency is related; poor operational efficiency may delay the adjustment of prices to new information and prevent them from reaching their equilibrium value. As a consequence, in an efficient market, securities will be traded at price, which is close to their true value, and investors will be unable systematically to earn above normal profits.
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Competitiveness of Malaysian palm oil in the world market / Nurul Masniza Mohd Sobri

Competitiveness of Malaysian palm oil in the world market / Nurul Masniza Mohd Sobri

Since the last decade the demand for vegetable oils has been growing strongly due to increase in global population and oils consumption. Palm oil also is one of the most important vegetable oils in the world and each year million tonnes of palm oil has been traded globally to be consumed by million people around the world. Malaysia is the second largest producer of palm oil after Indonesia and become the most important industry in growth and development of Malaysia economic. Regarding the matter, the aim of the study is to determine the production of palm oil in the world market, to identify the rate of Malaysia trade of palm oil importer and exporter in the world market and to measure the sustainability status of Malaysia palm oil industry development. In this study, the data uses were collected from FOASTAT, Index Mundi and Department of Statistic (Malaysia) from period 1961 until 2013. The methods used to answer the first objective is by using graph analysis. Whereas, for the second objective is by using Revealed Comparative Advantages (RCA) and Herfindahl Hirschman Index (HHI) method and Self-Sufficiency Ratio( SSR) and Import Dependence Ratio (IDR) method is used to answer the third objective. The result concluded that RCA for Malaysia palm oil industry is more than 1 (RCA= 2.3), which signifies that Malaysia is relatively more specialized in palm oil industry. HHI results calculated that the market share is 4629.67, which means Malaysia palm oil industries at the world market highly concentrated. The average percentage of SSR for Malaysia is more than 100% and the average percentage of IDR is 10%-40%. Its show Malaysia able to develop without strong dependence from other countries that produce palm oil. This clearly pointed out to the fact that Malaysia was strong in exporting of palm oil.
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Do spot and future palm oil prices influence the stock market prices of a major palm oil producer? the Malaysian experience

Do spot and future palm oil prices influence the stock market prices of a major palm oil producer? the Malaysian experience

The VECM results in Table 5 indicated that all the variables are exogenous except for 3 endogenous variables, namely, consumer price index, industrial production index and interest rates through the statistical significance of the t-test of the error-correction term and F-test of the independent variables. It is not surprising that these variables are the most endogenous since the Malaysian Government seemed to focus on boosting economic growth during the period. This meant that these variables are policy instruments used to achieve such an objective. In order to boost the economic growth, the real economic activity is stimulated through various fiscal and non-fiscal incentives for specific industries and manufacturers while inflation rate is kept within a reasonable level through the setting of ceiling prices on a basket of consumer goods. Likewise, interest rates are controlled by the Central Bank through its overnight policy rates which has a direct impact of bank’s lending rates and capital reserves. Intuitively, the mechanics behind the VECM results implied that stock market prices, spot and futures palm oil prices, exchange rate, and money supply are the initial receptors of an exogenous shock to the long-term equilibrium relationship while interest rate, inflation rate and real economic activity had to bear the burden of short-run adjustment endogenously in different proportions to bring back the system to its long-term equilibrium.
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Biodiesel from Palm Oil as an Alternative fuel for Indonesia: Opportunities and Challenges

Biodiesel from Palm Oil as an Alternative fuel for Indonesia: Opportunities and Challenges

Despite the growing production of palm oil, its price has fallen since 1997 after reaching a peak in 1996 of about US$671 per tonne (Figure 2). The main reason for the price surge in 1998 was market panic in Europe, following riots in Sumatra in particular and Indonesia in general. The European market was concerned as 80 percent of Indonesian palm oil exports went to EEC countries in the form of crude palm oil. As the situation in Indonesia improved, the palm oil businesses watched the supply and demand imbalance of palm oil stock drove the palm oil price down to US$436 per tonne in 1999. The decline in world palm oil price (Figure 2) continued until the end of 2001 to US$286 per tonne, before it picked up in 2002 . Although no official data is available to account for the losses, many confirmed that smallholder plantations are those that have suffered most from the sharp palm oil price decline. Producers often left their mature fruit to rot on the trees since the price of the Fresh Fruit Bunch has dropped below their minimum operating cost.
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Impact of crude palm oil export duties on Malaysian palm oil industry

Impact of crude palm oil export duties on Malaysian palm oil industry

Malaysia and Indonesia are the world’s largest producers of palm oil. Both countries export crude and processed palm oil. Since Malaysia and Indonesia are close competitors and they compete in the same market, a change in export duty rate in one country will affect the other. Indonesia, as the world's biggest palm oil producer, has drastically widened the gap between the crude palm oil and refined palm oil export taxes since October 2011, to encourage more downstream investments and production of refined palm oil products. Under the revised export duty structure, crude palm oil and crude palm kernel oil are cheaper for downstream activities in Indonesia. The new structure is expected to reduce Malaysia’s competitiveness in the world market as its export duty is relatively higher. Realizing this fact, Malaysia has reduced the export duty structure to be in line with the Indonesia’s duty structure (MPOB, 2013).
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The Impact of Palm Oil Price on the Malaysian Stock Market Performance

The Impact of Palm Oil Price on the Malaysian Stock Market Performance

Financial market history shows that stock price is subjected to substantial fluctuations. Generally, stock price will move up when there are good news, and move down when there are bad news. The news can be from the market itself, the economy or from the events that happen in the company. In that case, there are a lot factors that can be considered to examine the fluctuations in the stock market. In order to verify which variables to be selected for this particular study, this section would provide a review on past literature. Even though there are a lot of studies examining the stock price behavior, country of study, period of study and the technique used may influence the results. In examining the long run and short run relationships between macroeconomic variables and the Malaysian stock market index, Bekhet and Mugableh (2012) discover that there is a cointegration relationship between macroeconomic variables of GDP, producer price index, CPI, M3 and exchange rate with the Malaysian stock market index for the period of 1977 to 2011. The PPI, CPI, exchange rate and M3 are found to have negative relationships with the stock market index, while the GDP is found to have a positive relationship with the stock market index in the long run. For the short run results, only GDP is found to exert a significant positive impact on the stock market index. Similarly, Rahman, Sidek and Tafri (2009) examine the relationship that exists among the Malaysian stock market index and selected macroeconomic variables for the monthly data of January 1986 to March 2008. Their VECM results indicate that there is cointegration relationship between the Malaysian stock market index and macroeconomic variables of money supply, interest rate, exchange rate, reserves and industrial production index. In addition, their study also shows that the Malaysian stock market has stronger dynamic interaction with reserves and industrial production index as opposed to money supply, interest rate and exchange rate.
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Environmental Sustainability Drivers: A Study on Malaysian Palm Oil Industry

Environmental Sustainability Drivers: A Study on Malaysian Palm Oil Industry

With the rapidly growing world population, the demand for palm oil is increasing. Among the 17 world major oils and fats, palm oil has made impressive and sustained growth in the global market. In 2008, palm oil accounted for 54% of the world’s production of oils and fats; it is projected that palm oil will become the leading oil in the world around year 2016 (Oil World 2009). Malaysia is the world’s second largest producer and exporter of palm oil after Indonesia; in 2007 it produced about 15.8 million tons of palm oil. In year 2020, production is forecast to increase to 18.5 million tons (Oil World 2009). Key challenges to the palm oil industry include misconceptions on palm oil sustainability and awareness of its potential in the global vegetable oil market, consumer demands for certification of products and processes and the competitiveness on the triple bottom line performances as uncertainties to the supply network. Sustainability of palm oil is important if this versatile crop is to become the leading vegetable oil in the world. This multipurpose vegetable oil needs to be cultivated to ensure sustainable development from the environmental, social and economic aspects. With the world’s population expected to increase to 8 billion in 2028, palm oil has the potential to be the source of fats and vegetable oil to feed the people around the globe (Basiron 2006; Basiron 2009). As high demand of cheap and quality vegetable oil is needed to feed the world’s growing population, building a tool to improve the performance of sustainability of the palm oil supply chain network involving real-time data is necessary in order to achieve sustainable production. In this context, all parties involved with palm oil like plantation owners, financial institutions and banks, manufacturers of palm oil products and governments play an active role to realise this win-win situation for all. Hence, the time has come for all parties to co-operate and realise a sustainable production and development of palm oil. Ideas and efforts will become futile if all parties do not take an active and responsible role towards this aim as sustainable development of palm oil requires collaboration and initiative among the stakeholders.
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Comparative Study on Characterization of Malaysian Palm Oil Mill Effluent

Comparative Study on Characterization of Malaysian Palm Oil Mill Effluent

Currently, one of the challenging problems faced by Malaysia and many countries in the world is how to manage all type of wastes especially liquid wastewater. Many researchers around the world have studied the characteristics and treatments of various type of liquid wastewater, including synthetic wastewaters 9.10.11 . Oil palm industry needs to conduct a characteristic study on POME because the characterization would provide the necessary information for a proper POME treatment plant design and monitoring purposed. Thus, in this study comparing comparison of the characteristics of POME between the current and previous studies are conducted. The POME characteristics from previous research data are presented in table-3.
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FORMULATION OF RELATIONSHIP BETWEEN VISCOSITY AND TEMPERATURE FOR PALM KERNEL OIL BIODIESEL

FORMULATION OF RELATIONSHIP BETWEEN VISCOSITY AND TEMPERATURE FOR PALM KERNEL OIL BIODIESEL

Several feedstocks have been considered for production of biodiesel in different parts of the world. There are reports on efforts of researchers on Canola in Canada, China, India, France, Austria and Germany (as reported in Marchetti, 2009); Corn in USA, Mexico, Russia and the United Kingdom (Nisa and Hamzah, 2012; Anastopoulus et al., 2013; Alhassan et al., 2014); Soybean in USA, Argentina, Brazil, India and China (Kim et al., 2010; Gomes et al., 2011; Pisarello et al., 2014); Sunflower in Russia, Argentina, France, Italy and Germany (Sankaranarayanan, 2012; Saba et al., 2016); Coconut in Malaysia, Vietnam, Mozambique, Bangladesh and Ghana (Sulaiman et al., 2010; Hossain et al., 2012); Jatropha curcas in India, Yemen and Nigeria (Baggash and Abdulrahman, 2010; Umaru and Aberuagba, 2012) and Palm oil as well as Palm kernel oil in Malaysia, Indonesia, China, Mexico, Colombia, Cote d’Ivoire, Ghana and Nigeria (Alamu et al., 2007,2009; Suppalakpanya et al., 2010; Baroutian et al., 2012; Shahla et al., 2012; Lee and Ofori-Boateng, 2013; Noipin and Kumar, 2014; Wong et al., 2015).
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Biodiesel Production from Unrefined Palm Oil on Pilot Plant Scale

Biodiesel Production from Unrefined Palm Oil on Pilot Plant Scale

Traditional technologies mainly used for crude palm oil extraction in developing countries are responsible for high water content, which consequently increases FFA content with oil aging [13, 16]. The common solution to overcome this issue is the use of refined oil. However, a system processing biodiesel from refined palm oil is technically successful, but not economically viable compared to using crude raw materials with pretreatment. In fact, refining will bring in FFA reduction, deodorization and bleaching, and require additional manpower and equipments, which will definitely increase the production cost [17]. Moreover, Dominik R. and Rainer J. argued that FFA which should have been converted into FAME is lost through refining, thus resulting in a decrease of the overall yield, especially if the feedstocks FFA content is high [12]. To this add the issue of cold flow properties of biodiesel which is a function of fatty acid composition. Since the type of feedstock plays an important role regarding the impurities and ways they must be removed, biodiesel from unrefined palm oil must be thoroughly purified and handled carefully. In fact, monoglycerides and sterol glucosides are at the origin of precipitations in biodiesel. Sterol glucosides are not soluble in biodiesel and crystalize slowly as the biodiesel cools down, and initial biodiesel seems to meet specification but after few days of storage filterability issue shows off. Sterol glucosides which are considered as dispersed fine solid particles as low as 35 ppm may accelerate crystallization and coprecipitation of other compounds and creation of deposits in the biodiesel. Those deposits are at the origin of filter clogging at temperatures even above cloud point [18]. Furthermore, unrefined palm oil produced by traditional presses contains too much solid materials like sludges, fiber, palm seeds, leaves, and cakes which need to be removed before any pretreatment.
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Optimal hedge ratio and the hedging performance of commodity futures: the case of Malaysian crude palm oil futures market

Optimal hedge ratio and the hedging performance of commodity futures: the case of Malaysian crude palm oil futures market

Following the Asian financial crisis in 1997, Malaysian derivatives went through restructuring and emerged in 2003 as a Bursa Malaysia Derivatives’ (BMD). FCPO has been continuing its trading since then under the BMD. In 2009, CME (Chicago Mercantile Exchange) took a 25% stake in BMD and in 2010, all BMD products were listed and traded on the CME operated GLOBEX trading platform (The world’s leading electronic trading platform) which allows individual and professional traders anywhere around the world to access all Bursa Malaysia Derivatives products. Via FCPO, global fund managers, commodity trading advisers and proprietary traders can gain immediate exposure to the commodity market in Malaysia. Today CPO futures is traded at a number of derivatives exchanges around the world but more popularly traded in BMD and CME. Crude Palm Oil futures traded in BMD is available in both Ringgit Malaysia and USD-denominated contracts. It is a cash settle or physically deliverable contract. The crude palm oil futures traded at CME uses the CPO symbol and is available in USD denominated contracts. It later one is a cash- settled contract only and does not involve physical delivery of the underlying crude palm oil. Hedgers use crude palm oil futures contract to manage risk against the unfavourable movement of crude oil price in the physical market while speculators use crude palm oil futures to gain from the price movement of the contract on the exchange. For each crude palm oil futures, the contract size is equivalent to 25 metric tons. The futures contract months are specified as the spot month and the next 5 succeeding months followed by alternate months up to 24 months ahead.
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Multistage methanolysis of crude palm oil for biodiesel production in a pilot plant

Multistage methanolysis of crude palm oil for biodiesel production in a pilot plant

Diesel fuel must satisfy a wide range of engine types, differing operating con- ditions and duty cycles, as well as variations in fuel system technology, engine temperatures and fuel system pressures. It must also be applicable for a vari- ety of climates. The properties of each grade of diesel fuel must furthermore be balanced to provide satisfactory performance over an extremely wide range of circumstances. In some respects, the substantial quality standards represent certain compromises so that all the performance requirements can be satisfied. By controlling specifications and properties, it is possible to satisfy the require- ments of compression ignition engines with a single grade of diesel fuel. The most commonly used guidelines for diesel fuel quality are established by ASTM International in the United States and EN (European Committee for Standard- ization, CEN) in the European Union. The difference of these two standards are subtle. EN standards are selected for this research purpose because they spec- ify the minimum methyl ester content of biodiesel in the test method. Selected parameters of biodiesel specifications following EN 14214 are listed in Table 2.6 .
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LCA studies for alkaline and enzyme catalyzed biodiesel production from palm oil

LCA studies for alkaline and enzyme catalyzed biodiesel production from palm oil

an alkali catalyst as outlined above, relevant changes are made to accommodate an enzyme catalyst. Enzymes and oil are mixed in the reactor after which alcohol is added for transesterification reaction. The enzyme loading is maintained at 4 wt% (biomass and support). Methanol is fed such that the concentration is kept low as the concen- tration higher than half the stoichiometric amount will denature the catalyst. Then, the product mixture is sent to a decanter to separate the non-polar and polar phases. The polar glycerol as the bottom product has a very high purity, since it is not mixed with water. The non-polar phase is distilled due to the lower yield of the enzymatic process compared to the alkali catalyzed processes. In this process, no excess methanol is recycled. In addition, since no alkali is present in the system, there is no need for neutralization process.
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Production of biodiesel from waste cooking oil and RBD palm oil using batch transesterification process

Production of biodiesel from waste cooking oil and RBD palm oil using batch transesterification process

Vegetable oils are widely available from various sources, and the glycerides present in the oils can be considered as a viable alternative for diesel fuel. Biodiesel, which is synthesized from bio-oil, is a realistic alternative of diesel fuel because it provides a fuel from renewable resources and has lower emissions than petroleum diesel. It is biodegradable and contributes a minimal amount of net greenhouse gases or sulfur to the atmosphere. More specifically, biodiesel cuts down on the amount of carbon dioxide, hydrocarbons, and particulate matter released into the environment (Dalai et.
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Effect of Carbon Nanotube Dispersions to the Palm Oil Diesel-Biodiesel Blend Properties

Effect of Carbon Nanotube Dispersions to the Palm Oil Diesel-Biodiesel Blend Properties

The current trend in world’s energy demands and supplies has created a critical dent on the availability of global crude oil. As the source-demand gap is getting wider, our dependence to fossil fuel is now at marginal clearance as almost the entire transportation systems are heavily relying on it to produce power. Widely use of fossil based fuels has also promoted bad effects to the environment and caused deterioration in world climatic quality through the production of undesirable pollutions. Transportation systems are the world’s biggest consumer of fossil fuel and if the diesel fuel can be totally replaced with any renewable sources such as biodiesel fuels and, in the meantime, required no significant modifications to the current compression ignition (CI) engines, world dependency to the crude oil source may be reduced.
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