Oktaviana, P., Darsono, U. (2023). Analysis of Indonesian palm oil export supply to Egypt: error correction model approach. Egyptian Journal of Agricultural Research, 101(2), 274-281. doi: 10.21608/ejar.2023.178107.1311
Prima Oktaviana; Umi Barokah Darsono. "Analysis of Indonesian palm oil export supply to Egypt: error correction model approach". Egyptian Journal of Agricultural Research, 101, 2, 2023, 274-281. doi: 10.21608/ejar.2023.178107.1311
Oktaviana, P., Darsono, U. (2023). 'Analysis of Indonesian palm oil export supply to Egypt: error correction model approach', Egyptian Journal of Agricultural Research, 101(2), pp. 274-281. doi: 10.21608/ejar.2023.178107.1311
Oktaviana, P., Darsono, U. Analysis of Indonesian palm oil export supply to Egypt: error correction model approach. Egyptian Journal of Agricultural Research, 2023; 101(2): 274-281. doi: 10.21608/ejar.2023.178107.1311
Analysis of Indonesian palm oil export supply to Egypt: error correction model approach
Department of Magister Agribusiness, Faculty of Agriculture, Universitas Sebelas Maret, Indonesia
Abstract
Palm oil is Indonesia's main export plantation commodity and has many economic contributions. The prospect of palm oil in the world vegetable oil trade is up-and-coming, prompting the Indonesian government to spur export palm oil development. Indonesian palm oil exports to Egypt are expected to fulfill the strong demand for various food and non-food applications of palm oil for Egyptian domestic market needs. This article describes the most crucial determinant influencing the Indonesian palm oil export supply to Egypt. The current study overcomes the problem of spurious regression and non-stationary time series data through cointegration. The research involves testing the existence of a long-term equilibrium relationship between the variables and estimating an Error Correction Model (ECM). The results showed that there was a long-term equilibrium relationship between the variables. The findings show that the Indonesian palm oil export supply to Egypt is significantly influenced by international prices, domestic production volume, interest rates, and the Rupiah exchange rate against the Egyptian Pound. The policy recommendation to maintain the exchange rate at a reasonable level needs to be carried out to increase Indonesian palm oil exports to Egypt. On the other hand, a low-interest rate can be an alternative to promoting policies to increase exports.
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