Aufsatz
Palm oil supply and demand characteristics and behavior: A system dynamics approach
Abstract
Like other commodities, palm oil is characterized by common commodity cycles in the market. However, in this study, we argue that the palm oil market has distinctive traits compared to other commodity markets with regard to the cobweb theorem by elaborating on the characteristics of the Malaysian palm oil market and its basic underlying behavior. In an attempt to understand the behavior of the industry, researchers had been changing the paradigm of modelling the palm oil market by using the operationally-based modelling approach (like system dynamics - SD-) rather than the observationally-based modelling approach (like econometrics). Thus, we propose a basic SD model of the palm oil market based on the Malaysian palm oil industry and tested its capability to replicate the real situation in the palm oil market. Five placeholder variables are included in the model to represent the exogenous factors influencing the key variables. Findings from the simulation-based run show that the palm oil market produces a fluctuating pattern of its key variables ceteris paribus, as suggested in cobweb theorem. For future works, further disaggregation of the key variables and exogenous factors is possible, thus adding model complexity in order to achieve specific objectives. This study contributes by setting up the fundamental structure of the market model for palm oil and other similar commodities.
Citation
In: Future of Food: Journal on Food, Agriculture and Society. Witzenhausen : University of Kassel, Specialized Partnerships in Sustainable Food Systems and Food Sovereignty. - Vol. 6, No. 1 (2018), S. 8-19Collections
Vol 06, No 1 (2018) (Future of Food: Journal on Food, Agriculture & Society // The Future of Food Journal: Journal on Food, Agriculture & Society)Citation
@article{urn:nbn:de:hebis:34-2017112353856,
author={Zabid, M. Faeid M. and Abidin, Norhaslinda Zainal and Applanaidu, Shri Dewi},
title={Palm oil supply and demand characteristics and behavior: A system dynamics approach},
year={2018}
}
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2018-10-16T11:49:42Z 2018-10-16T11:49:42Z 2018-10-09 2197-411X urn:nbn:de:hebis:34-2017112353856 http://hdl.handle.net/123456789/2017112353856 eng Section Specialized Partnerships in Sustainable Food Systems and Food Sovereignty at the University of Kassel, Germany and Federation of German Scientists (VDW) Urheberrechtlich geschützt https://rightsstatements.org/page/InC/1.0/ Palm oil market System dynamics Cobweb theorem 630 Palm oil supply and demand characteristics and behavior: A system dynamics approach Aufsatz Like other commodities, palm oil is characterized by common commodity cycles in the market. However, in this study, we argue that the palm oil market has distinctive traits compared to other commodity markets with regard to the cobweb theorem by elaborating on the characteristics of the Malaysian palm oil market and its basic underlying behavior. In an attempt to understand the behavior of the industry, researchers had been changing the paradigm of modelling the palm oil market by using the operationally-based modelling approach (like system dynamics - SD-) rather than the observationally-based modelling approach (like econometrics). Thus, we propose a basic SD model of the palm oil market based on the Malaysian palm oil industry and tested its capability to replicate the real situation in the palm oil market. Five placeholder variables are included in the model to represent the exogenous factors influencing the key variables. Findings from the simulation-based run show that the palm oil market produces a fluctuating pattern of its key variables ceteris paribus, as suggested in cobweb theorem. For future works, further disaggregation of the key variables and exogenous factors is possible, thus adding model complexity in order to achieve specific objectives. This study contributes by setting up the fundamental structure of the market model for palm oil and other similar commodities. open access In: Future of Food: Journal on Food, Agriculture and Society. Witzenhausen : University of Kassel, Specialized Partnerships in Sustainable Food Systems and Food Sovereignty. - Vol. 6, No. 1 (2018), S. 8-19 Zabid, M. Faeid M. Abidin, Norhaslinda Zainal Applanaidu, Shri Dewi
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