Abstract
This research is aimed at investigating the impact of price and non-price on the demand for palm oil, supply and stock of palm oil in a foreign market. The data employed in this research were time series data. The analysis used the model of demand, supply and stock of palm oil. Full simultaneity in a dynamic model with inventories was adopted from Nerlove (1956). This research has shown that the supply of palm oil in the foreign market had a positive influence on the price, the area and the supply in previous years while the response of the demand was negative. On the other hand, the income and the demand in the previous years had a positive influence. The palm oil stock was influenced by the quantity in the previous years and international price.
Highlights
The main goal of long-term development is the realization of a strong foundation for the nation to grow and thrive on its own power to a just and prosperous society
Research methods This study aims to investigate the main issues which are: (a) Response of palm oil supply represented by palm oil production, towards changes in palm oil prices, land area and supply in the previous year; (b) Response of palm oil demand as represented by changes in palm oil prices, palm oil revenue and price in the previous year; (c) Response of palm oil stocks to price changes, palm oil stocks in the previous year
Variables of palm oil price have a negative correlation with palm oil demand with a coefficient value of -2.2979, meaning that if the price of palm oil rises by 10% the demand for palm oil will decrease by 2.2079%
Summary
The main goal of long-term development is the realization of a strong foundation for the nation to grow and thrive on its own power to a just and prosperous society. It emphasizes on development with the main goal of achieving a balance between agriculture and industry as well as fulfillment of community needs. Plantation is one of the agricultural sub-sectors that play a role in employment, development of production of new remote areas, supporting sector economic activities through the provision of raw materials, giving contribution which means to increase the country's foreign exchange, provision of foodstuffs and being able to improve the welfare of farmers. One of the commodities of the plantation sector contributes to the increase of Indonesian non-oil and gas export
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