Abstract
Natural rubber (NR) has recently become one of Malaysia's most important economic sectors. Despite, the price of Standard Malaysia Rubber 20 changes frequently. That is why it is important to develop a NR price forecasting model. Because there was a significant time lag between making output decisions and the actual output of the commodity in the market. The aim of this study is to determine the time series pattern for natural rubber price in Malaysia within 1995 until 2020 and to forecast the natural rubber price in Malaysia for 10 years ahead. The data used is from year 1995 until 2020 that were obtained from Malaysian Rubber Board (MRB). This study also used univariate forecasting like Naïve with Trend, Double Exponential Smoothing, Holt’s Winter and Autoregressive Integrated Moving Average (ARIMA). Then, the measurement error is used to determine the best method to forecast the future data. The measurement error that used in this study are Mean Absolute Error, Mean Squared Error, Root Mean Square Error, Mean Absolute Percentage Error and The Theil Inequality Coefficient. Result: The natural rubber price in Malaysia showed a trend pattern. Then, ARIMA is used to determine the forecast of natural rubber price for next 10 years since it has the lowest measurement error. Conclusion: There are volatility in the price of natural rubber in Malaysia over the next 10 years.
Highlights
Arias and Dijk (2019) stated that natural rubber is an important polymer in human society, where this study found that over 40,000 products have been produced for community use
Khin et al (2008) used Box-Jenkins’s methods to match the historical prices of Standard Malaysian Rubber 20 in a time series model from January 1990 to December 2006 and it was concluded that the data fits a 9 Autoregressive Integrated Moving Average Method (ARIMA) (1,1,1) model, and the results showed that forecasting values are satisfactory
After the analyze of the data, the forecasting measurement error was determined for each method
Summary
Arias and Dijk (2019) stated that natural rubber is an important polymer in human society, where this study found that over 40,000 products have been produced for community use. Natural rubber is produced from latex, known as Havea Brasillensis. According to Khin et al (2008), Malaysia is the world's leading producer of rubber. The rubber industry is one of the backbones and has become one of the key sectors of Malaysia's economy. The rubber industry is one of the components of the agricultural sector that contributes to Malaysia's national prosperity and gross domestic product (GDP). It reveals that they are having a negative relationship with each other. Most of the agricultural commodities including natural rubber are traded internationally in terms of USD. Most of the agricultural commodities including natural rubber are traded internationally in terms of USD. (Burger et al (2002) found any fluctuation in the currency exchange rate would have an impact on the market
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