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…(Scopus)Is Policy Greasing the Wheels of Global Palm Oil Trade?
Shweta Adhikari
Department of Agricultural and Applied Economics, University of Georgia, Athens, GA, 30602, USA
Dikshit Poudel
Department of Agricultural and Applied Economics, University of Georgia, Athens, GA, 30602, USA
Munisamy Gopinath
Department of Agricultural and Applied Economics, University of Georgia, Athens, GA, 30602, USA
DOI: https://doi.org/10.36956/rwae.v4i2.859
Received: 17 May 2023; Published: 19 June 2023
Copyright © 2023 Shweta Adhikari, Dikshit Poudel, Munisamy Gopinath. Published by Nan Yang Academy of Sciences Pte. Ltd..
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Abstract
Oil palm is the major source of edible oil and feedstock consumed in the world. This study examined the determinants of global palm oil trade with attention to the effects of trade policies using a gravity model, PPML estimator, and the data from 1988-2020. Palm oil's dramatic trade growth in recent years can be attributed to the economic growth of large countries, the proximity of partners and policies. Trade agreements increased crude and refined palm oil trade by up to 8 and 4 percent of the global import value, respectively. Further, the effects of policy changes due to COVID-19 and the recent export ban in Indonesia are also quantified.
Keywords: Palm oil, Gravity model, Trade policy, COVID-19, Indonesia's export ban