Vertical Integration Market Analysis of Palm Oil Fresh Fruit Bunches in West Sumatera, Indonesia

  • Abstract
  • Keywords
  • References
  • PDF
  • Abstract

    This study aims to examine whether there is asymmetric information on the vertical integration market in palm oil Fresh Fruit Bunches (FFB) in West Sumatera using Error Correction Model (ECM) and analyze the factors causing price inefficiency of oil palm in West Sumatera. The result obtained the change in price of FFB of palm oil of sales realization at agent level, sales realization of export  price of crude palm oil (CPO), and sales realization of export  price of kernel have positive effect on sales realization at smallholder price of FFB  level and  Error Correction Term (ECT) value is negative and significant at 5%  of real level, which states that in the short and long run, the free variables used significantly influence the sales realization at smallholder price of  FFB of palm oil  level. Exporter of CPO  is one actor involved in it who has dominant power in influencing the selling price of FFB so that they can manage the selling price of FFB farmers as a producer of palm oil, this is the cause of inefficiencies in the vertical integration market



  • Keywords

    ECM, Crude Palm Oil, Fresh Fruit Bunches.

  • References

      [1] Irawan, B. (2007). Price Fluctuations, Price Transmission, and Margin of Vegetables and Fruit Marketing. Journal of Agricultural Policy Analysis, volume 5, issue 4, December 2007: 358-373 

      [2] Kustiari,R., & Nuryati, S. (2008). Dynamics of Agricultural and Rural Development: Challenges and Opportunities for Increasing Farmers' Welfare. Centre for Agricultural Socio Economic and Policy Studies, Department of Agriculture. Bogor

      [3] Arianto, E. (2010). Analysis of Palm Oil Price, Review of Cointegration of Vegetable Oil and Petroleum Price. Journal of Bogor Institute of Agricultural. Volume 7, issue 1.

      [4] Mohammadi, S., Arshad, F M., Bala, B. K.,& Ibragimova (2015). System Dynamic Analysis of the Determinants of the Malaysian Palm Oil Price. American Journal of Applied Sciences 12(5): 355-362.

      [5] Murphy, D. J. (2014). The Future of Oil Palm As A Major Global Crop: Opportunities and Callenges. Journal of Oil Palm Research Vol. 26 (1) March 2014 p. 1- 24

      [6] Rahmi, E., & Arif, B (2012). Analysis of Corn Price Transmission as Chicken Feed Ingredients in West Sumatera. Indonesian Journal of Animal Science.

      [7] Abidin, Z. (2008). Analysis of Indonesian Crude Palm Oil (CPO) Exports. Journal of Management Application, volume 6, issue 1. Faculty of Economics, University of Brawijaya.

      [8] Engle, Robert F. and C.W.J. Granger, (1987). Cointegration and error correction: Representation, estimation and testing, Econometrica 55, 251-276.

      [9] Meyers, R.A. (2011). Complex Systems in Finance and Econometrics. 1st Edn., New York, Springer, ISBN- 10: 1441977007.

      [10] Asmarantaka. (2009). Lecture Module of Trading System of Agro-Industry Product. Department of Agro-Industry, Faculty of Economics and Management, Bogor Institute of Agriculture. Bogor.

      [11] Tan, Firwan. (2005). Price Efficiency at Vertical Integrated Market Study on Market of Natural Rubber Industry Products of Indonesia. Journal of Management and Development, Volume 4, issue 1.

      [12] Kusnadi, N., Tinaprilla, N., Susilowati, S. H & Purwoto. (2011). Analysis of the Efficiency of Rice Farming in Several Rice Production

      [13] Karantininis, K., Katrakylidis, K & Persson, M. (2011). Price Transmission in The Swedish Pork Chain: Asymmetric Non-Linear. Paper Presented at The Eaae 2011 Congress. 2011

      [14] Gujarati, D. (2003). Basic Econometrics, translation of Sumarno Zain. Erlangga, Jakarta.

      [15] Tukan, C. J. (2001). Marketing of Wood from Farmer’s Land in Lampung Province. Master of Development Studies, Bandung Institute of Technology.

      [16] West Sumatera Plantation Office. 2015

      [17] West Sumatera Province in Figure. 2017. Central Bereau Statistics of West Sumatera Province 




Article ID: 21090
DOI: 10.14419/ijet.v7i4.9.21090

Copyright © 2012-2015 Science Publishing Corporation Inc. All rights reserved.