Published Online:July 2024
Product Name:The IUP Journal of Applied Economics
Product Type:Article
Product Code:
Author Name:Shivam Swarup and Gyaneshwar Singh Kushwaha
Availability:YES
Subject/Domain:Economics
Download Format:PDF
Pages:16
Crude palm oil (CPO) is one of the most consumed edible oils in the country, compared to other major agro-commodity oils. This study seeks to investigate the daily price movements of CPO in India based on the degree of movements of external macroeconomic factors such as Brent crude oil price and dollar-based daily exchange rates. The co-relationship between the above variables is studied using multivariate generalized autoregressive conditional heteroskedasticity (GARCH), constant conditional correlation (CCC) and dynamic conditional correlation (DCC) GARCH approach. The results indicate no spillover effects and hence no dependency of CPO price on currency exchange rate. However, there exists some direct impact of global crude oil prices on Indian CPO price fluctuations. Also, the degree of covariance is quite significant among the currencies of Malaysia, Indonesia, and India. This study would help industry stakeholders and practitioners hedge against imminent market risks arising from unanticipated changes in India’s palm oil prices.
Palm oil, one of the most significant vegetable oils, can yield about 3.3 tons per hectare, exceeding other oil seeds, according to the Food and Agriculture Organization (FAO). Due to its high productivity, palm oil is consumed in most regions, especially in the developing countries of Asia and Africa