IS CRUDE PALM OIL STILL A GOOD INDUSTRY?: MODELLING MARKET REACTION OF CRUDE PALM OIL PRICE
Asaduddin Abdullah, Dikky Indrawan
School of Business IPB University, Jl. Raya Pajajaran, Babakan, Bogor Tengah, 16128, Indonesia
Abstract
A current change in green economy and sustainability perspective and policy has impacted the crude palm oil price in global trade. The CPO Price and volume of trade have been decreased, trapped and fluctuating in short price range. Thus, Indonesia CPO producers become unfavorable by foreign investment. The paper objective is to investigate the correlation between the daily closing price of CPO and CPO futures with the Stock Prices of Oil Palm Producers that listed in Jakarta Composite Index. We modelled market reaction based On Balance Volume and Bill Williams Market Facilitation Index. The model used the daily closing price of three major CPO producers stock of CPO and CPO futures (CPO F) for the period ranging from 2008 to 2018. Three simulation scenarios were performed to indicates simulated CPO price that give the best investment for CPO Producers Stocks. This study gave information for the policy maker to protect the Indonesian CPO industry.
Keywords:
Topic: Trade policies strategic Responses