This paper investigates the major determinants of the Malaysian palm oil price using a system dynamics approach. System dynamics methodology is very relevant for examining the feedback relationships, non-linearity and delays exist in palm oil market. It helps understand the palm oil market structure and the resultant behavior and performance particularly On crude Palm Oil (CPO) price. The simulation results indicate that the Malaysian CPO price is significantly affected by the local CPO production as well as the world CPO and soybean oil prices. It is also found that CPO price is less sensitive to biodiesel production, as biodiesel currently accounts for small portion of total CPO demand in Malaysia.
Productivity is posited as the key to shape a more sustainable oil palm industry. This study, through a systemic perspective, explores the main drivers of productivity growth and its impacts on its associated factors using a system dynamics model. Of all four simulations, research and development (R&D) intervention is demonstrated to enhance oil palm production albeit at the cost of seemingly unstoppable land loss. This, in turn, leads to lower carbon emissions. Automation and mechanization are found effective in reducing farm operating cost. These findings suggest that R&D is key, and related policy options are discussed for steering the sustainability and growth of oil palm production in Malaysia.
Malaysian pepper industry is facing supply constraints which may affect its future. The system dynamics model provides a framework for understanding the dynamics and feedback structure of the Malaysian pepper supply and demand systems. The choice was made based on the ability of this model in capturing complexity and feedback relationship. The pepper model integrates key elements such as area, production, inventory, price, profitability and demand. The research question is: What are the likely future trends of pepper supply and demand under the different price conditions? The situation requires one to seek a methodology that could explain the complexity of the system and to establish an insight on the interrelation of the key variables. Simulation results indicate that the pepper area is expected to increase rapidly over the next decades, however production is expected to grow slowly because of the low productivity and price volatility.
In recent decades, the Malaysian rubber sector has developed from a supplier of raw materials to a rubber-based manufacturing industry producing export products such as gloves and tyres. In contrast, the upstream rubber sector has experienced a declining trend in both plantation area and production capacity. In 2015, almost 95% of rubber producers were smallholders who depended on plantations as their main source of income. Despite government efforts to boost growth in the industry, the area and productivity have continued to decline. This study attempts to examine the structural factors that led to a decline in rubber area and natural rubber production and proposes strategies to enhance productivity and returns for smallholders. A system dynamics approach was used to capture the feedback relationships between variables in the rubber production system as well as the temporal lags and non-linearities. The findings suggest that gradual research and development funding for development of high-yielding clones holds major promise for yield improvement and increased income for smallholders.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.