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.
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.
Abstract:The beef cattle industry recorded progressive growth in the last two decades. Despite this growth, suppliers are having difficulty to meet the domestic demand for beef. Continued strong growth of beef cattle production capacity depends on supplier profitability, which in turn will be influenced by primarily on availability of feedstuffs that constitutes a large proportion of the cost of production. The policy design and management of beef cattle production systems in Malaysia is challenging since imported beef is much more profitable. To this end, the research has applied systems approach that can be used to study and understand the behavior of a complex system over time which is characterized by interdependence, mutual interaction, information feedback and circular causality. The results indicate that low beef price and feed cost ratio would worsen beef cattle production. However, development of grazing and fodder area and genetic improvement boost the beef cattle production significantly by 2020. The results of this research support the idea that the best policies to obtain the targeted self-sufficiency level is through importation of animal for breeding, minimized rate of beef cattle mortality, increased fertility and the conduct of training in feed efficiency management.
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