Determinants of Natural Rubber Price Instability for Four Major Producing Countries

Fong Yi Chiun, . and Khin Aye Aye, . and Lim Chee Seong, . Determinants of Natural Rubber Price Instability for Four Major Producing Countries. pp. 1179-1197. ISSN 0128-7702

Recently price instability of natural rubber (NR) in the world market has affected the NR economy severely. It is believed that NR price can no longer be explained solely by the fundamental factors supply-demand but it is largely driven by external factors. Therefore this study aimed to explore the determinants of NR prices in 4 major NR producing countries namely Thailand Indonesia Malaysia and Vietnam. Annual data from 2008 to 2017 was collected and panel data analysis was performed. Results of Hausman Test suggested that Fixed Effect Model (FEM) was preferable than Random Effect Model (REM) in the study. Results indicated that NR production consumption Shanghai NR price crude oil price and synthetic rubber (SR) price were statistically significant. This study could contribute to government policy implementation in NR producing countries to ensure the stability of NR production and price which will benefit the smallholders and countries economic growth.

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Abstract

Recently price instability of natural rubber (NR) in the world market has affected the NR economy severely. It is believed that NR price can no longer be explained solely by the fundamental factors supply-demand but it is largely driven by external factors. Therefore this study aimed to explore the determinants of NR prices in 4 major NR producing countries namely Thailand Indonesia Malaysia and Vietnam. Annual data from 2008 to 2017 was collected and panel data analysis was performed. Results of Hausman Test suggested that Fixed Effect Model (FEM) was preferable than Random Effect Model (REM) in the study. Results indicated that NR production consumption Shanghai NR price crude oil price and synthetic rubber (SR) price were statistically significant. This study could contribute to government policy implementation in NR producing countries to ensure the stability of NR production and price which will benefit the smallholders and countries economic growth.

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Item Type:	Article
AGROVOC Term:	Natural rubber
AGROVOC Term:	Agricultural prices
AGROVOC Term:	World markets
AGROVOC Term:	Supply and demand
AGROVOC Term:	Data analysis
AGROVOC Term:	Consumption
AGROVOC Term:	Plant production
AGROVOC Term:	Crude oil
AGROVOC Term:	Synthetic rubber
AGROVOC Term:	Market prices
Depositing User:	Mr. AFANDI ABDUL MALEK
Last Modified:	24 Apr 2025 00:54
URI:	http://webagris.upm.edu.my/id/eprint/9012

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