Relationship between Bioethanol Production and Agricultural Commodity Prices: for the case of Thailand

Nathan, Thurai Murugan and Senadjki, Abdelhak and Chee, Keong Choong and Nor Asmat, Ismail (2015) Relationship between Bioethanol Production and Agricultural Commodity Prices: for the case of Thailand. In: Conference Proceedings of Social Sciences Postgraduate International Seminar (SSPIS). School of Social Sciences, Pulau Pinang, Malaysia, pp. 377-388. ISBN 978-967-11473-2-0

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Abstract

This paper examines the relationship between bio-ethanol production and agricultural commodity prices in Thailand. The main feedstocks for producing bioethanol in Thailand are sugarcane, cane molasses and cassava. Monthly data has been used from January 2006 to March 2014 to conduct this research. The existence of long-run relationships among the four variables i.e. bioethanol production, sugarcane farm gate price, cane molasses export price and cassava farm gate price detected through the Auto Regressive Distributive Lag (ARDL) framework. Then, the Granger Causality Test (Wald Test) used to investigate the short-run causal relationship among those variables. From the result found that when bioethanol production act as independent variable, long-run equilibrium exist between bioethanol production and sugarcane farm gate price, cane molasses export price and cassava farm gate price, respectively. Besides that, Granger causality exists among the variables as well. Sugarcane farm gate price and bioethanol production as well as cassava farm gate price and bioethanol production are found to be having unidirectional Granger causality effect. Meanwhile, bidirectional Granger causality effect is found between cane molasses export price and bioethanol production. The results of this study would contribute towards significant policy making in Thailand.

Item Type: Book Section
Subjects: H Social Sciences
Divisions: Pusat Pengajian Sains Kemasyarakatan (School of Social Sciences) > Social Sciences Postgraduate International Seminar (SSPIS)
Koleksi Penganjuran Persidangan (Conference Collection) > Social Sciences Postgraduate International Seminar (SSPIS)
Depositing User: ASM Ab Shukor Mustapa
Date Deposited: 23 Nov 2017 07:26
Last Modified: 23 Nov 2017 07:26
URI: http://eprints.usm.my/id/eprint/37618

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