Do World Crude Oil Prices, Global Uncertainty and Exchange Rates Influence Palm Oil Prices? Evidence from The Nonlinear ARDL Approach

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Lain-Tze Tee
Si-Roei Kew
Hawati Janor
Ruzita Abdul Rahim


This study contributes to the current literature by analysing the asymmetric effects of world crude oil prices, global uncertainty and exchange rates on palm oil prices in Malaysia. It employs the nonlinear Autoregressive Distributed Lags (NARDL) model to examine the nonlinear relationship between the variables. Further, the findings show that world crude oil prices and global uncertainty have a strong asymmetric effect on the palm oil prices in both short and long-run. More specifically, palm oil prices are more sensitive to the increase in world crude oil prices and global uncertainty than a decrease in world crude oil prices and global uncertainty. However, we do not find evidence of a nonlinear relationship between palm oil prices and exchange rate in short-run and long-run. The findings offer meaningful insights into the dynamics of palm oil prices and provide important implications for policymakers and market participants



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