The impact of macroeconomic variables on the crude palm oil export: Malaysian evidence based on ARDL approach

With the expectation of the substitution of crude brent oil for crude palm oil, Malaysia as one of the largest suppliers of crude palm oil should be up in the arms to take advantage of exporting the maximum volume of the crude palm oil to meet the demand of the commodities. Thus this paper is studying the impact of macroeconomic variables on the volume of the crude palm oil export to assess if inflation rate and interest rate do increase or decrease the export volume of the crude palm oil. Our results based on the generalized variance decomposition tend to indicate that, both macroeconomic variables being relatively endogenous do not have a direct impact on the export volume, but the exchange rate being the most exogenous variable has a significant impact. Nevertheless, we can say that, the inflation rate and interest rate do have an indirect impact on the export volume of the crude palm oil