PRICE TRANSMISSION OF SKIM MILK POWDER IN INDONESIA: DO SKIM MILK POWDER IMPORT PRICES FOLLOW THE PRICES IN NEW ZEALAND?

Authors

  • Venty Fitriany Nurunisa Magister Sains Agribisnis, Fakultas Ekonomi dan Manajemen, Institut Pertanian Bogor
  • Bonar Marulitua Sinaga Program Studi Ekonomi Pertanian, Fakultas Ekonomi dan Manajemen, Institut Pertanian Bogor
  • Ratna Winandi Magister Sains Agribisnis, Fakultas Ekonomi dan Manajemen, Institut Pertanian Bogor
  • Bernhard Brummer Department of Agricultural Economics and Rural Development, Georg August University of Goettingen, Germany

DOI:

https://doi.org/10.29244/fagb.4.2.171-192

Abstract

The objectives of this research are i) to examine New Zealand's dairy sector and ii) to analyze the market integration and price transmission of Skim Milk Powder (SMP) of New Zealand and Indonesian market. The methods used are Augmented Dickey Fuller test, Johansen Cointegration test, and Vector Error Correction Model. The result indicates: 1) as trade partner, New Zealand is powerful due to its status as the largest dairy producer worldwide; therefore, Indonesia has less bargaining power and 2) The SMP market of both countries are integrated. The coefficient of long run equation variable indicates that every 10 percent changes of one market, the imported SMP price will adjust 10.97 percent, while the exported SMP price will adjust 9.12 percent. The loading vector coefficient indicates that Indonesia is the only party adjusting to long run disequilibrium. Policies to minimize the risks includes: i) buffer budget, ii) alternative suppliers and iii) futures trade.

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Published

2014-09-01

Issue

Vol. 4 No. 2 (2014): FA Vol 4 No 2 September 2014

Section

Articles

License

The author submitting the manuscript must understand and agree that the copyright of the article manuscript must be submitted/transferred to the Journal Forum Agribisnis. This work is licensed under the Creative Commons Attribution-ShareAlike 4.0 (CC BY-SA) International License in which the Author and Reader can copy and redistribute the material in any media or format, and remix, modify and build material for any purpose, but they must provide appropriate credit (citing articles or content), provide a link to the license, and indicate whether there is a change. If you mix, change, or create material, you must distribute your contribution under the same license as the original.

How to Cite

PRICE TRANSMISSION OF SKIM MILK POWDER IN INDONESIA: DO SKIM MILK POWDER IMPORT PRICES FOLLOW THE PRICES IN NEW ZEALAND?. (2014). Forum Agribisnis, 4(2), 171-192. https://doi.org/10.29244/fagb.4.2.171-192

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