EUROPE UNION BAN ON PALM OIL: THE TREND OF PALM OIL COMPETITIVENESS AND THE COINTEGRATION ON THE SOYBEAN AND RAPESEED OIL

Abstract

Palm oil highly demanded in global trade and expected to gain more demand in the future market. The primary concern regarding palm oil production is its environmental impact. The issue that is focused on in this study the European Union to promote the banning of oil palm in the world market in 2018 and the European parliament decided to ban palm oil for biofuel used. The Europe Union also promoted soybean and rapeseed as replacement for the banned of palm oil in Europe market. Therefore, this study aims for the effect toward the competitiveness using the Revealed Comparative Advantage (RCA) and Revealed Symmetrical Comparative Advantage (RSCA) indices among the major crude palm oil exporters especially within 1991 to 2020 period of years. Moreover, this study also clarified the Autoregressive Distributed Lag (ARDL) cointegration for the soybean and rapeseed oil toward the competitiveness for 2 largest palm oil exporters in the world from 1989 to 2021.