IJSSH 2013 Vol.3(4): 369-374 ISSN: 2010-3646
DOI: 10.7763/IJSSH.2013.V3.264

Sugar Price Analysis in Indonesia

Kumara Jati
Abstract—This study examines the dynamic relationship between sugar price, exchange rate, oil price, rice price, and consumer price index (CPI); and to detect is there any difference between exchange rate, oil price, rice price, and CPI in effecting sugar price. We employ Vector Auto-regressions methods for a time series of monthly data from January 1998 to December 2011. Generally, the Impulse Response Function results provide the positive response of Indonesian sugar price from shock of the change of world sugar price, oil price, rice price and CPI; but there is negative response of Indonesian sugar price from shock of the change of exchange rate. The empirical results in variance decomposition test provide evidence that variability of the change of Indonesian sugar price are vary between each variable. Overall variance decomposition results are below than ten percent. These results indicate there is low transmission of international prices into Indonesian sugar prices.

Index Terms—Indonesia, impulse response function, sugar price, variance decomposition, vector auto-regressions.

Kumara Jati is with Faculty of Business, Economics and Policy Studies majoring development economics in University Brunei Darussalam.

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Cite:Kumara Jati, "Sugar Price Analysis in Indonesia," International Journal of Social Science and Humanity vol. 3, no. 4, pp. 369-374, 2013.

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