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Impact of climate change and economic factors on Malaysian food price

This paper is motivated by the increasing food price over the recent years (2010 – 2017) in Malaysia. Food is a necessity for mankind and everyone has equal rights to enjoy adequate food protecting from hunger and malnutrition. In general, we understand that food and agriculture production are highl...

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Main Authors: Wong, Kelly Kai Seng, Chin, Lee, Wong, Wang Li
Format: Article
Language:English
Published: International Society for Southeast Asian Agricultural Sciences 2019
Online Access:http://psasir.upm.edu.my/id/eprint/80152/1/Impact%20of%20climate%20change%20and%20economic%20factors%20on%20Malaysian%20food%20price.pdf
http://psasir.upm.edu.my/id/eprint/80152/
https://www.researchgate.net/publication/335222732_IMPACT_OF_CLIMATE_CHANGE_AND_ECONOMIC_FACTORS_ON_MALAYSIAN_FOOD_PRICE
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spelling my.upm.eprints.801522020-09-30T08:15:33Z http://psasir.upm.edu.my/id/eprint/80152/ Impact of climate change and economic factors on Malaysian food price Wong, Kelly Kai Seng Chin, Lee Wong, Wang Li This paper is motivated by the increasing food price over the recent years (2010 – 2017) in Malaysia. Food is a necessity for mankind and everyone has equal rights to enjoy adequate food protecting from hunger and malnutrition. In general, we understand that food and agriculture production are highly related. Crop production is affected biophysically by climatic variables, i.e. suitable rainfall and temperature for photosynthesis process to take place. If these climatic variables alter extremely in a long-term period, crop production will be affected and crop damage can occur due to the climate change effect such as extreme flood and drought. Hence, if climate change effect is defined as a linear relationship, it will result in a misleading explanation whereby as long as rainfall and temperature increase (or decrease) it will cause the crop production to decrease (or increase). Given the problem associated with food price, this paper investigated the food price determinants by looking at both economic factors and climate change. Non-linear time series analysis namely Engle-Granger (EG) cointegration test and Error Correction Mechanism (ECM) were performed by including the determinants such as Carbon Dioxide (CO2), crude oil price, exchange rate and real gross domestic product (RGDP). The results showed that both economic Real Gross Domestic Product and climate factors jointly affect food price significantly and climate factor (CO2) exhibits a strong non-linear U-shaped impact on food price in the long run. In addition, the Error Correction Term (ECT) showed that food market will have a slower self-recovery mechanism to adjust and return the temporary food market demand-supply shock to the equilibrium. International Society for Southeast Asian Agricultural Sciences 2019 Article NonPeerReviewed text en http://psasir.upm.edu.my/id/eprint/80152/1/Impact%20of%20climate%20change%20and%20economic%20factors%20on%20Malaysian%20food%20price.pdf Wong, Kelly Kai Seng and Chin, Lee and Wong, Wang Li (2019) Impact of climate change and economic factors on Malaysian food price. Journal of the International Society for Southeast Asian Agricultural Sciences, 25 (1). pp. 32-42. ISSN 0859-3132 https://www.researchgate.net/publication/335222732_IMPACT_OF_CLIMATE_CHANGE_AND_ECONOMIC_FACTORS_ON_MALAYSIAN_FOOD_PRICE
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description This paper is motivated by the increasing food price over the recent years (2010 – 2017) in Malaysia. Food is a necessity for mankind and everyone has equal rights to enjoy adequate food protecting from hunger and malnutrition. In general, we understand that food and agriculture production are highly related. Crop production is affected biophysically by climatic variables, i.e. suitable rainfall and temperature for photosynthesis process to take place. If these climatic variables alter extremely in a long-term period, crop production will be affected and crop damage can occur due to the climate change effect such as extreme flood and drought. Hence, if climate change effect is defined as a linear relationship, it will result in a misleading explanation whereby as long as rainfall and temperature increase (or decrease) it will cause the crop production to decrease (or increase). Given the problem associated with food price, this paper investigated the food price determinants by looking at both economic factors and climate change. Non-linear time series analysis namely Engle-Granger (EG) cointegration test and Error Correction Mechanism (ECM) were performed by including the determinants such as Carbon Dioxide (CO2), crude oil price, exchange rate and real gross domestic product (RGDP). The results showed that both economic Real Gross Domestic Product and climate factors jointly affect food price significantly and climate factor (CO2) exhibits a strong non-linear U-shaped impact on food price in the long run. In addition, the Error Correction Term (ECT) showed that food market will have a slower self-recovery mechanism to adjust and return the temporary food market demand-supply shock to the equilibrium.
format Article
author Wong, Kelly Kai Seng
Chin, Lee
Wong, Wang Li
spellingShingle Wong, Kelly Kai Seng
Chin, Lee
Wong, Wang Li
Impact of climate change and economic factors on Malaysian food price
author_facet Wong, Kelly Kai Seng
Chin, Lee
Wong, Wang Li
author_sort Wong, Kelly Kai Seng
title Impact of climate change and economic factors on Malaysian food price
title_short Impact of climate change and economic factors on Malaysian food price
title_full Impact of climate change and economic factors on Malaysian food price
title_fullStr Impact of climate change and economic factors on Malaysian food price
title_full_unstemmed Impact of climate change and economic factors on Malaysian food price
title_sort impact of climate change and economic factors on malaysian food price
publisher International Society for Southeast Asian Agricultural Sciences
publishDate 2019
url http://psasir.upm.edu.my/id/eprint/80152/1/Impact%20of%20climate%20change%20and%20economic%20factors%20on%20Malaysian%20food%20price.pdf
http://psasir.upm.edu.my/id/eprint/80152/
https://www.researchgate.net/publication/335222732_IMPACT_OF_CLIMATE_CHANGE_AND_ECONOMIC_FACTORS_ON_MALAYSIAN_FOOD_PRICE
_version_ 1680322365502783488
score 13.211869

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