The Determinant of Sarawak Black Pepper Price

Alvin, Wong and Farhana, Ismail and Nur Zaimah, Ubaidillah (2022) The Determinant of Sarawak Black Pepper Price. In: 10th International Borneo Business Conference 2022 (iBBC) 2022), 19-21 September 2022, Raia Hotel & Convention Centre Kuching, Sarawak.

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Abstract

This study’s objective is to analyse the Sarawak black pepper price determinants. This study used secondary data which was from 1985 to 2019. The dependent variable used for the analysis is black pepper price. In contrast, the independent variables are pepper production, white pepper price, inflation rate, and official exchange rate (LCU per $US). To achieve the objective of this study, several tests, such as the unit root test, including the Augmented DickyFuller (ADF) test and Phillips-Perron (PP) test, Johansen and Juselius Cointegration test, Vector Error Correction Model (VECM), and VECM Granger causality are employed. The result shows that white pepper prices have a negative relationship with black pepper prices. Meanwhile, the production of pepper, inflation rates, and official exchange rates have a positive relationship with black pepper prices. However, the inflation rate and the official exchange rate are not significant in determining the black pepper price. Only white pepper price will granger cause black pepper price in the short run.

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