Export performance and marketing strategy for Malaysian palm oil
This study evaluates the performance of the export marketing strategy for Malaysian palm oil over the period 1980-90, with emphasis on the promotion of this commodity in a large number of importing countries world-wide. The analysis of global data indicates that over this period the average per capita consumption level of oils and fats grew from 13.4 to 15.1 kg/hd, led by soybean oil and followed by palm, rape seed, and coconut oils, tallow and butter. However, the per capita consumption trend of soybean and coconut oils is declining, while there is a positive trend for rapeseed and palm oils, tallow and butter. Regression analysis using 1990 cross-sectional data based on 92 importing countries indicates that there is a significant positive and inelastic income response in per capita consumption of oils and fats, but that the income elasticity of consumption for animal fats is higher than that for vegetable oils. The relationship between per capita consumption of oils and fats types with price was found to be negative. The only significant relationship between per capita consumption of oil types and price is with palm oil. Between 1982 and 1990, vegetable oils accounted for 78 per cent of world trade in oils and fats, led by palm, soybean, rapeseed and sunflower oils. Malaysian palm oil accounted for 21 per cent of the total oils and fats trade in 1982-90. Based on market share analysis, the export gains for Malaysian palm oil came mainly from the general expansion of demand for oils and fats, particularly in developing countries, and to the lesser extent from the market reorientation and competitiveness effects. The contribution of promotional efforts was evaluated using import demand and promotion model for Malaysian palm oil. Promotional efforts were measured by estimated costs of overseas trips and familiarisation programmes, and a binary variable for ministerial visits.