Food inflation: A study on key determinants and price transmission processes for Malaysia

In Malaysia, food price inflation reached its highest level at 8.8% in mid-2008 compared to overall inflation of 5.5% for the same period, mainly blamed on the spike in world commodity prices. However, recent moves by the government to rationalize food and energy subsidies have also led to higher...

Full description

Bibliographic Details
Main Authors:	Norazman, Umi Zakiah, Khalid, Haniza, Mat Ghani, Gairuzazmi
Format:	Article
Language:	English English English
Published:	Universiti Malaysia Sarawak 2018
Subjects:	HB Economic Theory HB221 Price HB522 Income. Factor shares.Interest.Profit.Entrepreneurship
Online Access:	http://irep.iium.edu.my/63001/ http://irep.iium.edu.my/63001/ http://irep.iium.edu.my/63001/1/IJBSVol19-no1-paper9.pdf http://irep.iium.edu.my/63001/7/63001_Food%20inflation%20A%20study%20on%20key%20determinants%20and%20price%20transmission%20processes%20for%20Malaysia_scopus.pdf http://irep.iium.edu.my/63001/13/63001_Food%20inflation_WoS.pdf

id	iium-63001
recordtype	eprints
spelling	iium-630012018-10-18T02:16:22Z http://irep.iium.edu.my/63001/ Food inflation: A study on key determinants and price transmission processes for Malaysia Norazman, Umi Zakiah Khalid, Haniza Mat Ghani, Gairuzazmi HB Economic Theory HB221 Price HB522 Income. Factor shares.Interest.Profit.Entrepreneurship In Malaysia, food price inflation reached its highest level at 8.8% in mid-2008 compared to overall inflation of 5.5% for the same period, mainly blamed on the spike in world commodity prices. However, recent moves by the government to rationalize food and energy subsidies have also led to higher than normal headline inflation figures and cause public concern. This study investigates the supply-side determinants of food price through a price transmission perspective. Horizontal price transmission channel relates to how trade, transportation cost, exchange rates and distances between geographical areas affect producer prices. On the other hand, vertical price transmission relates to how price changes throughout the domestic supply chain to reflect food processing and distribution costs. A vector error correction model (VECM) using monthly data from 1991 to 2013 confirms that world food commodity prices and real effective exchange rate are the primary determinants of food prices in Malaysia; whereas changes in the vertical transmission channel may have been muted by government price controls and subsidy programs or the industry’s organization. Given that world commodity price is likely to be more uncertain in the near future, understanding the dynamics of these shocks and price transmission processes will be important for future policy enhancements. Universiti Malaysia Sarawak 2018-01 Article PeerReviewed application/pdf en http://irep.iium.edu.my/63001/1/IJBSVol19-no1-paper9.pdf application/pdf en http://irep.iium.edu.my/63001/7/63001_Food%20inflation%20A%20study%20on%20key%20determinants%20and%20price%20transmission%20processes%20for%20Malaysia_scopus.pdf application/pdf en http://irep.iium.edu.my/63001/13/63001_Food%20inflation_WoS.pdf Norazman, Umi Zakiah and Khalid, Haniza and Mat Ghani, Gairuzazmi (2018) Food inflation: A study on key determinants and price transmission processes for Malaysia. International Journal of Business and Society, 19 (1). pp. 117-138. ISSN 1511-6670 http://www.ijbs.unimas.my/images/repository/pdf/Vol19-no1-paper9.pdf
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English English English
topic	HB Economic Theory HB221 Price HB522 Income. Factor shares.Interest.Profit.Entrepreneurship
spellingShingle	HB Economic Theory HB221 Price HB522 Income. Factor shares.Interest.Profit.Entrepreneurship Norazman, Umi Zakiah Khalid, Haniza Mat Ghani, Gairuzazmi Food inflation: A study on key determinants and price transmission processes for Malaysia
description	In Malaysia, food price inflation reached its highest level at 8.8% in mid-2008 compared to overall inflation of 5.5% for the same period, mainly blamed on the spike in world commodity prices. However, recent moves by the government to rationalize food and energy subsidies have also led to higher than normal headline inflation figures and cause public concern. This study investigates the supply-side determinants of food price through a price transmission perspective. Horizontal price transmission channel relates to how trade, transportation cost, exchange rates and distances between geographical areas affect producer prices. On the other hand, vertical price transmission relates to how price changes throughout the domestic supply chain to reflect food processing and distribution costs. A vector error correction model (VECM) using monthly data from 1991 to 2013 confirms that world food commodity prices and real effective exchange rate are the primary determinants of food prices in Malaysia; whereas changes in the vertical transmission channel may have been muted by government price controls and subsidy programs or the industry’s organization. Given that world commodity price is likely to be more uncertain in the near future, understanding the dynamics of these shocks and price transmission processes will be important for future policy enhancements.
format	Article
author	Norazman, Umi Zakiah Khalid, Haniza Mat Ghani, Gairuzazmi
author_facet	Norazman, Umi Zakiah Khalid, Haniza Mat Ghani, Gairuzazmi
author_sort	Norazman, Umi Zakiah
title	Food inflation: A study on key determinants and price transmission processes for Malaysia
title_short	Food inflation: A study on key determinants and price transmission processes for Malaysia
title_full	Food inflation: A study on key determinants and price transmission processes for Malaysia
title_fullStr	Food inflation: A study on key determinants and price transmission processes for Malaysia
title_full_unstemmed	Food inflation: A study on key determinants and price transmission processes for Malaysia
title_sort	food inflation: a study on key determinants and price transmission processes for malaysia
publisher	Universiti Malaysia Sarawak
publishDate	2018
url	http://irep.iium.edu.my/63001/ http://irep.iium.edu.my/63001/ http://irep.iium.edu.my/63001/1/IJBSVol19-no1-paper9.pdf http://irep.iium.edu.my/63001/7/63001_Food%20inflation%20A%20study%20on%20key%20determinants%20and%20price%20transmission%20processes%20for%20Malaysia_scopus.pdf http://irep.iium.edu.my/63001/13/63001_Food%20inflation_WoS.pdf
first_indexed	2023-09-18T21:29:18Z
last_indexed	2023-09-18T21:29:18Z
_version_	1777412403072335872

Food inflation: A study on key determinants and price transmission processes for Malaysia

Similar Items