Price Forecasting Edible Oil: Case Study Sunflower Oil

Document Type : Scientific-research

Authors

1 Assistant Professor of Economics , Institute for Trade Studies and Research, Tehran, Iran

2 Associate Professor of Economics , Institute for Trade Studies and Research, Tehran, Iran.

3 Assistant Professor of Economics, Institute for Trade Studies and Research, Tehran, Iran

10.30465/ce.2024.48871.1968

Abstract

The present study aims to identify the influencing variables and investigate their effect on the price of sunflower oil in Iran and out-of-sample forecast (2023:10-2024:09) using the vector autoregression method. First, due to the cointegration of the research variables, we used the Johansen-Juselius cointegration test to confirm the long-term relationship between the variables. Then, the long-term and short-term models were estimated, and the error correction coefficient was obtained at -0.3147. Next, we investigated impulse response functions. According to the results of impulse response functions, shocks in the price of the substitute product, the government exchange rate, and the global oil price index (with 16, 10, and 9.6 percent in standard form, respectively) have been more effective than other variables on the fluctuations of the sunflower oil price. Also, the variance decomposition showed the global oil price index variable explains the changes in the dependent variable more than other variables. Finally, we estimated out-of-sample forecasts. Based on the forecast evaluation criteria, the model can accurately forecast the price trend of sunflower oil. Also, according to our findings recommended removing obstacles to production, formulating and implementing incentive packages for producers, and reviewing the regulations for importing goods into the country to control the price of sunflower oil.
 JEL Classification: E37, D12, C32.
 

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Main Subjects

References

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History

  • Receive Date: 30 April 2024
  • Revise Date: 07 July 2024
  • Accept Date: 19 July 2024

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