We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Long-Term Prediction of Oil Palm Fresh Fruit Bunch Prices in Riau Province Post-Pandemic Using a Discrete-Time Markov Chain.
- Authors
Sri Purwani; Fasa, Rayyan Al Muddatstsir; Tsanawafa, Almeira; Sutisna, Sarah
- Abstract
The COVID-19 pandemic has had a significant impact on many economic sectors around the world. This includes the palm oil industry, which has been especially affected in Riau Province. One of the aspects affected in this sector is the price of oil palm fresh fruit bunches (FFB), with its uncertain price due to the COVID-19 pandemic being detrimental to many parties. Therefore, decision-makers need an understanding of how to predict the price of oil palm FFB. In this study, we use a discrete-time Markov chain approach to predict the long-term prices of oil palm FFB post-pandemic in Riau Province. This approach allowed us to model the price transition from both one period and one price category to the next based on predefined transition probabilities. Historical data on oil palm FFB prices in Riau Province from January 6-12, 2021 to January 4-10, 2023 were used to build the Markov chain model. In our analysis, we considered four possible states of Riau Province's oil palm FFB prices post-pandemic: rising, extreme rising, falling, and extreme falling. Our long-term prediction results show that Riau Province's oil palm FFB prices have an opportunity for a rise of 39%, an extreme rise of 25%, a fall of 27%, and an extreme fall of 9%. This is valuable information for industry players when making decisions regarding their investment, production, and marketing strategies. By understanding the likely future price trends, they can take appropriate steps to optimize yields and mitigate risks.
- Subjects
RIAU (Indonesia : Province); PRICES; OIL palm; MARKOV processes; DECISION making in investments; PALM oil industry
- Publication
IAENG International Journal of Applied Mathematics, 2024, Vol 54, Issue 6, p1225
- ISSN
1992-9978
- Publication type
Article