The growing importance of crude palm oil (CPO) in India’s overall edible oil imports encourages research on this commodity. India is one of the world’s largest crude palm oil-consuming countries and an important destination market for Southeast Asian countries. This study identifies the critical determinants of crude palm oil imports into India and their impact on the import demand.
We employed an autoregressive distributed lag (ARDL) model to analyse time series data from 1990 to 2021.
The findings reveal that the import price of crude palm oil, applied import duty and GDP have negative significant impact while exchange rate and openness have positive significant impact on crude palm oil imports in the long run. However, lagged import price, lagged applied import duty and openness have positive significant impact on CPO in the short run.
The traders, firms and industries dealing with crude palm oil may consider these factors for making their agribusiness strategies, while the policymakers at the government may leverage this for formulating the agri-trade policies that maximise the country’s overall economic interests. Overall, this study provides some interesting policy implications and managerial lessons.
Our study is a fresh attempt to model the determinants of crude palm oil import demand in India based on time series data. Indeed, our analysis helped us to identify the major factors that influence the crude palm oil import in India from international market.
