Forecasting Natural Rubber Price in Malaysia by 2030

  • Nor Farah Hanim Binti Mohamad Norizan School of Quantitative Sciences, Universiti Utara Malaysia (UUM)
  • Zahayu Binti Md Yusof School of Quantitative Sciences, Universiti Utara Malaysia (UUM)
Keywords: natural rubber price, forecasting, measurement forecasting error

Abstract

Natural rubber (NR) has recently become one of Malaysia's most important economic sectors. Despite, the price of Standard Malaysia Rubber 20 changes frequently. That is why it is important to develop a NR price forecasting model. Because there was a significant time lag between making output decisions and the actual output of the commodity in the market. The aim of this study is to determine the time series pattern for natural rubber price in Malaysia within 1995 until 2020 and to forecast the natural rubber price in Malaysia for 10 years ahead. The data used is from year 1995 until 2020 that were obtained from Malaysian Rubber Board (MRB). This study also used univariate forecasting like Naïve with Trend, Double Exponential Smoothing, Holt’s Winter and Autoregressive Integrated Moving Average (ARIMA). Then, the measurement error is used to determine the best method to forecast the future data. The measurement error that used in this study are Mean Absolute Error, Mean Squared Error, Root Mean Square Error, Mean Absolute Percentage Error and The Theil Inequality Coefficient. Result: The natural rubber price in Malaysia showed a trend pattern. Then, ARIMA is used to determine the forecast of natural rubber price for next 10 years since it has the lowest measurement error. Conclusion: There are volatility in the price of natural rubber in Malaysia over the next 10 years.

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Published
2021-09-10
How to Cite
Mohamad Norizan, N. F. H. and Md Yusof, Z. (2021) “Forecasting Natural Rubber Price in Malaysia by 2030”, Malaysian Journal of Social Sciences and Humanities (MJSSH), 6(9), pp. 382 - 390. doi: https://doi.org/10.47405/mjssh.v6i9.986.
Section
Articles