| dc.description.abstract | Production of palm oil downstream products in Indonesia is still low compared to primary products, namely palm oil. demand for palm oil, margarine and soap increased every year. therefore, Indonesia needs to increase the production of palm oil derivative products, not only to meet consumer demand but also related to value-added. Relevant government policies in order to encourage the development of downstream palm oil industry, through the instrument of monetary policy interest rates can affect the production of palm oil derivative products are cooking oil, margarine and soap. The research objectives are (1) Analyzing the factors that influence the production of palm oil derivative products in Indonesia, cooking oil, margarine and soap. (2) Analyzing the impact of policy rate cuts on the production of cooking oil, margarine and soap in Indonesia. In order to address these objectives, a simultaneous equations model of derived from the production of palm oil in Indonesia is estimated by Two Stage Least Squares (2SLS) method. Domestic palm oil production is influenced significantly by the domestic price of cooking oil palm, palm oil price growth rate domestk, interest rate, and cooking oil production t-1. Domestic production of margarine significantly influenced by the production of margarine t-1. Production of domestic soap significantly influenced by the level of interest rates, the growth rate of industrial labor, and the production of soap domestuk t-1. in order to develop the production of palm oil derivatives suggested that the government should export oriented derivative products (cooking oil, margarine and soap) to increase foreign exchange and provision of low interest rates in order to increase investment in downstream industries. | en |
