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Drastic movements of global commodity prices and their impact on the Thai palm oil market is a major concern due to Thailand being the third largest producer of crude palm oil (CPO). Although the country is not a net importer, global price changes of the commodity can transmit to domestic markets for palm oil products. This paper analyzed the transmission of Malaysian CPO and world crude oil price changes to the changes in the Thai CPO price using an asymmetric error correction model. The price data used in this paper covers the period from January 1996 to September 2015. The findings showed that the speed of adjustments towards long-run equilibrium were asymmetric and the effects of the world prices on Thai CPO price were significant in both positive and negative deviations. This result calls for policy measures to mitigate the impact of global price movements because CPO is an essential intermediate input in various products and any changes in the Thai CPO price definitely affects the welfare of domestic consumers.

Reliazing the pass-through effects of global commodity prices on domestic prices, this study develops a vector error correction model (VECM) to test for the determinants and direction of causality between global prices and crude palm oil (CPO) price in Thailand. Malaysian crude palm oil, world soybean oil and world crude oil prices were investigated as factors affecting the Thai CPO price. Using the Johansen cointegration test, the result unveils a presence of long-run relationship among the determinants. This long-run relationship, proposes that CPO price flows in Thailand are positively influenced by the Malaysian CPO price and the error correction term suggests that approximately 35 percent of total disequilibrium in Thai CPO price was corrected in the following month. Moreover, the findings show Granger causality from each of the Malaysian CPO price and the world soybean oil price for the Thai CPO price. Information flow regarding the price movements of the Malaysian CPO and soybean oil affect the Thai CPO price and vice-versa. Whereas, the evidence for a causal relationship that runs from the world crude oil price to the Thai CPO price is found, but not in reverse.

The issue of sustainability of tropical commodity chains is a major issue in Southeast Asia. The recurrent public debate around the impacts of oil palm cultivation, in particular, crystallizes opinions and has direct consequences on the relationship between importing and producing countries with many direct and indirect consequences, both on the diplomatic and economic areas. The Sustainable Development Goals (SDGs), otherwise known as the Global Goals, are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. In order to realize SDG ambitions in the field of sustainable commodity chains, CIRAD and its regional partners are setting up a partnership platform for the construction of scientific projects and training curricula in South-East Asia, a region of the world where problems related to the sustainability of major agricultural sectors are particularly prominent (deforestation, rural poverty reduction, family farming, etc.). SALSA (Sustainable Agricultural Landscapes in Southeast Asia) aims at regionally federating and mobilizing scientific and training skills on the sustainability of perennial crops sectors. SALSA will promote, within a framework of collective action, the concrete integration of disciplines and multi-stakeholder teams into research, training and development projects that will be conducted on the ground through shared experimental networks and academic and training curricula tailored to the needs for present and future skills.