Abstract— Lately, fluctuation in world crude oil prices and increasing in biofuel demand have encourages the uses of biodiesel in worldwide. Malaysia is one of the countries that using renewable materials from crude palm oil. As the main feedstock for biodiesel, the implementation of biodiesel blend mandate in Malaysia is expected to interrupt the natural rubber industry due to the competition of land between oil palm and natural rubber. Previously, there was no any relationship between renewable energy particularly biodiesel to be linked with the natural rubber market. The implementation of B5 mandate in Malaysia will added a new dimension in the Malaysian natural rubber market. Therefore, the objective of this study is to develop the conceptual framework in examining the effect of biodiesel blend mandate on Malaysian natural rubber market. Malaysia natural rubber and palm oil market model been developed where consist of production, import, domestic consumption, export, domestic price and world price equations. The model was closed using domestic and world stock identity.
Keywords— Conceptual framework, Renewable Fuel Mandate, Malaysian natural rubber market, Palm oil market.
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