EU Export Ban on CPO: Implications for the Stock Value of Indonesian Palm Oil Companies

Abstract

European Union (EU) issued a Renewable Economic Directive (RED), namely a policy to ban the export of Indonesian Crude Palm Oil (CPO). Various efforts were made by Indonesia to solve the problem. This research aims to determine the effect of European Union's export ban of Indonesian Crude Palm Oil (CPO) on share prices of palm oil companies listed on Indonesia Share Exchange. This examines the share price differences when European Union prohibits the export of Indonesian Crude Palm Oil (CPO) in 2020 and 2021. The share price used is the daily closing price. This research was conducted using quantitative methods with a time span of one year in 2020 and one year in 2021 when the European Union banned the Export of Indonesian Crude Palm Oil (CPO). The purposive sampling method obtained 10 companies. This research uses a parametric test, namely Paired Sample t-Test to answer the hypotheses. Data processing uses SPSS Version 26. The results showed significant differences in share prices in 2020 and 2021. This is indicated by a significance value of 0.000 < 0.05. It can be interpreted a difference in share prices in 2020 and 2021 when the European Union export ban of Indonesian Crude Palm Oil (CPO).

Keywords: Crude Palm Oil (CPO), Renewable Economic Directive (RED), Share Price

DOI: 10.7176/EJBM/16-10-08

Publication date: December 30th 2024