Factors Affected the Decline of Indonesian Coffee Competitiveness in Export Market During 2009-2018

Darmawan, Arief; Surachman, Adhie; Hurriyati, Ratih; Hendrayati, Heny

doi:10.2991/aebmr.k.210831.034

Cited by 2 publications

(3 citation statements)

References 16 publications

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“…Domestic producers will prefer to sell their products to buyers from other countries, whereas if the international price is lower than the domestic price, then a country will tend to become an importer. This international price will then directly or indirectly affect the export value of Indonesian cinnamon, which will then affect export competitiveness in the international market (Malau et al 2022;Hadi et al 2019;Darmawan et al 2021).…”

Section: Methodsmentioning

confidence: 99%

Competitiveness Analysis and Factors Affecting Indonesian Cinnamon Exports

Rochdiani

Wulandari

2023

Economies

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Cinnamon is one of the plantation spice commodities that contributes to the Indonesian economy. Indonesia is the largest exporter country in the world regarding the total export volume of cinnamon, but regarding the total value of exports, Indonesia comes in second after Sri Lanka. This study aims to analyze the comparative competitiveness of Indonesian cinnamon among major competitors in the United States’ market and to analyze the factors that influence the competitiveness of Indonesian cinnamon exports in the United States. The data used in this study comprise secondary data from 2007 to 2021 obtained from various data sources. The revealed comparative advantage method was used in a comparative competitiveness analysis. Moreover, the factors that affect the competitiveness of Indonesian cinnamon exports in the United States were analyzed using the ordinary least squares method. The results of the analysis show that Indonesian cinnamon is competitive in the United States’ market, but Sri Lanka’s cinnamon exports have stronger competitiveness than Indonesia’s in the United States’ market. The results of the ordinary least squares method show that the exchange rate of the IDR (rupiah) against the USD, the volume of Indonesian cinnamon exports, the GDP per capita of the USA and the value of cinnamon exports to the USA have a significant effect on the competitiveness of Indonesian cinnamon exports to the United States.

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Section: Methodsmentioning

confidence: 99%

Competitiveness Analysis and Factors Affecting Indonesian Cinnamon Exports

Rochdiani

Wulandari

2023

Economies

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“…Smallholder farmers produce more than 95% of Indonesian coffee with an average area of 0.6 ha [8,9,10,11,12,13] which is a source of income for nearly two million households [14,13]. Assuming each household consists of at least four individuals, coffee generates income for at least eight million people.…”

Section: Introductionmentioning

confidence: 99%

“…World Coffee Research [13] believes that the Indonesian government pays less attention to coffee as a commodity due to more significant palm oil and rubber exports to the economy, while public investment in research and development of food crops takes center stage. As a result, Indonesia is known as a producer of lower-quality Robusta Coffee [14], and Indonesia's export market share declined by almost 40% between 2009 and 2018 [9].…”

Section: Introductionmentioning

confidence: 99%

Indonesian Coffee Development Path: Production and International Trade

Tampubolon,

Ginting,

Nainggolan

et al. 2023

AJAEES

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Aims: The objectives of this study are (i) to compare Indonesia's coffee production efficiency among the top five world coffee-producing countries, (ii) to analyze Indonesia's coffee competitiveness against major world coffee producers in the international market, and (iii) to analyze Indonesia's coffee export structure based on unit price of export price to determine profitable differentiation of export destinations. Methodology: A descriptive comparative analysis was conducted on coffee productivity (kg/ha) in the major coffee-producing countries and on the export unit price (USD/ton) received by Indonesia and other exporting countries. To reveal the comparative advantage of Indonesian coffee in the global market, Symmetry Revealed Comparative Advantage (RSCA) is employed, and GL-Index is utilized as an analysis tool for export destination differentiation. Results: The results of this study are (i) Indonesian coffee production is very low due to various factors, including production techniques that do not apply innovation to increase production, (ii) the composition of production is dominated by Robusta Coffee which is known to get a lower price than Arabica Coffee, (iii) exports are in the form of low-quality products so that they attain a meager unit price even though Indonesian coffee has competitiveness with SRCA> 0, and (iv) GL-Index analysis shows that the most profitable export destinations for Indonesian coffee are to the United States and Australia and New Zealand, while contrary to what has been assumed, exports to West Europe, Northeast Asia and Middle East and North Africa do not show conclusive results while ASEAN (Association of Southeast Asian Nations) is not a profitable export destination. Conclusion: Indonesian coffee needs to be improved at various supply chain stages, especially at the production and export levels. Appropriate policies to address the weaknesses of Indonesia's coffee position have the potential to catch up with the existing productivity and export gaps.

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Factors Affected the Decline of Indonesian Coffee Competitiveness in Export Market During 2009-2018

Cited by 2 publications

References 16 publications

Competitiveness Analysis and Factors Affecting Indonesian Cinnamon Exports

Competitiveness Analysis and Factors Affecting Indonesian Cinnamon Exports

Indonesian Coffee Development Path: Production and International Trade

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