Position Analysis of Indonesia’s White Pepper in the World Market

Abstract

The declining of Indonesia’s white pepper production and export are followed by pressures in its main market, that is world white pepper market. The pressures come from Vietnam’s white pepper and black pepper. Thus, as the impact of these pressures, it is important to be seen about position or competitiveness of Indonesia’s white pepper in the world market at nowadays, which is also useful as suggestions/informations in determining the appropriate strategy-policy in order to maintain the existing market share of Indonesia’s white pepper, and be expected to expand the Indonesia’s white pepper market share in the world market. The objectives of this research are: (1) to determine the factors that affecting world white pepper trade volume, (2) to determine the position/competitiveness of Indonesia’s white pepper in world white pepper market; (3) to determine the alternative of strategy-policy that proper to Indonesia’s white pepper marketing in world white pepper import market; by analyzing world white pepper trade volume and world white pepper demand sourced from Indonesia and Vietnam. World white pepper trade volume is analyzed by using logarithmic multiple linear regression model. Meanwhile, world white pepper demand sourced from Indonesia and Vietnam is analyzed by using adopted model of Almost Ideal Demand System Model (AIDS). The result shows that Indonesia’s white pepper has competitiveness or advantages in world white pepper import market, which is better than Vietnam’s white pepper, so that Indonesia has a better opportunity to increase her white pepper market share. Indonesia’s white pepper also has a better prospects, as seen from the potency of world white pepper market itself. World white pepper market still has potency to be entered, even though there is a pressure from black pepper which can be processed into white pepper. The strategy that need to be implemented by Indonesia is to increase her white pepper export supply, because of the world white pepper import demand sourced from Indonesia has elastic own price elasticity. The increasing of Indonesia’s white pepper export supply will also make Indonesia’s white pepper price more competitive, which can be used to overcome the pressure of black pepper and suppress the market share of Vietnam’s white pepper. The efforts or policies that need to be implemented by Indonesia to support the established strategy, including: (1) to increase the productivity of cultivated pepper plant; (2) to prevent the pepper cultivation land from conversion and expand the pepper cultivation area, which both of them must be followed by increasing of cultivated pepper plant productivity; and (3) to maintain the quality of Indonesia’s white pepper.