Comparative Advantage and Trade Flow of Indonesian Cocoa in International Market
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Date
2014Author
Suryana, Anggita Tresliyana
Fariyanti, Anna
Rifin, Amzul
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Indonesia is the third largest cocoa beans producer in the world after Ivory Coast and Ghana, since total production of cocoa beans in Indonesia around 11.81 percent of the total world production. Cocoa export is driven from the demand side, showed by the growth of world consumption around 3 percent per year. Although the quantity of cocoa exports showed an increase, however, started in 2011 there is a change in the composition of Indonesian cocoa exports, exports of processed cocoa increased, while cocoa beans decreased. This happens due to the impact of taxation cocoa exports that began in 2010. With the increasing trend of Indonesian cocoa exports and an increase in world cocoa consumption, indicating the potential cocoa market is still high in the international market. The volume of cocoa export in the international market is determined by its competitiveness and other factors. Thus, the purposes of this study are: (1) to analyze the competitiveness and the level of competition of Indonesian cocoa beans and processed cocoa in the international market and (2) to analyze the factors that affect the flow Indonesian cocoa beans and processed cocoa trade and the potential trade in the international market. Secondary data were used in the form of panel data, combination between the time series and cross section data. The analysis methods used in this study are: (1) descriptive analysis, (2) Revealed Comparative Advantage (RCA), (3) Spearman rank correlation analysis, (4) analysis of panel data with gravity models, and (5) ratio of trade potential. The results of this study indicate that the Indonesian cocoa trade in the international market has the highest comparative advantage for cocoa beans (average value RCA 12.53) and the lowest for the cocoa butter (average value RCA 7.35), even though the value of the RCA of all cocoa products shows Indonesia has comparative advantage. Based on the competitiveness analysis, Indonesia has a positive correlation with Ghana in cocoa beans market, but has no correlation with other exporting countries in the markets of cocoa butter and cocoa powder. The variables that significantly influence the volume of Indonesian cocoa exports are real GDP per capita of the destination country, exchange rate, and the cocoa beans export tax. All of these variables have coefficient sign that consistent with the hypothesis. In the cocoa butter model, all variables significantly affect Indonesia's export. All of these variables have coefficient sign that consistent with the hypothesis. Meanwhile, in the cocoa powder model, the variables that significantly influence the volume of exports is Indonesia's per capita real GDP, real GDP per capita of the destination country, and the economic distance between Indonesia and destination countries. The countries that still under trade in cocoa beans model and potentially increased in the future are USA, China, and Brazil. While in cocoa butter trade are China, the Netherlands, and Japan, and in cocoa powder trade are Estonia, Russia, and the United States. This is indicated by the ratio of trade potential is greater than one, which means Indonesia's trade with trading partners has not exceeded the existing trade potential. The increasing potential of Indonesian cocoa trade in the future trends indicated by the positive slope of trade potential. From the three analyzes that have been done it can be concluded that Indonesia could increase its market share by prioritizing to export cocoa beans to China, the United States, and Brazil. In the meantime, for cocoa butter Indonesia should be increasing market share in China, Australia, and UAE. As for cocoa powder, market share still can be improved in Estonia, Russia and Australia. To that end Indonesia should create a relationship of reciprocal economic cooperation through international organizations or agreements.
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- MT - Economic and Management [2962]