INDONESIAN COCONUT COMPETITIVENESS IN

INTERNATIONAL MARKETS

By:
Heriyanto
Detri Karya
Asrol
Presented at the 4th International Asian Conference (AIC 2018)
in Langkawi

Universitas Islam Riau

Pekanbaru, Indonesia
08th Desember 2018
Introduction
One of Indonesia's leading
agricultural sector
commodities is Coconut
Fluctuations in production
and land area occurred from
2000-2014
Coconut demand trend is
increasing every year,
triggering producer
countries to always try to
increase pr
Along with the implementation of
the Asean Economic Community
(AEC) policy, in 2015
•Employment provider Coconut Indonesia is listed
as the second largest
• Produce foreign exchange
producer in the world after
• Industrial raw materials
the Philippines
• Land conversion
• Pests and diseases
• Most of the coconut cultivation is still cultivated in
community plantations (98.90%)
Threats that are serious enough for
the development of coconut
commodities in Indonesia are
foreign competitors such as the
Philippines and Sri Lanka on the
international market
Require one of Indonesia's export
plantation commodities, namely coconut to
be able to survive and improve
competitiveness and comparative
advantage
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Even though the price is low, these
commodity producers continue to develop the
cultivation area. The largest number of
coconut plants in Indonesia is in Riau.
Furthermore, the trade of coconut in the
Indonesian market tends to be
monopsoni, the market tends to be
dominated by buyer.

The last three months in 2018 Indragiri Hilir

coconut farmers screamed the price per grain
dropped from Rp. 1,200 to Rp. 400 (Tribun
Pekanbaru 4 Desember 2018)

Based on the above description of

the background, the general aim of
this study is to analyze the
competitiveness of Indonesian
palm oil exports in the
international market while the
specific objectives are: to analyze
the position and competitiveness
Figure. The development of the country's Coconut Exports to Brazil, India,
Malaysia, Indonesia, Philippines, Singapore, Srilanka, Bangladesh,
of Indonesian oil in the
Tahun 2005-2016 (US$ 000) international market
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Literature Review
 International trade is trade between or across countries, which includes
the exchange of products between countries in export and import
activities, both commodities (goods) and services, thus, the scope of
international economics is broader than international trade (Rifai dan
Tarumun, 2005; Salvatore,1997).

 This law states that a country still gains an advantage if it exports

commodities that have a smaller absolute loss even though the country is
less efficient in producing a commodity (absolute loss). So that from
these commodities the State has a comparative
advantage(Salvatore,1997)
 Competitiveness is the ability of a commodity to provide continuous
benefits and the ability to improve market share. Therefore the
measurement of competitiveness can be done by approaching profit and
market share (Tambunan, 2004; Salvatore,1997).

 Analysis to measure the level of competitiveness can be done using

several approaches or methods, namely Index Revealed Comparative
Advantage (RCA), Trade Specialization Index (TSI), Constant Market
Share (CMS
 Next . . .
Literature Review
 Research related to the analysis of the competitiveness of a plantation
commodity using Constant Market Share (CMS) analysis and Revealed
Comparative Advantage (RCA) has been carried out. Some of these
studies have been carried out by Fitriana (2014), Hagi (2012), Anggit (2012),
Kania (2012), Hasibuan (2011), Rajagukguk (2009), Mudjayani (2008), Marlinda
(2008), Meryana (2007), Ika Permatasari et all (2015), Satryana et al (2016),
Syahputra, et all (2014), Ogi Suparsa et all (2016), Trianto (2015), Zuhdi et all
(2015), Sari et all (2017), Adi Putra, et all (2015), Prasetio et all (2015), Da Huo
(2014), dan Kusuma, et all (2015)
Methodology
time series
data for 12
Central Bureau of Statistics
years
(BPS), International Trade
Center traced through the 2005-2016
internet network, International
Pepper Community (IPC),
Directorate General of
Plantation, FAO, Industrial
Data and Information Center of Data on production and
the Indonesian Ministry of export value and imports
Industry International Trade of Indonesian coconut,
Statistics (ITS), United Nations data on the area of
Indonesian coconut
Trade Statistic (UN Comtrade)
plantations and data on
and other related sources of
production and export
publication value of coconut plants of
competing coun

Data Analysis:

 Trade Specialization Index (TSI)

 Revealed Comparative Advantage (RCA)
 Analysis of Constant Market Share (CMSA)
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Results
Trade Specialization Index (TSI)

TSI values are positive and close to +1 are Indonesia, Philippines and Malaysia, the average
values are 1.00, 0.97 and 0.18 respectively. This shows that Indonesia, the Philippines and
Malaysia have a strong competitiveness or a tendency to have a position as a coconut
exporting country belonging to a very mature category in the world coconut trade
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Revealed Comparative Advantage (RCA)

Three countries that have competitiveness with an average value of RCA 2005-2016:
Philippines 8.33, Indonesia at 7.08, Malaysia 1.86
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Analysis of Constant Market Share (CMSA)
INDONESIA INDIA SRILANKA SINGAPORE
TAHUN
PS EK DP ER PS EK DP ER PS EK DP ER PS EK DP ER

2005 0.1967 0.0025 0.0130 -0.0132 0.3221 0.0000 0.0013 -0.0013 0.1268 -0.0002 -0.0002 0.0002 0.1562 0.0000 0.0000 0.0000

2006 0.1767 -0.0037 0.0209 -0.0196 0.2077 0.0000 -0.0001 0.0001 0.0974 0.0000 0.0941 -0.0942 0.1836 0.0000 0.0000 0.0000

2007 0.1320 0.0004 -0.0004 -0.0006 0.2038 0.0000 0.0001 -0.0001 0.1333 -0.0001 -0.0002 0.0002 0.1011 0.0000 0.0001 -0.0001

2008 0.2009 -0.0043 0.0089 -0.0080 0.2465 0.0000 0.0000 0.0000 0.0673 0.0000 -0.0001 0.0001 0.1299 0.0000 0.0001 -0.0001

2009 -0.1497 0.0041 0.0051 -0.0039 -0.0280 0.0000 -0.0002 0.0002 -0.1291 0.0001 -0.0001 0.0000 -0.2021 0.0000 0.0005 -0.0005

2010 0.3542 -0.0081 0.0017 0.0000 0.2469 0.0000 0.0000 0.0000 0.1661 0.0000 -0.0001 0.0000 0.3040 0.0000 0.0010 -0.0010

2011 0.2898 -0.0047 -0.0037 0.0027 0.3678 0.0000 0.0007 -0.0007 0.2056 -0.0001 0.0000 0.0000 0.1638 0.0000 0.0000 0.0000

2012 -0.0662 0.0019 0.7467 -0.7472 -0.0395 0.0000 0.0000 0.0000 -0.0641 0.0001 0.0000 0.0000 -0.0027 0.0000 0.0000 0.0000

2013 -0.0394 0.0005 0.1134 -0.1130 0.1625 0.0000 0.0000 0.0000 0.0678 -0.0003 0.0000 0.0000 0.0045 0.0000 0.0000 0.0000

2014 -0.0357 0.0003 -0.0013 -0.0002 -0.0566 0.0000 0.0000 0.0000 0.1290 0.0000 0.0000 0.0000 -0.0012 0.0000 0.0000 0.0000

2015 -0.1458 0.0037 0.0008 -0.0006 -0.1674 0.0000 0.0000 0.0000 -0.0758 0.0010 0.0000 0.0000 -0.1541 0.0000 0.0000 0.0000

2016 -0.0391 -0.0020 -0.0059 0.0043 -0.0153 0.0001 0.0004 -0.0003 0.0102 0.0000 0.0000 0.0000 -0.0484 0.0000 0.0002 -0.0002
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Analysis of Constant Market Share (CMSA)
PHILIPINA MALAYSIA BRAZIL BANGLADESH
YEAR
PS EK DP ER PS EK DP ER PS EK DP ER PS EK DP ER
0.000
2005 0.0397 0.0039 -0.0072 0.0054 0.1183 -0.0003 -0.0007 0.0001 0.2260 0.0000 0.0000 0.0000 0.1287 0.0000 0.0000
0
- 0.000
2006 0.1492 0.6625 -0.6622 0.1345 -0.0010 0.0045 -0.0043 0.1626 0.0000 0.0000 0.0000 0.2535 0.0000 0.0000
0.0063 0
- 0.000
2007 0.0645 0.0201 -0.0205 0.0952 0.0012 -0.0002 -0.0002 0.1658 0.0000 0.0000 0.0000 0.1236 0.0000 0.0000
0.0052 0
- 0.000
2008 -0.0275 0.5466 -0.5461 0.1292 0.0012 0.0033 -0.0034 0.2321 0.0000 0.0000 0.0000 0.1799 0.0000 0.0000
0.0003 0
- - 0.000
2009 -0.2168 0.0034 -0.0020 0.0012 -0.0007 0.0029 -0.0020 0.0000 0.0000 0.0000 0.0033 0.0000 0.0000
0.2089 0.2271 0
0.000
2010 0.3398 0.0060 0.0124 -0.0117 0.2646 0.0014 -0.0030 0.0012 0.3198 0.0000 0.0000 0.0000 0.2360 0.0000 0.0000
0
- 0.000
2011 -0.0671 -0.0027 0.0023 0.1419 0.0022 0.1998 -0.2004 0.2681 0.0000 0.0000 0.0000 0.2643 0.0000 0.0000
0.0083 0
- - 0.000
2012 0.0823 0.0140 -0.0134 0.0020 -0.0024 0.0029 -0.0028 0.0000 0.0000 0.0000 0.0082 0.0000 0.0000
0.0007 0.0526 0
- 0.000
2013 0.0904 0.0026 0.0020 -0.0013 0.0038 -0.0007 0.0392 -0.0389 0.0000 0.0000 0.0000 0.0010 0.0000 0.0000
0.0022 0
- - 0.000
2014 0.0902 -0.0014 0.0010 0.0255 0.0008 0.0005 -0.0004 0.0000 0.0000 0.0000 -1.0000 0.0000 0.0000
0.0048 0.0700 0
- - 0.000
2015 -0.0512 0.0006 -0.0012 0.0004 -0.0002 0.0109 -0.0109 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
0.1449 0.1509 0
- - - 0.000
2016 -0.0398 0.0015 -0.0013 0.0009 -0.0022 0.0018 0.0000 0.0000 0.0000 -1.0000 0.0000 0.0000
0.0018 0.0539 0.0308 0

Indonesia's competitiveness is influenced by the effects of standard growth. This is

indicated by the average standard growth value for the period 2005-2016 which shows a
positive value (0.065), which means that the growth of Indonesia's coconut exports is
influenced by the growth of world coconut imports
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Conclusion
1) Based on the analysis Trade Specialization Index (TSI), the TSI is positive and close
to +1 is Indonesia and the Philippines with the average value of each of the 1.00 and
0.97. This shows that Indonesia and the Philippines have strong competitiveness or
a tendency to have a position as an oil exporting country classified into the category
of very mature in the world oil trade.
2) Based on the analysis of Revealed Comparative Advantage (RCA), during the
period 2005-2016 country has a comparative advantage / strong competitiveness for
coconuts is the Philippines and Indonesia. Meanwhile, Malaysia, Sri Lanka, India,
Brazil, and Singapore is not competitive
3) Based on the analysis Constant Market Share (CMS) shows that the
competitiveness of Indonesia much influenced by the growth effect of standards and
the effect of market distribution. This is shown by the average value of a standard
growth for 12 years, namely the period 2005 to 2016 shows a positive value where it
means the growth of exports of Indonesian palm oil import growth is influenced by
the world. Coconut competitiveness Philippines, Malaysia, Sri Lanka, India, Brazil,
and Singapore were also heavily influenced by the effect of a standard growth
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