Abstract
Indonesia is faced by global competition, in particular for its fruit commodity. Orange a commodity currently prioritized to be developed. The availability of seasonal oranges provides an opportunity for the imported orange products to substitute the local oranges. The objective of this study was to analyze the competition between the local oranges and imported oranges. The analytical method used was Almost Ideal Demand System (AIDS). The results show that the local oranges can compete with the imported oranges from China. It is indicated by the positive cross elasticity value (substitution). The decline in the price of oranges imported from China will reduce the market share of local oranges in Indonesia. Therefore, Indonesia needs to improve the marketing efficiency of its local oranges and increases the local orange production to meet its consumption needs of oranges.
Highlights
Indonesia is a country that is incorporated in regional, multilateral and bilateral agreements
This study was aimed to analyze the level of competition between fresh local oranges and fresh imported oranges in Indonesian citrus market, and to analyze policy alternatives that need to be applied as an effort to increase local citrus production
The abundance of oranges production in China causes the price of oranges from China to be very low; they are exported to a lot of countries in the world including to Indonesia
Summary
Indonesia is a country that is incorporated in regional, multilateral and bilateral agreements. The free trade era requires the readiness of domestic production capability and the ability to improve the competitiveness of its products to compete with the products of other countries. One sector affected by the free trade in Indonesia is the horticulture sub-sector. Based on the Strategic Plan of Directorate General of Horticulture from 2015 to 2019, horticulture commodity continues to grow and develop as a commodity in great demand by consumers. A number of horticultural commodities become a strategic issue that obtains serious attention from the government and business actors include oranges from the fruit group; activities and their realization will be prioritized on this commodity
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