Factors affecting the volume of Indonesian CPO exports in international trade

Abstract

Palm oil is one of the commodities of plantation products that has an important economic role in Indonesia and is also an export commodity as foreign exchange earner for oil and gas. Palm oil produces the main product Crude Palm Oil (CPO). As main product, CPO continues to experience an increase in export volumes in line with the growing need for CPO in export destination countries, both as food raw material and biodiesel. However, when the implementation of the customs policy was issued in 2009, there was a change in the composition of exports from CPO to palm-derived products, namely RBD palm olein and PFAD. The main markets for Indonesian palm oil products are in Asia and Europe, the four largest countries, including India, Malaysia, the Netherlands, and Italy. This research aims to analyze the factors that influence the volume of Indonesian CPO exports in export destination countries. Based on the results of Ordinary Least Square (OLS), the variables that significantly affect Indonesia’s CPO exports in export destination countries are (1) India: export volume lag, (2) Malaysia: soybean oil prices, (3) Netherlands: RCA, and (4) Italy: estimates of sunflower oil, RCA, exchange rates and dummy exit fees.