Indonesian Oil Palm Export Market Share and Competitiveness to European Union Countries: Is The Roundtable on Sustainable Palm Oil (RSPO) Influential?

Hansen Tandra,Mukhamad Najib,Yusman Syaukat,Arif Imam Suroso

doi:10.17358/jma.18.3.342

Hansen Tandra, Mukhamad Najib + Show 2 more

Open Access

https://doi.org/10.17358/jma.18.3.342

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Abstract

The European Union is one of the main export destinations for Indonesian palm oil. However, this area requires the sustainable development of palm oil products. Four countries from the European Union region are consistently export destinations for palm oil: Netherlands, Italy, Germany and Spain. RSPO exists as one of the institutions that ensure sustainable development in palm oil production. This study aims to analyze whether there were differences before and after implementation of RSPO in export market share and the competitiveness of CPO and RPO exports to the Netherlands, Italy, Germany, and Spain. The analysis was carried out during 1995-2020 using the paired sample t-test and the Wilcoxon signed-rank test. The analysis results show that there are differences in the export market share and competitiveness of Indonesian CPO exports to the Netherlands, Italy, Spain and Germany. The same finding was also found in RPO, especially in Indonesia's export market share. However, there is no difference in the export market share and competitiveness of Indonesian RPO exports to the Netherlands before and after implementing the RSPO in 2008. Keywords: european union, export market share, export competitiveness, palm oil

Highlights

Palm oil is one of Indonesia’s most potential plantation commodities to increase the surplus in international trade
The market share of CPO and RPO exports is measured by the value of exports from Indonesia to European Union countries divided by the total value of world CPO and RPO exports
The results found that the presence of the Roundtable on Sustainable Palm Oil (RSPO) had an impact on the export market share and Indonesia CPO exports competitiveness to the Netherlands, Italy, Germany and Spain

Summary

Introduction

Palm oil is one of Indonesia’s most potential plantation commodities to increase the surplus in international trade. Based on the Ministry of Agriculture (2021), oil palm is a agriculture commodity with the highest export contribution for Indonesia with 28.279 million tons. The other benefit of industrial-based oil palm development is that it creates a source of employment that can increase the standard of living and household income of oil palm farmers (Suroso and Ramadhan, 2014; Tandra et al 2021). Oil palm has an essential role in the national economy, issues related to sustainability resulting from palm oil production have created polarization in recent years for policymakers and companies (Vergura et al 2019). The sustainable issue could be an investment in the stock market with indicators of the adoption of sustainable certification (Suroso et al 2021)

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