The competitiveness of Indonesia’s pepper export and its challenges

Abstract

Indonesia is the second-largest pepper (Piper Nigrum L) producer country after Vietnam and followed by India, Brazil, and Malaysia. While Vietnam is the largest black pepper producer, Indonesia is recognized as the largest white pepper-producing country. With the increasing market competition among them in the international market, Indonesia has to increase the market competitiveness of its pepper exports against its competitors. This study aims to analyze the competitiveness of Indonesian pepper exports in the international market by using secondary data from various sources, including from the Indonesian Ministry of Agriculture and the International Pepper Community for the year 2018. It focuses on Pepper beans (HS 0900411) and Pepper Powder (HS090412) and uses two methods, namely Revealed Comparative Advantage (RCA) and Export Products Dynamic (EPD). The RCA analysis shows that Indonesia has a comparative advantage as a pepper exporter on the international market, both for pepper beans and powder. However, the results of the EPD analysis revealed that such an advantage is declining. For example, the study revealed that the export of pepper beans from Indonesia to the United Stated is in the lost opportunity position, and to Vietnam and Singapore are in the falling star position. A similar situation occurs for pepper powder where Indonesia’s export to Japan, Netherlands, and Germany are all in the falling star position. Such situations are caused by some challenges Indonesian pepper exports face, including the fulfillment of the good agriculture practices (GAP) in the upstream sector and compliance to international standards.