Competitiveness Analysis of Indonesian CPO Exports in the International Market
Indonesia is the world’s largest producer and exporter of processed palm oil products, namely Crude Palm Oil (CPO). In recent years, Indonesia has experienced a significant increase in CPO production and exports. In this article, we will discuss an analysis of Indonesia’s CPO export competitiveness in the international market, as well as the factors that affect competitiveness.
Indonesia’s CPO Exports Increase
Data from UN Comtrade shows that the value of Indonesia’s CPO exports has increased significantly since 2012. The average value of Indonesia’s CPO exports from 2012 to 2021 is US$17 billion. The lowest export value occurred in 2016 at US$14 billion, while the highest export value occurred in 2021 which reached US$26 billion. This increase can be attributed to several factors, including an increase in CPO production in Indonesia and an increase in CPO prices on the international market.
Analysis of Indonesia’s CPO Competitiveness
The analysis of Indonesia’s CPO competitiveness uses the Revealed Comparative Advantage (RCA) and Export Competitiveness Index (ECI) methods. The results of the analysis show that Indonesian CPO has excellent competitiveness in the international market. This competitiveness can be attributed to several factors, including potential land area supported by cheap human resources and fertilizer subsidies in Indonesia. In addition, the analysis also shows that Indonesia’s CPO has a comparative advantage in terms of lower production costs compared to other countries.
Indonesia’s Main CPO Competitors
Indonesia’s main CPO competitor is Malaysia, which has a 33% production share. However, Indonesia still has a comparative advantage in terms of potential land area and lower production costs. The RCA analysis shows that Indonesia’s CPO has higher competitiveness compared to Malaysia.
Conclusion
In conclusion, the analysis of Indonesia’s CPO export competitiveness in the international market shows that Indonesia has very good competitiveness. The increase in Indonesia’s CPO exports can be attributed to several factors, including an increase in CPO production in Indonesia and an increase in CPO prices in the international market. Indonesia’s CPO competitiveness can also be attributed to several factors, including potential land area supported by cheap human resources and fertilizer subsidies in Indonesia. In addition, analysis also shows that Indonesia’s CPO has a comparative advantage in terms of lower production costs compared to other countries. As such, Indonesian CPO could continue to be an important component in global trade.
