Analysis On Competitiveness And Factor Affecting Of Indonesian Natural Rubber Exports In The International Market

Indonesia is an agricultural country,where the agricultural sector plays an important role in the Indonesian economy.The leading export commodity of the Indonesian agricultural sector is natural rubber;the average export of Indonesian natural rubber during the 2001-2020 period was2,298,966 tons per year or contributing 27% of the average world natural rubber exports.In the same period,Indonesian natural rubber’s export trade balance showed positive results with an average surplus of 4,361,033 USD thousand per year.Indonesia also has the largest natural rubber land resource in the world,amounting to 3.8 hectares in 2020.Despite having the largest land area in the world,Indonesia is still in the second position as the largest exporter of natural rubber after Thailand in the international market,with a difference in natural rubber exports of 6% per year or792.811 tons per year.This shows that the land area owned is not positively proportional to the volume of Indonesia’s natural rubber exports.It cannot be denied that in the current era of free trade and globalization,many factors can affect commodity exports in the international market and lead to competition between countries.Therefore,in facing this era,it is important to see and analyze the competitive advantage and what factors affect the export of natural rubber in the international market.This study aims to analyze the export competitiveness of Indonesian natural rubber in the international market based on competitive advantages and comparative advantages and the factors that affect the export volume of Indonesian natural rubber in the international market.The sample of this research is fifteen export destinations for Indonesian natural rubber which routinely imported Indonesian natural rubber during the period 2001-2020,namely Belgium,Brazil,Canada,China,France,Germany,Italy,Japan,Netherlands,Rep.of Korea,Singapore,Spain,Turkey,United Kingdom,and the United States of America,and three competitor countries for natural rubber in the international market,namely Malaysia,Thailand,and Viet Nam.With research data obtained from secondary data,all data that have been obtained were analyzed using three different methods,Revealed Comparative Advantage(RCA),Export Competitiveness Index(ECI),and panel data regression with gravity model approach.This study indicates that Indonesia’s natural rubber has a strong comparative advantage in the international market(RCA>1)and is in second place after Thailand.The average RCA value of Indonesian natural rubber is 29.49.In addition,Indonesia’s comparative advantage in fifteen export destination countries is also has a strong comparative advantage(RCA>1).Meanwhile,Indonesian natural rubber has a strong competitive advantage in the international market and an increasing market share trend;with an ECI value of 1.01,Indonesia’s ECI value is in second place after Viet Nam.Meanwhile,in Indonesia’s natural rubber export destination countries,two countries,namely Singapore and Belgium,do not have a strong competitive advantage.However,the other thirteen natural rubber export destinations have a strong competitive advantage and rising market share trends.The panel data regression with gravity model approach is used to analyze the factors that affect the exports volume of Indonesian natural rubber.The study uses 300 observations,and the results show that four independent variables significantly affect the exports volume of Indonesian natural rubber,namely GDP,export price,economic distance,and production.In comparison,two other independent variables,namely the real effective exchange rate and population,have no significant effect on the exports volume of Indonesian natural rubber.The recommendation in this study are increase productivity through intensive counseling and the introduction of new technology to natural rubber farmers regarding the efficient processes and producing good quality.The government must make strong cooperation with importing countries that have the potential to import natural rubber from Indonesia,this potential can be seen from the GDP indicator,and must have a design marketing strategy,such as production strategies,pricing strategy,and cost minimization.