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Paper ID: 208

The Analysis of Indonesia Crude Coconut Oil’s Competition in International Market

Rizki Puspita Dewanti 1 and Dyah Ayu Suryaningrum 2

1,2 Sebelas Maret University

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Indonesia is the world’s largest producer of coconut. Its very high coconut production makes Indonesia one of the world’s exporters of coconut oil. Indonesian coconut oil trading partners are the countries that developing coconut derivative products, such as the United States, Netherlands, and Germany. Coconut oil is currently needed in various industrial fields such as food, medicine, and cosmetics industries. The objectives of this study were to (1) analyze the position of Indonesian coconut oil on the international market; (2) analyze the factors that affect the demand share for Indonesian, Philippines, and Malaysian coconut oil in the international market; and (3) analyze the level of competition of Indonesian coconut oil with its competitors in the international market. The analytical method used was Almost Ideal Demand System (AIDS). Indonesian coconut oil successfully competed in the international market, especially in the US and German markets. Indonesia competed with Philippines in both markets as it was indicated by the positive value of cross-price elasticity. Indonesia’s export of coconut oil has the opportunity to be increased in the Netherlands and German markets, because the elasticity of its own price in the
Netherlands market is positive and the expenditure elasticity in the German market was the highest among other exporting countries.

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