Export competitiveness of Indonesian coffee in the United States market

Abstract

Indonesia’s economic growth has slowed down during the pandemic. Coffee is a foreign exchange-producing agricultural commodity for Indonesia and has become a pillar of the national economy because of its contribution to the gross domestic product. The purpose of this study was to analyse the competitiveness of Indonesian coffee exports in the United States market. The methods employed included the Revealed Comparative Advantage, which can measure export competitiveness comparatively, and the Export Product Dynamic method to analyse and map the position of export competitiveness. The analysis results were also measured to compare the export competitiveness of Vietnamese coffee. The findings showed that Indonesian coffee and Vietnamese coffee in the United States market have a value above 1, proving that both have export competitiveness advantages. The average Revealed Comparative Advantage value of Indonesian coffee is higher than that of Vietnamese coffee, meaning that Indonesian coffee exports are superior to Vietnamese coffee exports to the United States. Meanwhile, the results of the Export Product Dynamic analysis showed that the competitiveness of Indonesian coffee exports is in the position of Lost Opportunity, where the position has shifted from the pre-pandemic position, namely Retreat. Meanwhile, the competitiveness of Vietnamese coffee exports was in the Rising Star position, which shifted from the previous position of Lost Opportunity. Lost Opportunity of Indonesian coffee shows that the strength of Indonesia’s coffee commodity business is weak, but commodity exports are still competitive. The analysis results indicated that even though Indonesia’s coffee has export competitiveness, it is not competitive enough in the United States. This study provided an overview of the export competitiveness of Indonesian coffee in the United States, which can be used as a basis for determining strategic steps in an effort to dominate the market to obtain trade benefits