Page 195 - Contributed Paper Session (CPS) - Volume 7

CPS2058 Dewati W. et al.

Export Competitiveness of Sumatera Coffee
Dewati Werdaningyas, Irwanto Leorisa
Central Bank of Indonesia, Jakarta, Indonesia

Abstract
The Indonesian coffee competitiveness, especially Sumatera, is considered low
compared to other competing countries such as Brazil and Vietnam. This paper
has two aims, the first is to identify determinants of competitiveness of coffee
exports, second is to provide recommendations to improve coffee export
performance. This research employs framework and toolkit in Trade
Competitive Diagnostic by using Trade Outcome Analyisis and Competitivenes
Analysis with Analtycal Hierarchy Process, enhanced by focus group discussion
with coffee experts in Province of Lampung, Province of North Sumatera,
Province of West Sumatera and Province of Aceh. Based on Trade Outcome
Analyisis, the addition of new export destination countries from Indonesia and
Vietnam tends to be bigger in number than Brazil. In terms of quality,
Indonesia's coffee export products are similar to Brazil and Vietnam and are
dominated by Arabica. Based on Analytical Hierarchy Process, the main
determinant of competitiveness in developing Sumateran coffee are: firstly is
access to the market, such as tariff barriers from export destination countries
and non-tariff barriers such as certification standards; secondly is production,
to overcome the condition of having low productivity along with the limitation
of infrastructure and lack of human resource capabilities; thirdly is the
infrastructure for trade promotion and lastly is the macro incentive. We
recommend to establish a comprehensive institution, from upstream to
downstream of the coffee sector chain, and strengthening the role of state
owned enterprises as has been successfully applied in Vietnam. Also, in order
to increase productivity of coffee plantation through replanting and
rejuvenation is the most effective way. It is necessary to support road
infrastructure improvements in coffee plantations as well as the application of
post-harvest technology through dome infrastructure such as drying houses.

Keywords
Trade Competitive Diagnostic; Analytical Hierarchy Process; Sumatera; Coffee

1. Introduction
Indonesia's trade balance experienced a declining trend in recent years.
The declining performance was mainly caused by commodity exports, both in
volume and price. In this regard, an appropriate method is needed to

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