The Competitiveness of Indonesian Coconut Oil and Its Determinants

Mochammad, Ardimansyah, Febriann — Fri, 10 Apr 2026 00:00:00 +0700

Coconut oil represents one of Indonesia's most significant agricultural export commodities, yet its export performance has exhibited considerable fluctuations over time, reflecting the influence of various domestic and international factors. This study identifies the key determinants of Indonesia's coconut oil export competitiveness, as measured by the Revealed Symmetric Comparative Advantage (RSCA) index, employing the Autoregressive Distributed Lag (ARDL) model over the period 1970 to 2023. The ARDL framework was selected given that all variables are stationary at first difference I(1) under both the Augmented Dickey-Fuller and Phillips-Perron tests, satisfying the preconditions for bounds testing. The results indicate that rural population growth, agricultural trade openness, and coconut oil yield exert a positive and significant influence on export competitiveness, whereas rising coconut oil prices and exchange rate volatility are found to have a detrimental impact on export performance. The findings of this study suggest that targeted policy interventions are warranted, particularly exchange rate stabilization mechanisms administered by Bank Indonesia to mitigate the adverse effects of currency volatility on export competitiveness, fiscal incentives directed at coconut oil processing industries to reduce dependence on primary commodity exports, and strategic investments in agricultural extension programs aimed at enhancing yield productivity among smallholder farmers.

Keyword: Autoregressive Distributive Lag (ARDL); Coconut Oil; Competitiveness, International Trade

JEL Classification: F14, Q17, C32

Journal of Business and Political Economy : Biannual Review of The Indonesian Economy

The Competitiveness of Indonesian Coconut Oil and Its Determinants