Analysis of the competitiveness of Indonesian palm oil and cocoa export commodities: A study on Malaysia and Singapore export markets

This research aimed at analysing competitiveness of Indonesian palm oil and cocoa export commodities to Malaysia and Singapore markets. The two commodities were selected on the basis that they are Indonesian main export commodities, which contribute considerably towards the national income. Despite the significant contributions of the two commodities, the reality proves that Indonesia is still not able to optimise the potency and increase the competitiveness of those export commodities. Revealed Comparative Advantage (RCA) was employed as the competitiveness analysis method by using data in the period of 2009-2013. Results of the analysis revealed that Indonesian palm oil commodity has a strong competitiveness in Malaysia and Singapore export markets, as indicated by RCA index, which is greater than one (RCA>1). Similarly, cocoa commodity also demonstrates a strong competitiveness since its RCA index value is greater than 1 (RCA> 1) in Malaysia and Singapore export markets. However, the upward trend of the price of palm oil and cocoa commodities in the international market is not accompanied by the rise in the export product value. As a result, Indonesia is still not able to gain benefits from this condition. Moreover, the change in the internal policy of export destination countries continues to restrict the import of palm oil and cocoa commodities and this has become a challenge for Indonesia in order to boost the competitiveness of both commodities in the future.