EXPORT COMPETITIVENESS OF INDONESIAN

VI. EXPORT COMPETITIVENESS OF INDONESIAN

CRUDE PALM OIL Indonesian export of CPO has been on an increasing trend in the world market. With respect to the export competitiveness index, Indonesia has recorded above average value of greater than one from the year 1999 to 2005. Considering the overall export of CPO, it was in 1997 that Indonesia recorded export competitive index of 0.59 that showed that its export value in that year fell below that of the year 1997. This can be attributed to the financial crisis that affected the Indonesian economy in 1997. The reduction in export was also recorded in the year 2003 when the export competitive index fell from 1.2 in 2002 to 0.999 in 2003 as shown in Table 16. That reflected a slight decrease in the export volume of CPO to the world market. From the results therefore it can be concluded that in overall export market of CPO, Indonesia has recorded a steady rise in export competitiveness over the years as it recorded export competitive index values of greater than one in all years since 1998 to 2005 except in 1998 and 2003 where it recorded a decline in export competitiveness. Table 16. Export Competitiveness of Worlds Crude Palm Oil Exporters, Year 1998 to 2005 Country 1998 1999 2000 2001 2002 2003 2004 2005 Indonesia 0.5871 1.670 1.1500 1.0150 1.2028 0.9989 1.0950 1.0728 Malaysia 1.1743 0.893 0.9408 0.9981 0.9286 0.9965 0.9348 0.9684 Thailand n.d n.d n.d n.d 0.5078 1.4373 0.9295 0.6337 Papua New Guinea 0.9126 0.8928 1.2212 0.8231 0.9054 0.8951 1.2252 0.7896 Singapore 0.9528 0.9072 0.7588 0.7878 0.8969 1.0107 0.8600 0.7831 United Arab Emirates n.d n.d n.d n.d 0.9049 1.7745 1.2519 0.7293 Colombia 1.3519 0.9627 0.9949 0.7844 0.8667 1.1977 1.6844 0.9495 Hong Kong 0.7015 0.6833 1.5518 1.0262 1.5163 0.5745 n.d n.d Source: Oil World, 2007. Note: n.d - indicate no data available With respect to Malaysia, Indonesia has recorded a steady increase in its export market share in the world market. However, Malaysia has recorded a decline in the overall market share in the world market. It was only in 1998 that it recorded an increase in its export competitiveness while the rest of the period it registered a decline in the export competitiveness based on its export competitiveness index. There are also other CPO exporting countries in the world alongside Indonesia and Malaysia. Some of these countries have registered an increase in export market share in the world market. The market share of Hong Kong fluctuates and it registered an increase in the years 2000, 2001 and 2002 while the rest of the period, it recorded declining export competitiveness index meaning a decline in export market share of its CPO.

6.1 Indonesian Crude Palm Oil Export Market