Does Chinese Vegetable Oil Consumption Have Positive Implications for the Indonesia-China Trade Balance?

Jan Horas Veryady Purba(1*),

(1) Sekolah Tinggi Ilmu Ekonomi Kesatuan
(*) Corresponding Author

Abstract


Indonesia is the world's CPO producer country, and at the same time, Indonesia also the largest exporter of CPO in global market. Some of the main countries that are becoming export destinations for Indonesia CPO are India, China, the European Union, USA and Pakistan. Empirically, it is seen that the phenomenon of widening gap in Chinese vegetable oil consumption patterns, where consumption growth is higher than domestic production growth. This boosted Indonesia's CPO exports to China and subsequently had an impact on the Indonesia-China trade balance. Analytical method used is ordinary least square (OLS), which is arranged in two-equation models. Findings of this study conclude that (a) Indonesia's CPO exports to China are affected by the increase in consumption of vegetable oils in China. This is consistent with the expected hypothesis; (b) the value of Indonesia's CPO exports to China has a positive impact and helps reduce Indonesia's trade balance deficit. This is consistent with the research hypothesis. Indonesia's CPO exports have a positive impact on the Indonesia-China trade balance, in particular contributing to overcome the Indonesia-China trade balance deficit. This research shows that CPO is Indonesia's strategic commodity that helps overcome Indonesia's trade balance deficit.


Keywords


consumption pattern; widening gap; trade balance deficit

Full Text:

PDF

References


BPS (Statistic Indonesia). (2016). Statistik Kelapa Sawit Indonesia. Jakarta: BPS.

Ministry of Trade Republic of Indonesia. (2017). Ekspor-Impor 2013-2017. Jakarta: Kementerian Perdagangan RI.

Krugman, P. R., & Obstfeld, M. (2005). Ekonomi Internasional : Teori dan Kebijakan. Jakarta: PT Indeks.

OECD. (2017). Agricultural Outlook. Retrieved from http://www.ers.usda.gov/ publications/AgOutlook/Jan2002/ 81

PASPI. (2016). Konsumsi Minyak Nabati China Dan Dampaknya Bagi Ekspor CPO Indonesia. Monitor, Strategic Analysis of Palm Oil, 2(43), 560–566.

Purba, J. H. V. (2017). The analysis of European Union's vegetable oil consumption: "will the European Parliament Resolution Halt the Consumption of Crude Palm Oil in the European Union in the future?" International Journal of Applied Business and Economic Research, 15(19).

Purba, J. H. V., & Magdalena, A. (2017). Pengaruh Nilai Tukar terhadap Ekspor dan Dampaknya terhadap Pertumbuhan Ekonomi Indonesia. DeReMa Jurnal Manajemen, 12(2), 285–295.

Salvatore, D. (1990). International Economics 3rd edition. Singapore: MacMillan International Edition.

Sawit. (2015). Sawit Indonesia. Retrieved from https://sawitindonesia.com/kontribusi-kelapa-sawit-sebagai-pilar-perekonomian-bangsa/

Sipayung, T., & Purba, J. H. V. (2015). Ekonomi Agribisnis Minyak Sawit. Bogor: Kesatuan Press.

Sukirno, S. (2015). Makro ekonomi. Jakarta: Rajawali Press.

USDA. (2018). Index Mundi. United States Department of Agriculture.




DOI: http://dx.doi.org/10.33019/ijbe.v4i1.238

Article Metrics

Abstract view : 152 times
PDF - 95 times

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.