The determinant, efficiency, and potential of Indonesian palm oil downstream export to the global market

Figures & data

Table 1. Trend of Indonesian palm oil downstream products trade (million USD)

Palm Oil Downstream Products
Year	Export	Import	Net Export	Net Export Growth (%)	Export Inside ASEAN	Export Outside ASEAN
2012	6,257	1,256	5,001	-	1,178	5,079
2013	6,308	1,341	4,967	−0.68%	1,446	4,862
2014	6,950	1,313	5,637	13.49%	1,249	5,701
2015	5,165	1,191	3,974	−29.50%	1,019	4,146
2016	6,059	1,346	4,713	18.60%	1,256	4,802
2017	7,059	1,275	5,784	22.72%	1,352	5,708
2018	8,086	1,641	6,445	11.43%	1,305	6,782
2019	7,052	1,530	5,522	−14.32%	1,207	5,846
2020	7,161	1,214	5,947	7.70%	1,232	5,929

Source: UNcomtrade (2022)

Figure 1. The trend of Indonesian palm oil downstream trade (million USD).

Source: UNcomtrade (2022)

Figure 2. The matrix of sample distribution.

Source: (Statistic Times, 2019) and (International Monetary Fund, 2022)

Table 2. Variables, description, unit, expected sign, references, and source

Symbol	Description	Unit	Expected Sign	Source
XPODPindojt	The export value of Indonesian palm oil downstream products (indo) to trading partner (j) at time t	USD		UN Comtrade
GDPindot and GDPjt	The gross domestic product in Indonesia at time t and the gross domestic product in importer at time t	USD	+	World Development Indicator (WDI)
DISindojt	The distance between Indonesia (indo) and trading partner (j) at time t	Km	-	CEPII
GDPCindot and GDPCjt	The gross domestic product per capita in Indonesia (indo) and importer (j) at time t	Ratio	+	World Development Indicator (WDI)
EXCRindojt	The bilateral exchange rate of Indonesia Rupiah toward trading partner (j) currency at time t	USD		UNCTAD Stat
FTAindojt	The dummy free trade agreement with signed and in effect (1 = Indonesia and trading partners already have FTA and 0 = otherwise)	Dummy (0,1)	+	ARIC. ADB
WTOindojt	The dummy WTO Membership between Indonesia (indo) and trading partner countries (j)	Dummy (0,1)	+	WTO
CONTindoj	The dummy common border between Indonesia (indo) and trading partner (j) with 1 = there is a border and 0 = otherwise)	Dummy (0,1)	+	CEPII
COLindoj	The dummy colonial relationship between Indonesia (indo) and trading partner (j)	Dummy (0,1)	+	CEPII
LLj	The dummy countries are categorized as the landlocked (1 = landlocked country and 0 = otherwise)	Dummy (0,1)	-	World Atlas

Source: Author (2022)

Table 3. Descriptive statistics

Variables	Mean	Median	Maximum	Minimum	Std. Dev
XPODPindojt	42,201,432	3,495,154	1,99E+09	21	1,58E+08
LnXPODPindojt	14.924	15.067	21.410	3.045	2.513
LnGDPindot	27.523	27.530	27.679	27.331	0.117
LnGDPjt	24.532	24.617	30.623	17.280	2.403
LnDISindojt	9.093	9.213	9.892	6.787	0.568
LnGDPCindot	8.142	8.148	8.263	8.000	0.086
LnGDPCjt	8.687	8.673	11.528	5.892	1.390
LnEXCRindojt	6.484	7.213	10.771	−1.088	2.774
FTAindojt	0.126	0.000	1.000	0.000	0.331
WTOindojt	0.874	1.000	1.000	0.000	0.332
CONTindoj	0.019	0.000	1.000	0.000	0.138
COLindoj	0.013	0.000	1.000	0.000	0.113
LLj	0.148	0.000	1.000	0.000	0.356

Figure 3. The Top 10 Indonesian palm downstream product export destinations

Source: UNcomtrade (2022)

Figure 4. Export contribution of Indonesian palm oil downstream products.

Source: UNcomtrade (2022)

Table 4. Estimation results of palm oil downstream exports to global market

Independent Variables	FE		PPML		SFGM
	Coefficient	Std. Error	Coefficient	Std. Error	Coefficient	Std. Error
LnGDPindot	−4.580	3.171	−1.529	3.585	−5.102***	0.218
LnGDPjt	1.365**	0.620	0.955***	0.020	0.868***	0.018
LnDISindojt	-	-	−1.241***	0.063	−0.953***	0.077
LnGDPCindot	6.082	4.271	2.094	4.854	7.200***	0.531
LnGDPCjt	−0.692	0.608	−0.342***	0.028	−0.728***	0.037
LnEXCRindojt	0.133	0.105	0.072***	0.014	0.073***	0.016
FTAindojt	0.041	0.371	−0.352***	0.098	0.015	0.131
WTOindojt	0.185	0.224	0.416**	0.176	0.313***	0.106
CONTindoj	-	-	0.566***	0.106	−0.122	0.271
COLindoj	-	-	2.749***	0.083	2.628***	0.298
LLj	-	-	−1.586***	0.301	−2.278***	0.104
Constant	62.945	51.796	30.475	59.228	90.935***	2.638
Δ0					−66.233***	14.386
γ					0.986***	0.003
σ^2					65.822***	13.639
Log-Likelihood					−2338.937
Hausman Test	0.000		-		-
R2	0.941		0.913		-
N	1395		1395		1395

Notes: ** and *** defined as the significance levels at 5% and 10%, respectively.

Table 5. Efficiency of Indonesian palm oil downstream export to global market

Country	TE	Country	TE	Country	TE
Afghanistan	67.10%	Greece	50.80%	Palau	26.70%
Albania	50.90%	Grenada	61.60%	Panama	56.40%
Algeria	69.90%	Guatemala	21.30%	Papua New Guinea	52.60%
Angola	64.20%	Guinea	44.10%	Peru	49.10%
Argentina	27.30%	Guyana	61.60%	Philippines	56.50%
Armenia	30.00%	Haiti	68.00%	Poland	52.60%
Australia	64.30%	Honduras	26.80%	Portugal	40.50%
Austria	17.30%	Hungary	55.90%	Qatar	38.40%
Bahamas	37.90%	India	45.00%	Rep. of Korea	71.80%
Bahrain	47.90%	Iran	55.90%	Romania	27.60%
Bangladesh	20.90%	Iraq	57.30%	Russian Federation	57.60%
Barbados	70.50%	Ireland	6.80%	Rwanda	51.20%
Belgium	62.80%	Israel	67.70%	Saint Kitts and Nevis	21.80%
Benin	69.50%	Italy	56.70%	Saint Lucia	29.00%
Bolivia (Plurinational State of)	63.60%	Jamaica	72.10%	Samoa	69.10%
Brazil	41.30%	Japan	58.40%	Sao Tome and Principe	64.10%
Brunei Darussalam	53.90%	Jordan	57.00%	Saudi Arabia	58.40%
Bulgaria	66.70%	Kazakhstan	49.70%	Senegal	62.30%
Burkina Faso	63.20%	Kenya	42.20%	Seychelles	41.20%
Cabo Verde	49.30%	Kiribati	70.60%	Sierra Leone	65.10%
Cambodia	15.50%	Kuwait	46.80%	Singapore	72.60%
Cameroon	49.40%	Kyrgyzstan	31.20%	Slovenia	49.80%
Canada	64.20%	Latvia	40.60%	Solomon Isds	66.10%
Central African Rep.	50.80%	Lebanon	62.00%	South Africa	62.60%
Chile	46.20%	Liberia	63.70%	Spain	75.00%
China	62.70%	Libya	57.60%	Sri Lanka	47.10%
China, Hong Kong SAR	52.50%	Lithuania	43.10%	Sudan	44.40%
China, Macao SAR	5.30%	Madagascar	53.40%	Suriname	56.70%
Colombia	48.90%	Malawi	77.30%	Sweden	45.70%
Comoros	42.40%	Malaysia	71.10%	Switzerland	45.80%
Congo	64.20%	Maldives	63.30%	Tajikistan	42.70%
Costa Rica	35.70%	Mali	58.80%	Thailand	59.70%
Côte d’Ivoire	52.10%	Mauritania	73.60%	Timor-Leste	25.60%
Croatia	59.60%	Mauritius	64.30%	Togo	68.10%
Cyprus	17.40%	Mexico	58.70%	Tonga	66.60%
Czechia	39.60%	Micronesia	46.30%	Trinidad and Tobago	67.30%
Denmark	74.50%	Mongolia	67.80%	Tunisia	30.10%
Dominican Rep.	28.10%	Morocco	27.20%	Turkey	59.30%
Ecuador	20.80%	Mozambique	63.50%	Tuvalu	54.00%
Egypt	57.60%	Myanmar	33.90%	Uganda	21.60%
El Salvador	21.90%	Namibia	16.00%	Ukraine	48.90%
Equatorial Guinea	39.80%	Nauru	61.50%	United Arab Emirates	73.70%
Estonia	80.70%	Nepal	28.30%	United Kingdom	50.20%
Ethiopia	64.70%	Netherlands	69.20%	United Rep. of Tanzania	47.40%
Fiji	63.60%	New Zealand	62.80%	Uruguay	54.90%
Finland	16.80%	Nicaragua	36.50%	USA	71.10%
France	49.10%	Niger	48.90%	Uzbekistan	62.40%
Gabon	34.60%	Nigeria	61.40%	Vanuatu	59.80%
Gambia	67.10%	North Macedonia	69.60%	Viet Nam	56.10%
Georgia	45.50%	Norway	43.00%	Yemen	52.90%
Germany	64.80%	Oman	32.50%	Zimbabwe	41.70%
Ghana	66.10%	Pakistan	41.10%	Average Value	51.08%

Figure 5. The trend of technical efficiency from 2012 to 2020, by Continents.

Source: Author Calculation (2022)

Figure 6. The trend of technical efficiency (2012–2020), by economy classifications.

Source: Author Calculation (2022)

Table 6. Potential export matrix of Indonesian palm oil downstream (continents)

Continents	Trade Potential Growing	Trade Potential Untapped
Africa	Algeria, Angola, Benin, Burkina Faso, Cabo Verde, Cameroon, Central African Rep., Comoros, Congo, Côte d’Ivoire, Egypt Equatorial Guinea, Ethiopia, Gabon, Gambia, Ghana, Guinea, Kenya, Liberia, Libya, Madagascar, Malawi, Mali, Mauritania Mauritius, Morocco, Mozambique, Niger, Nigeria, Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, South Africa, Sudan, Togo, Tunisia, Uganda, United Rep. of Tanzania, and Zimbabwe (41)	Namibia (1)
America	Argentina, Bahamas, Barbados, Bolivia (Plurinational State of), Brazil, Canada, Chile, Colombia, Costa Rica, Dominican Rep., Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Peru, Saint Lucia, Suriname, Trinidad and Tobago, Uruguay, and USA (27)	Saint Kitts and Nevis (1)
Asia	Afghanistan, Armenia, Bahrain, Bangladesh, Brunei Darussalam, Cambodia, China, China Hong Kong SAR, India, Iran, Iraq, Israel, Japan, Jordan, Kazakhstan Kuwait, Kyrgyzstan, Lebanon, Malaysia, Maldives, Mongolia, Myanmar, Nepal, Oman, Pakistan, Philippines, Qatar, Rep. of Korea, Saudi Arabia, Singapore, Sri Lanka, Tajikistan, Thailand, Timor-Leste, United Arab Emirates, Uzbekistan, Viet Nam, and Yemen (38)	China Macao SAR (1)
Europe	Albania, Belgium, Bulgaria, Croatia, Czechia, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Netherlands, North Macedonia, Norway, Poland, Portugal, Romania, Russian Federation, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, and United Kingdom (30)	Austria, Cyprus, and Ireland (3)
Oceania	Australia, Fiji, Kiribati, Micronesia, Nauru, New Zealand, Papua New Guinea, Samoa, Solomon Isds, Tonga, Tuvalu, and Vanuatu (12)	Palau (1)
Total Countries	148	7

Table 7. Potential export matrix of Indonesian palm oil downstream (economy classification)

Economy Classifications	Trade Potential Growing	Trade Potential Untapped
Advanced Economies	Australia, Belgium, Canada, China, Hong Kong SAR, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Israel, Italy, Japan, Latvia, Lithuania, Netherlands, New Zealand, Norway, Portugal, Singapore, Slovenia, Spain, Sweden, Switzerland, United Kingdom, and USA (27)	Austria, China Macao SAR, Cyprus, and Ireland (4)
Emerging and Developing Economies	Afghanistan, Albania, Algeria Angola, Argentina, Armenia, Bahamas, Bahrain, Bangladesh, Barbados, Benin, Bolivia (Plurinational State of), Brazil, Brunei Darussalam, Bulgaria, Burkina Faso, Cabo Verde, Cambodia, Cameroon, Central African Rep., Chile, China, Colombia, Comoros, Congo, Costa Rica, Côte d’Ivoire, Croatia, Dominican Rep., Ecuador, Egypt, El Salvador, Equatorial Guinea, Ethiopia, Fiji, Gabon, Gambia Georgia, Ghana Grenada, Guatemala, Guinea Guyana, Haiti, Honduras, Hungary, India, Iran, Iraq, Jamaica, Jordan, Kazakhstan, Kenya, Kiribati, Kuwait, Kyrgyzstan, Lebanon, Liberia, Libya, Madagascar, Malaysia, Maldives, Malawi, Mali, Mauritania Mauritius, Mexico, Micronesia, Mongolia, Morocco, Mozambique, Myanmar, Nauru, Nepal, Nicaragua, Niger, Nigeria, North Macedonia, Oman, Pakistan, Panama, Papua New Guinea, Peru, Philippines, Poland, Qatar, Rep. of Korea, Romania, Russian Federation, Rwanda, Saint Lucia, Samoa, Sao Tome and Principe, Saudi Arabia, Senegal, Seychelles, Sierra Leone, Solomon Isds, South Africa, Sri Lanka, Sudan, Suriname, Tajikistan, Thailand, Timor-Leste, Togo, Tonga, Trinidad and Tobago, Tunisia, Turkey, Tuvalu, Uganda, Ukraine, United Arab Emirates, United Rep. of Tanzania, Uruguay, Uzbekistan, Vanuatu, Viet Nam, Yemen, and Zimbabwe (121)	Namibia, Palau, and Saint Kitts and Nevis (3)
Total Countries	148	7

Table

Category	Harmonized System (HS) Code (Six-Digit Level)
Oleofood Complex	151710; 151790; 151800; 170490; 180400; 180500; 180610; 180620; 180631; 180632; 180690; 190120; 190220; 210500; 293621; 293628 (16)
Oleochemical Complex	152000; 152200; 290516; 290517; 290519; 290539; 290545; 290559; 291539; 291570; 291590; 291615; 291732; 291734; 291739; 330410; 330420; 330491; 330499; 330510; 340111; 340120; 340213; 340219; 340490; 382311; 382312; 382319; 382370; 382490; 390950; 391310; 391390 (33)
Biofuel Complex	271020; 382600 (2)

Source: (GAPKI, 2017; MPOC, 2020; Othman et al., 2021; Palm Oil World, 2022)

UNcomtrade. (2022). UNcomtrade Database. https://comtrade.un.org/data/

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