AGB 100_ASU_ASSIGNMENT_2024_COMPETITIVENESS ANALYSIS AND SUPPORTING STRATEGY OF EXPORT DUTY POLICY ON INDONESIAN COCOA COMMODITY

COMPETITIVENESS ANALYSIS AND SUPPORTING STRATEGY OF

EXPORT DUTY POLICY ON INDONESIAN COCOA COMMODITY

Introduction:

Cocoa is one of the main agricultural commodities in most countries, both in terms of

imports and exports. In Indonesia, cocoa is one of the plantation commodities with the fifth

largest production volume after palm oil, coconut, rubber, and sugarcane (Suryana et al.

2014). In 2015/2016, Indonesia's cocoa bean production reached around 320,000 tons, placing

Indonesia in third place behind Côte d'Ivoire (1,581,000 tons) and Ghana (778,000 tons), and

dominating total cocoa bean production in the Asia and Oceania region, which together

produced 397,000 tons of cocoa beans (International Cocoa Organization 2018). Moreover, in

Indonesia, cocoa is the third highest foreign exchange earning agricultural commodity after

palm oil and rubber. In detail, cocoa is a source of income for 1.7 million farming families

across the province, and 81,000 families of market plantation employees. It also plays a role

in job creation, advancing agribusiness and agro-industry in the country (Directorate General

of Plantation 2016).

However, despite this, the cocoa agribusiness in Indonesia still has problems that need

to be faced, such as the potential decline in plantation productivity due to pest attacks, and the

suboptimal development of downstream cocoa products. Nevertheless, it can be said that

Indonesia's cocoa market opportunities are still quite large, both in terms of exports and

domestic needs. In addition, the development of business and the provision of added value to

the cocoa agribusiness.

There is also an export duty imposed by the Indonesian government that affects the

production, export and import schemes of Indonesian cocoa commodities. Table 1 shows that

Indonesia's cocoa production has experienced a downward trend from 2015/2016 to

2021/2022. Moreover, Indonesia's cocoa production had touched the number below 200,000

tons in 2020/2021 and 2021/2022. This can happen because one of the factors is the

implementation of export duty set by the Indonesian government in 2010.

Export duty is a policy in the form of a levy on certain commodities to be exported

(Gautama 2019). The implementation of the export duty policy carried out by the Indonesian

government in 2010 has the aim of supporting the availability of cocoa bean supplies for the

domestic industry and increasing the downstream processing of Indonesian cocoa products.

Gautama (2019) explains that the export duty policy on cocoa commodities also aims to

change the export scheme of raw goods into processed materials. As a result of the

implementation of export duties in 2010, there was a decrease in the number of cocoa bean

exports, due to a change in focus on the types of cocoa products exported. The imposition of

the export duty was intended to increase exports of Indonesian processed cocoa products in

the international market, such as cocoa butter, powder and paste.

However, with this policy, it can be said that Indonesia's processed cocoa products are

more of an export focus than cocoa bean exports. This means that in order to export processed

cocoa products, a sufficient amount of cocoa bean raw materials is required, which in turn

causes some domestic industries to experience difficulties in terms of cocoa inputs, thus

requiring cocoa imports from the international market. The decline in Indonesia's cocoa bean

production is in line with the increase in Indonesia's imports of cocoa beans. Figure 1 shows

that since 2002 the quantity of cocoa beans imported by Indonesia has tended to be between

20,000 and 30,000 tons, but since the implementation of the export duty policy by the

government in 2010, since then the quantity of Indonesian cocoa beans imports has increased

with the highest import quantity occurring in 2015, amounting to 252,729 tons.

The export quantity of Indonesian cocoa beans from 2002 to 2010 has ranged from

260,000 to 490,000 tons, with exports in 2006 being the highest with an export quantity of

490,778 tons. However, since the implementation of the export duty policy by the government

in 2010, the quantity of Indonesian cocoa bean exports has decreased quite sharply. Range its

export quantity from 2011 to 2021 is only around 20,000 to 210,000 tons, with 2021 as the

year with the lowest number of exports, at only 22,280 tons. This is in line with changes in the

quantity of exports of processed cocoa products, namely fat, powder and paste. In the period

2002 to 2010, exports of processed cocoa products did not exceed 60,000 tons in quantity.

However, since the implementation of the export duty in 2010, the quantity of exports of

processed cocoa products has increased from before the implementation of the export duty

policy. During the period 2011 to 2021, the export quantity of processed cocoa products was

always higher than before the implementation of the export duty policy. The decrease in the

quantity of cocoa exports and the increase in exports of processed cocoa products (fat,

powder, and paste) from 2002 to 2021 can be seen in Figure 2 and Figure 3.

Based on the description above, it can be seen that with the export duty policy set by

the government in 2010 there was a change in the export scheme of cocoa beans and its

derivative products (fat, powder, and paste), i.e. the export of cocoa beans decreased because

Indonesian cocoa exports became more focused on the export of processed products.

However, with the change in export scheme, in order to produce processed cocoa products, a

sufficient quantity of cocoa base material is required, while Indonesia's cocoa production

trend has been declining in recent years, thus requiring Indonesia to import cocoa beans so that

the production and processing of cocoa derivative products can continue.

The export value of Indonesian cocoa beans before the implementation of the export

duty policy tended to increase in value from 2004 to 2010, namely in 2004 the export value of

Indonesian cocoa beans was 369,863,000 USD and continued to increase until 2010, which

had an export value of 1,190,740,000 USD. However, since the implementation of export

duty, the export value of Indonesian cocoa beans has continued to decline since 2011, namely

the export value of Indonesian cocoa beans is 614,496,000 USD, until 2021 the export value

of Indonesian cocoa beans is at 56,290,000 USD. The graph of the export value of Indonesian

cocoa beans from 2002 to 2021 can be seen in Figure 4.

Figure 4 Indonesia's cocoa bean export value 2002-2021 (ITC) Indonesia's cocoa

derivative products (paste, powder, and butter) condition experienced the opposite. Before the

implementation of the export duty policy in 2010, Indonesian cocoa derivative products

including paste, powder, and butter experienced a fluctuating trend, the increase in export

value that occurred before the export duty policy was not too high. In 2002, the export value

of Indonesian cocoa paste amounted to USD 14,375,000, cocoa powder amounted to USD

14,375,000. 42,509,000 USD, and cocoa butter amounted to 88,789,000 USD, until 2010 the

export value of Indonesian cocoa paste was 66,093,000 USD, cocoa powder amounted to

103,183,000 USD, and cocoa butter amounted to 236,808,000 USD. After the implementation

of the export duty policy in 2010, cocoa derivative products have experienced a high upward

trend in export value since 2010, until 2021,

After lasting for more than 10 years, the implementation of export duties on

Indonesian cocoa commodities has caused changes in Indonesia's cocoa production, export

and import schemes, therefore it is necessary to review whether the implementation of export

duties has a positive impact on the export of Indonesian cocoa derivative products, in terms of

competitiveness in the international market.

1.1 Problem Formulation

Indonesia is one of the largest cocoa producers in the world based on the quantity of

exported products. However, overall, Indonesia's cocoa bean production since the imposition

of export duty in 2010 has experienced declining production levels, as the purpose of

imposing export duty on cocoa commodities is to increase exports of cocoa-derived products.

Since the implementation of the export duty by the government in 2010, until now, processed

cocoa bean products such as paste, oil and cocoa powder have continued to increase in export

quantity. However, in order to continue producing processed cocoa products with the

declining level of domestic cocoa bean production, the Indonesian government also imports

cocoa beans to continue providing raw materials to be processed into cocoa derivative

products.

The implementation of export duty that has been going on for more than 10 years

needs to be analyzed regarding what kind of impact it has on cocoa commodity exports.

Based on the current conditions of production, exports and imports of Indonesian cocoa

commodities, it is necessary to analyze the impact caused by the implementation of export

duties on cocoa commodities, in terms of product competitiveness in the international market.

Competitiveness can be defined as the ability Competitiveness analysis is a process of

managing a commodity to compete in a competition (in this case, international trade).

Competitiveness analysis can be done competitively and comparatively in order to formulate

policies that can be done so that a commodity remains competitive in the international market.

1.1 Cocoa (Theobroma cacao)

Cocoa (Theobroma cacao) is an Indonesian plantation commodity that when

processed will produce cocoa and chocolate products with natural antioxidant content (Sari et

al. 2015). According to Suryaningrat et al. (2015), cocoa produced in Indonesia has

advantages such as good quality of chocolate fat and cocoa powder, and does not melt easily,

which causes Indonesian cocoa to be used for blending.

Cocoa butter is one of the products from cocoa that has a good price and can be

utilized to become a value-added product. This can be due to the fact that cocoa butter can be

used as a baking ingredient, and can be used in the chemical and pharmaceutical industries

(cosmetics or medicines).

As the demand for cocoa butter increases, the production of cocoa beans also

increases. This increase in production can be attributed to the fact that over time, the cocoa oil

processing industry has also grown, followed by developments in the food and cosmetic

industries. This has also led to more research on the utilization of cocoa butter. Here are some

examples.

1. Research by Ramlah and Barra (2018), on making white chocolate based on deodorized

cocoa butter. Deodoration in cocoa butter processing is an oil refining process that aims

to eliminate unpleasant odors. The result is that white chocolate made through the

deodorization process has a level of acceptance in the "good" category.

2. Research by Loppies et al. (2019), on the characteristics of oleogels from vegetable oils,

namely based on beeswax and cocoa butter as oleogelators. Olegel is a gel whose liquid

phase is oil. Oleogel has the potential to be applied in the food, pharmaceutical, cosmetic,

and petrochemical industries. Cocoa butter has potential as an oleogelator because it has

the main components, namely stearic acid, oleic acid, palmitic acid, and oleic acid (Ross

2000). Finally, the oleogel with the best characteristics was obtained from the

oleogelation process with palm oil and an oleogelator composed of 1% cocoa butter and

9% beeswax).

3. Research by Ramlah (2017), titled "Quality Characteristics and Effects of Adding Polyphenols to

Cocoa Fat-Based Hand Body Lotion on Skin". From the results of the study it is known that

hand body lotion from fat and polyphenols from cocoa beans has lotion properties, can

improve moisture, also has the potential to protect skin damage that accompanies the

aging process due to UVB exposure and can maintain the elasticity of the skin.

4. Research by Kasim and Barra (2017), on the effect of cocoa butter addition on the

stability, irritation effect and sensory properties of hair. The final results obtained were,

with the addition of 1.0% cocoa butter to the shampoo formula, the viscosity value

obtained was very high, and had good sensory value. In addition, the addition of cocoa

butter Good impact on consistency, color and foam. The shampoo properties obtained were

stable, the pH was in line with the standard and the irritating effect was very small.

1.2 Export Theory and Export Duty

Export is an activity of selling products from one country to another (Tan 2009).

Basically, the purpose of exports is to earn or obtain foreign exchange in the form of foreign

currency which is used to increase GNP and economic growth. Exports are goods and services

sold to residents of other countries plus services provided to residents of these countries

through ship transportation, capital, and other things that help these exports (Nopriyandi and

Haryadi 2017).

The increase in exports of upstream products in Indonesia has led the government to

implement an export tax policy, with the aim of maintaining the availability of raw materials

and developing domestic commodity production. Export taxes are generally applied by

countries that emphasize primary raw materials in international trade to protect the need for

raw materials in the domestic market (Nugroho and Lubis 2020).

Based on Helpman and Krugman (1989), Figure 6 shows that the application of export

duty causes a decrease in the price of a commodity to Pt, resulting in an increase in consumer

surplus, and a decrease in producer surplus by PtCEPf. In addition, the application of export

duties will cause revenue of P*tACPt, while there is a loss of revenue due to the application

of export duties of BCE and a profit of P*ABPf.

According to Bonarriva et al. (2009), the purpose of implementing an export tax is

that in addition to supporting downstream industries, an export tax can also be used as a price

control instrument. For example, if a country has a shortage of basic commodities which

results in an increase in the price of commodities in the country, the government will try to

limit exports to reduce the price of commodities in the country. The export rate of the

commodity is intended to control domestic inflation by maintaining more domestic products.

Therefore, it can be seen that the aspects that are affected by export taxes include commodity

production, the amount of exports, and the price of exported commodity products.

Based on Law No. 10/2010, the implementation of export duties has the following

objectives: ensuring domestic needs, protecting the preservation of natural resources,

anticipating price increases of export commodities in the international market, and

maintaining the stability of certain domestic commodity prices. The implementation of export

duties on certain commodities has an impact on the price of commodities subject to export

duty tariffs. Export duties are intended to create conditions that tend to defend the interests of

domestic consumers of exporting countries and producers of importing countries (Munadi

2007).

1.3 Competitiveness

Competitiveness is the ability to manage a commodity in order to remain competitive

in a competition. Competitiveness can also be defined as productivity or output produced by

labor (Yulia and Chandriyanti 2021). According to Suryana (2014), competitiveness analysis

needs to be done to find out the competitive and comparative advantages of a commodity in

the international market, so that with the analysis and knowledge of competitiveness, it can be

useful for making policies and strategies to improve the quality of a commodity in terms of

exports. Competitiveness is divided into two, namely competitive and comparative

advantages. Sargsyan (2018) explained that there are several differences between competitive

and comparative competitiveness, which can be seen in Table 2.

One method to measure competitiveness is Revealed Comparative Advantage (RCA).

Research conducted by Manalu (2019) analyzed RCA to measure the competitiveness of

Indonesian cocoa bean exports to Malaysia using secondary data from the Directorate General

of Plantations, Central Bureau of Statistics, International Trade Statistics Database, and

previous research. In addition to RCA, there is also the Porter's Diamond Model method to

measure the competitiveness of a commodity in a country, with factors such as production,

demand conditions, related and supporting industries, strategy, structure, and competition of

companies, government, and opportunities. Research conducted by Nurohman (2018) was

conducted using the Porter's Diamond Model method on tea commodities to measure its

competitiveness in Indonesia by considering all the factors contained in the Porter's Diamond

Model. This was done by making a questionnaire which was then distributed to parties

concerned with the industry.

1.4 Impact of Export Duty Implementation

One of the objectives in the application of export duties carried out by the government

is to restrain the export rate of an item (Rohmawati and Verico 2022). Of course, the impact

caused by the export duty policy varies for each country that implements the policy.

According to Kerr and Gaisford (2007), there is a special case of applying export duties to a

small country. A small country is referred to as Home, which is a country that is assumed to

relatively not affect world market prices. The export tax graph in the case of a small country

can be seen in Figure 7.

The demand and supply curves in the Home country are symbolized as D and S, the

two curves intersect to form the initial equilibrium point. Home has a domestic price that is

equal to the international market price, so that, Pi = P*, then, at the price Pi = P*, the initial

quantity of supply and demand is formed, symbolized as QSi and QDi, in addition there is an

initial quantity of exports, namely QXi, where the quantity of supply has exceeded the

quantity of demand.

Then, with the addition of export duty (Tf), the domestic price decreases to Pf, so in

this condition, Pf + Tf = P*. This indicates that producers of a commodity in the Home

country have the option to sell their products domestically at a price of Pf + Tf = P*. Pf, or sell

it to the international market at P*, but pay Tf to the government. In addition, another effect

is: as the domestic price decreases to Pf, the quantity supplied will decrease to QSf, while the

quantity demanded with the decrease in domestic price will increase to QDf, so the quantity

exported will decrease to QXf.

The implementation of export duties is not very profitable for producers, but it is

profitable for consumers, and the government. Figure 7 shows that there is a loss to suppliers

or a producer surplus of A1 + A2 + B1 + B2 + C due to a decrease in domestic prices from Pi

to Pf as a result of the implementation of export duties. Meanwhile, the decline in domestic

prices causes profits for demanders or a consumer surplus of A1 + A2. The government earns

a profit of C because the tax earned is equal to the price of the duty applied, which is Tf, then

multiplied by QXf. Based on this scheme, Home experiences a loss of B1

+ B2, indicating that small countries will experience a loss in efficiency if they want to

implement an export duty policy.

The Home graph is the supply (S) and demand (D) graph of the exporting country,

while the Rest of the world graph is the supply (S*) and demand (D*) graph of the importing

country. Exports will be made by exporting countries if the country has excess supply, on the

other hand, imports will be made by importing countries if the country has excess demand,

because of this condition, international trade is created which is depicted on the trade graph.

Exporters' supply (SX) and importers' demand (DM*) create an equilibrium condition before

the export tax is imposed. When the international trade graph is at equilibrium, on the graph

of the exporter country, the export price before the export tax is imposed is Pi with the

number of exported goods equal to QSi, while on the graph of the importer country, the

export price is Pi the import price is Pi* with the number of imported goods is QMi*, so on

the international trade chart the price at equilibrium is Pi=Pi* with the number of goods equal

to QXi=QMi*.

An export tax is then imposed by the exporting country, which is Tf, so that in the

graph of the exporting country, the price of goods falls to Pf, and the amount of exported

goods falls to QSf, while there is an increase in the amount of demand to QDf. Meanwhile, in

the importer country's graph, the export tax imposed has an impact on increasing the price of

imports to Pf* and the amount of goods demanded falls to QDf*, while the amount of goods

offered rises to QSf*. The impact on the international trade graph after the imposition of the

export tax, with the import price at Pf* and the export price at Pf, the number of goods

exported and imported decreases to QXf=QMf*.

There is a producer surplus of A1+A2+B1+B2+C in the exporting country, in which

there is a consumer surplus of A1+A2, and B1+B2+C is an exporter surplus that occurs in the

private sector. This happens because when export prices increase, producers tend to increase

the amount of exported goods, while importers tend to reduce the amount of imported goods

so that when this situation occurs, the amount of production exceeds consumption, resulting in

losses in the private sector. Meanwhile, the amount of profit obtained by the government is

equal to Tf multiplied by QXf, or equal to the sum of Z and Y. The change in surplus that

occurs in the exporting country can be calculated by (Z+Y)-(B+Y), where Z+Y is the terms-

of-trade of the increase in prices on the importer country chart due to the export tax imposed

by the exporter country, and B+Y is the efficiency loss due to the imposition of export taxes.

Based on the international trade graph, the Z area is larger than the B area, indicating that in

this scenario the imposition of export tax is favorable for the exporting country.

1.5 Regulation of Export Duty on Cocoa Beans

The export duty regulation was issued by the Minister of Finance in 2010 in Minister

of Finance Regulation No. 67/PMK.011/2010 on the Determination of Export Goods Subject

to Export Duty and Export Duty Tariff. Based on the letter of the Minister of Industry No.

01/M-IND/1/2010 dated January 4, 2010, the reason for the government to impose export

duty policy on cocoa beans is to maintain the availability of raw materials and increase the

added value and competitiveness of the domestic cocoa processing industry, so it is necessary

to have a regulation on the application of export duty on export commodities, namely cocoa

beans.

Export goods that are subject to this export duty policy as written in Article 3 of PMK

Number 67/PMK.011/2010 include rattan, leather, wood, palm oil, crude palm oil (CPO) and

its derivatives, and cocoa beans. The export duty rate is determined based on the provisions of

the reference price, which is the international average price of a commodity used for

determining the export duty rate.

1.6 Review of Previous Research

The design of this research also studies and analyzes previous research that has been

conducted by several researchers and can be used as reference material for the current thesis.

Several studies have been conducted regarding the effect of export duty policies on several

agricultural commodities in Indonesia. Several studies on Indonesia's cocoa export scheme

have been conducted, including research conducted by Al Ghozy et al. (2017) using

secondary data and using multiple linear regression method with cocoa production variables,

world cocoa prices, and exchange rates on exports. The results showed that all independent

variables simultaneously had a significant effect on the dependent v a r i a b l e . The

increase and decrease in the volume and value of Indonesian cocoa exports is influenced by

the amount of cocoa production, world cocoa prices, and exchange rates. Similar research was

also conducted by Purnomo et al. (2019) but a different method was used, which was carried

out using secondary data in the form of time series from 1985-2017 from the Central Bureau

of Statistics, Directorate General of Plantations, Department of Agricultural Plantations, and

FAOSTAT When compared with research previous research, the results of research There are

differences, namely there is a significant influence between domestic cocoa production, as

well as world cocoa prices on Indonesian cocoa exports, but domestic cocoa prices, exchange

rates, and international agreements have no significant effect.

to Indonesia's cocoa exports.

There are also studies that review Indonesian cocoa exports using specific variables,

such as those conducted by Rompone (2017) using the gravity model method. The results

showed that non-tariff measures (NTM) in the form of Sanitary and Phytosanitary (SPS) and

Technical Barriers to Trade (TBT) show a positive influence, some of the factors include the

population of the importing country, GDP per capita of the importing country, NTM (SPS and

TBT), the real exchange rate of the exporting country against the importing country, and the

cocoa price of the exporting country.

The existence of export activities cannot be separated from the aspect of export taxes

or export duties applied by the government to several export commodities in Indonesia.

Research conducted by Lestari (2017) on the impact of export taxes on Indonesian

agricultural commodities using secondary data, processed with a computable general

equilibrium comparative static model shows that export tax policies can have a negative

impact on long-term economic growth, but if the export policy imposed is also followed by

increased productivity in the taxed sector, it can have a positive impact on economic growth.

While specifically for Indonesian cocoa commodities, Sinuraya et al. (2017) conducted a

similar study by focusing on the Indonesian cocoa commodity. His research used time series

data from 1989-2014 with the two stages least squares (2SLS) method. The results obtained

were that the policy of eliminating cocoa bean export tax increased producer welfare, but

decreased consumer welfare and total government revenue. If the export tax is above 7%, the

opposite condition occurs. The existence of a cocoa bean import tariff policy below 20% has a

relatively small impact on the welfare of producers and consumers, but increases total

government revenue.

Regarding the factors that influence cocoa exports, there are several studies that review

this matter, including research conducted by The study was conducted by Hanafi (2016) using

the two stage least squares (2SLS) method by utilizing secondary data from the Directorate

General of Plantations (DGC), Central Bureau of Statistics (BPS), Commodity Futures

Trading Supervisory Agency (Bappebti), World Bank, UN Comtrade, Ministry of Trade, and

Ministry of Finance. The results showed that factors affecting exports include real export

duties, world GDP growth, real cocoa bean prices, and domestic cocoa bean sales. Gautama

(2019) also conducted a similar study that examined what factors affect Indonesian cocoa

exports. His research was conducted using secondary data from various sources with details of

the data used having a time span from 2001 to 2017, and analyzed using ordinary least square

(OLS) analysis. The results obtained are that simultaneously the amount of cocoa production,

world cocoa prices, rupiah exchange rates, and export duty policies have a significant effect

on Indonesian cocoa exports, while partially the amount of cocoa production and export duty

policies have a significant positive effect on Indonesian cocoa exports, but the variables of

world cocoa prices and rupiah exchange rates have no significant effect on Indonesian cocoa

exports.

There are studies that discuss what aspects are affected by the implementation of

export duties on Indonesian cocoa commodities, including research by Putri et al. (2014)

which was conducted with a linear regression econometric test with a simultaneous equation

model with the two stage least square (2SLS) method. The results obtained are that export

taxes have an influence on export volumes, domestic availability and domestic prices, and the

data obtained show that export taxes suppress export volumes and increase domestic

availability of cocoa beans.

One of the things that needs to be considered with the application of export duties is

the level of competitiveness of a commodity in the international market, because the

application of export duties can affect the competitiveness of commodities in the international

market. Research conducted by Suryana (2014) was conducted using the RCA method,

spearman rank correlation, gravity model panel data, and trade potential ratio analysis by

utilizing secondary data. The results showed that Indonesia's cocoa trade in the international

market has a high comparative advantage, while some factors that affect the volume of

Indonesian cocoa bean exports include Indonesia's real GDP per capita, the real GDP per

capita of the destination country, Indonesia's economic distance from the destination country,

the rupiah exchange rate against the local currency unit (LCU), and cocoa bean export duties.

Research on cocoa bean export duties has been conducted several times, including

research conducted by Hasanti (2015) with the title Impact of Indonesian Cocoa Export Duty

on Country Market Power in the United States Cocoa Bean Market and Terms of Trade, with

the estimation results showing the market power of Indonesian cocoa bean exports in the

United States market is decreasing, which means Indonesia does not have competitiveness in

the United States market. The estimation of the market power of Indonesian cocoa beans due

to the effect of export duty policy was also carried out on other cocoa bean exporting

countries such as Côte d'Ivoire, Ecuador, Ghana, Dominican Republic, and Nigeria. The result

is that only Côte d'Ivoire and Ghana are positively affected by the implementation of

Indonesia's cocoa bean export duty policy. Other research on duty policy Arfah (2016)

showed that by using the policy analysis matrix (PAM) value and sensitivity analysis, it

indicates that cocoa farming in Central Sulawesi has competitiveness, but is economically

unprofitable, so it is necessary to improve the quality, productivity, and selling price of cocoa

farmers.

Research on the competitiveness of Indonesian cocoa in the international market was

conducted by Manalu (2019) using secondary data from the Directorate General of

Plantations, Central Bureau of Statistics, International Trade Statistics Database, and previous

research which was then analyzed using revealed comparative advantage (RCA). The results

showed that the average RCA value of Indonesian cocoa beans exported to Malaysia was 22

for the period 1991-2017, which means that Indonesia has a high comparative advantage.

Overall, the competitiveness of Indonesian cocoa bean exports in the international market,

especially the destination country Malaysia, has a comparative advantage due to low costs

compared to other destination countries. Analysis of the competitiveness of cocoa beans was

also conducted by Adriansyah (2015) with the results showing that cocoa bean cultivation in

PTPN 12 has competitiveness, but the competitiveness of cocoa beans in PTPN 12 has low

competitiveness due to declining productivity. Government policies in the form of export tax,

income tax, and value-added tax on inputs in the form of fertilizer as a whole do not support

the improvement of cocoa competitiveness in PTPN 12. While factors that sensitively affect

the competitiveness of cocoa bean cultivation in PTPN 12 are cocoa bean prices, and cocoa

bean productivity.

In addition to the export duty policy on cocoa beans that affects the competitiveness of

cocoa beans and their processed products in the international market, it is also necessary to

know about the sustainability of Indonesian cocoa commodities after the implementation of

the export duty policy in 2010. Research conducted by Fairuza (2019) has results in the form

of sensitivity analysis which shows that the indicators that affect the sustainability of

smallholder cocoa plantations in North Luwu Regency are the economic dimension, namely

easy access to markets and price information for farmers, as well as the provision of business

diversification; the social dimension, namely the existence of farmer groups and farmers'

participation in farmer groups; and the environmental dimension, namely the level of fruit rot

disease attack and farmers' understanding of land and environmental management.

Meanwhile, research on cocoa commodity sustainability was also conducted by Fikrunnisa

(2022) based on a cocoa farming survey of the NICHE program in 2017, in three provinces,

namely West Sumatra, Bali, and West Sulawesi. The results showed that in general cocoa

farming is not sustainable based on data from the NICHE program in 2017. The level of

sustainability of cocoa farming is influenced by farmer characteristics, namely farmer age, as

well as cocoa farming characteristics, namely the application of cultivation technology. In

order to maintain the sustainability of cocoa farming, the role of social institutions around

cocoa farming is needed.

2.6 Framework of Thought

An analysis of the implementation of export duties that has been going on for more

than 10 years needs to be done to find out what kind of impact it has on cocoa commodity

exports based on the current conditions of production, exports, and imports of Indonesian

cocoa commodities. The increase in the number of imports of Indonesian cocoa beans needs

to be suppressed by increasing the production and quality of Indonesian cocoa beans, so there

is a need for strategies and policies supporting the export duty policy on cocoa beans.

The initial analysis is descriptive of the general condition of the Indonesian and global

cocoa industry. As a result of this analysis, it can be seen how the condition of the Indonesian

cocoa industry and its competition with other leading exporters. After knowing this, a

competitiveness analysis is carried out both comparatively and competitively. Competitive

analysis utilizes questionnaires distributed to respondents, namely Indonesian cocoa

stakeholders. The questionnaire is also used to find out supporting strategies and policies that

can be done to improve the competitiveness of Indonesian cocoa. The results obtained from

the analysis conducted will be processed to obtain relationships and determine the condition

of Indonesian cocoa competitiveness in the international market as well as strategies and

supporting policies for export duty on cocoa beans, which can later be useful for managerial

implications to improve the competitiveness of Indonesian processed cocoa products. The

framework that will be carried out in this study can be seen in Figure 9.

1.1 Data and Information Collection Techniques

Primary and secondary data in this study were processed using Microsoft Excel and

SPSS. The analysis carried out has stages: Measurement of competitiveness using the

Revealed Comparative Advantage (RCA) method to measure the competitiveness of

Indonesian cocoa comparatively, then continued with the distribution of questionnaires to

stakeholders of Indonesian cocoa commodities to determine the factors that affect the

competitiveness of Indonesian cocoa commodities competitively using Porter's Diamond

Model. The list of research respondents can be seen in Table 3.

Respondents were contacted through various communication platforms, such as

Whatsapp, cell phones, and via e-mail. Then the questionnaire was sent directly to

respondents through the Whatsapp application, and/or e-mail. After the questionnaire is filled

in by the respondents, it will be analyzed and then compiled into managerial implications.

1.2 Data Analysis Method

1.2.1 Revealed Comparative Advantage (RCA)

There are several measurement tools to analyze the competitiveness of an export

commodity in a country or industry, one of which is the Revealed Comparative Advantage

(RCA) which measures the competitiveness of a commodity comparatively. Balassa (1965)

introduced this method of analysis by measuring the export market share of a country with the

same industry as other exporting countries, so that its comparative competitiveness advantage

can be known. RCA can be defined as an index that shows the export advantage of a

commodity in a country against the same export at the regional level with higher commodity

exports (Saragih 2019).

The RCA method is used in this study to determine the comparative competitiveness

of Indonesian cocoa commodities. Suryana (2014) mentioned that the reason for using the

relative export share is the tendency of import data bias because the government often makes

various arrangements in terms of imports so that export data is more suitable to use because it

is independent of various external factors, therefore the comparative advantage of a

commodity can be known clearly based on a predetermined period of time.

The general formulation of RCA is as follows:

1.2.2 Porter's Diamond Model

Porter's Diamond Model is a method to measure the competitiveness of a commodity

in an industry in a particular region. This model was introduced by Michael Porter in 1990 by

involving four main factors, namely condition factors, demand conditions, related and

supporting industries, as well as strategy, structure and competition. In addition to these four

factors, Porter's Diamond Model has two supporting factors, namely opportunity, and

government. All factors in the model are interrelated regarding the potential of an industry to

expand and capture market share (Nurohman 2018). Broadly speaking, the chart of the

Porter's Diamond Model method can be seen in Figure 10.

Porter explains the definition of these factors, including:

1. The condition factor, which is the position of a country in terms of production, such as

adequate human resources or good infrastructure so that it can compete in related

industries. Specifically in the Indonesian cocoa industry, there are many things that can

support domestic cocoa production, including the availability of land, supporting

technology for post-harvest processing, optimal harvesting care, and many more. Some

of these things can potentially boost production and optimize domestic cocoa

production.

2. Demand condition, which is the condition of domestic demand for goods or services of

an industry. Cocoa demand conditions can be influenced by increasing public awareness

of processed cocoa products that can be utilized to make various derivative products.

3. Related and supporting industries, i.e. the presence or absence of industries that supply

the needs of other industries. The existence of industries that support the cocoa industry

can optimize domestic cocoa production, such as the packaging process or the addition

of other materials that can be used as added value.

4. Corporate strategy, structure, and competition, i.e. the conditions under which a country

regulates how a company is formed, managed, and organized, as well as the conditions

of domestic competition.

5. Government, a body that plays a crucial role in regulating an industry. The role in

question can be in the form of providing supporting facilities that facilitate trade access

in the form of policies made.

6. Opportunities, defined by Nurohman (2018) are events that occur outside the control of

the company, industry and government.

There are several studies that have used Porter's Diamond Model to analyze

competitiveness. Nurohman (2018) used the Porter's Diamond Model to analyze the

competitiveness of tea in Indonesia. The study, especially in the analysis using the Porter's

Diamond Model, was conducted comprehensively by involving all six factors in the Porter's

Diamond Model. The model includes the factors of conditions, demand conditions, related

and supporting industries, corporate strategy, structure and competition, government, and

opportunities. The results obtained were in the form of policy implications for Indonesian tea

commodities. Similarly, research conducted by Hanafi (2016), regarding the effect of export

duty policy on the competitiveness of Indonesian cocoa, in his research also used Porter's

Diamond Model to analyze competitiveness competitively by involving the six factors in the

model.

Overall, the use of the Porter's Diamond Model method is carried out using a

questionnaire given to field experts as respondents. Thus the sampling technique used is

purposive sampling, because prospective respondents have been determined and have the

capability and credibility to provide the information needed by researchers to make it easier to

process data.

1.1 Cocoa Commodity Profile

Cacao belongs to the genus Theobroma, which was discovered thousands of years ago

in South America to the east of the Andes mountain region. Theobroma is divided into 27

species, of which Theobroma cacao is the most recognized species worldwide. Strategic areas

for cacao plantations are generally located in countries with latitudes between 10°N and 10°S

of the equator, i.e. areas with suitable weather for cacao tree cultivation. Some of the countries

with the highest cocoa production levels are Ivory Coast, Ghana and Ecuador. Cocoa growing

areas are generally located in lowland rainforests. Aspects of temperature and rainfall

intensity are very important for optimal cocoa tree growth.

The cocoa commodity in Indonesia is one of the most vital commodities, because it is

one of the leading commodities that contributes the highest foreign exchange along with other

leading Indonesian commodities, namely palm oil and rubber. Indonesia's cocoa exports per

year 2021 include cocoa beans and their derivative products worth 1,206,775 USD, not only

that, the number of cocoa farmers in Indonesia has a very high number, which is as many as

1,625,228 cocoa farmers spread throughout Indonesia. The aspect of production and the

number of workers cannot be separated from the aspect of Indonesia's cocoa farming land

area which is also quite extensive. The details of cocoa land area in Indonesia are: 254,907

hectares are immature plants (TBM), 257,287 hectares are immature/damaged plants (TTM),

996,761 hectares are mature plants (TM) (Directorate General of Plantation 2021). Indonesia's

cocoa plantation area is widely distributed in Indonesia, except for DKI Jakarta. The

plantation centers are on the islands of Sulawesi, Sumatra, and Java, with around 60% of

production in the Sulawesi region (Ditjenbun 2020).

1.2 World Cocoa Production

World cocoa bean production can be seen in Table 4. Based on the data, from

2016/2017 to 2020/2021, there is an increase in world cocoa production in almost every year.

Africa's cocoa bean production has always been the highest in each year, so that as of

2020/2021 Africa accounts for 77.30% of the world's cocoa beans, with the country with the

highest production being Côte d'Ivoire with a total production of 2.2 million tons. The Asia

and Oceania region recorded the lowest cocoa bean production among Africa and the

Americas with a production of around 254,000 tons per 2020/2021, or only 4.8% of the total

world cocoa bean production.

Table 4 shows the countries with the largest cocoa bean production levels in the world,

including Cameroon, Ivory Coast, Ghana, Nigeria, Brazil, Ecuador, Indonesia, and Papua

New Guinea. The cocoa production trends of these countries from 2016/2017 to 2020/2021

are quite diverse. Côte d'Ivoire remains the highest producer of cocoa beans in the world,

despite a decline in production. Cameroon has a positive trend, as it has increased its cocoa

bean production every year. The same thing also happens Ecuador, which has experienced an

increase in cocoa bean production almost every year. Unfortunately, Indonesia's cocoa bean

production has declined in quantity every year, even though it has always been the largest

producer in the Asia and Oceania region. The decline in production of Indonesian cocoa beans

can be caused by several things, including a decrease in the area of cocoa plantations in

Indonesia, and the lack of utilization of technology used by farmers for cocoa produced in

smallholder plantations.

1.3 World Cocoa Industry

The demand for cocoa products in the international market can be seen from the

amount of world grinding, because the cocoa industry has a tendency to process cocoa beans

according to the demand for processed cocoa products, such as cocoa paste, butter, powder,

and chocolate. Cocoa bean consumption can be measured by the amount of cocoa bean

grinding (Suryana 2014). Table 5 shows that cumulative world cocoa bean grinding from

2015/2016 to 2020/2021 tends to increase. This also indicates that the demand for processed

cocoa bean products has increased, one of the reasons is that there is a change in the

consumption of processed cocoa products in the international market, especially in developing

countries (Suryana 2014).

Europe is the largest cocoa processing area. From 2015/2016 to 2020/2021, Europe

dominated the cocoa bean processing industry with a percentage of more than 35% each year,

but in terms of growth, the European region tended to fluctuate, as it experienced a decrease

in share of 1.2%, while the African region increased in terms of share with the highest

increase of 1.9% and continued to increase during the period 2015/2016 to 2020/2021. The

Asia and Oceania region also experienced an increase in grinding share of 1.1% but at the end

of the period experienced a decrease in share of 0.9%. The increase and decrease in the share

of grinding in the Asia and Oceania region is in line with the increase and decrease in the

grinding of cocoa beans in Indonesia, because Indonesia is also one of the largest cocoa bean

processing countries in Asia.

Processing of cocoa beans is mostly done in cocoa bean importing countries that are

close to the main cocoa consuming countries in Europe and North America (Suryana 2014).

As such, the Netherlands is the main cocoa processing country in Europe as it continues to see

an increase in the number of cocoa bean processors. Currently, the country that is the largest

cocoa bean processor in the world based on the amount of cocoa beans processed is Ivory

Coast. As for the Asia and Oceania region, Malaysia continues to increase the amount of

cocoa beans processed each year.

1.4 World Cocoa Trade

Based on Figure 11, world cocoa bean exports in terms of quantity are dominated by

Asia and Oceania and Africa. The African region still dominates cocoa bean exports in terms

of quantity, because there are several largest cocoa bean producers in the region, including

Côte d'Ivoire, Nigeria, and Ghana. Meanwhile, the Asia and Oceania region experienced a

decline in the quantity of cocoa bean exports in the period 2002 to 2021. After the

implementation of the export duty policy on cocoa beans, Indonesia experienced a decline in

cocoa bean exports, as the export scheme shifted focus to cocoa bean derivative products. This

resulted in a decrease in the number of cocoa bean exports in the Asia and Oceania region, as

Indonesia is one of the largest cocoa bean producers in the world. An increase in the number

of cocoa bean exports in the Asia and Oceania region occurred in 2019 and 2020, which

occurred because Papua New Guinea began exporting cocoa beans, some of the largest

importers were Malaysia and the United States.

Figure 12 shows that cocoa bean importers are still dominated by countries from the

European region. This indicates that most of the cocoa bean processing industry takes place in

the European region, where countries such as the Netherlands and Germany are the largest

importers of cocoa beans. In Asia, Malaysia is the largest importer of cocoa beans, while in

the Americas, the United States is currently the largest importer of cocoa beans in the world.

However, in Indonesia, the export duty policy imposed by the Indonesian government is

aimed at focusing on the export of cocoa derivative products, but at the same time the import

of Indonesian cocoa beans is also quite high, which is quite questionable because Indonesia is

one of the largest cocoa bean producers in the world.

1.5 Indonesia's Cocoa Supply Chain

One aspect that is also important in the Indonesian cocoa industry is supply chain

management. The implementation of supply chain management aims to fulfill consumer

demand for agricultural products, either in the form of raw materials or fresh products ready

for consumption, by paying attention to several processes in it, namely: production,

distribution, and marketing, where it is measured by supply chain performance, which is the

integration of supply chain activities to improve relationships to gain competitive advantage

(Shoffiyati et al. 2019). Indonesia's cocoa supply chain is currently faced with various

constraints that can hamper production and reduce the quality of Indonesian cocoa, which can

also affect its competitiveness in the international market. Therefore, it is very important to

improve various sectors of the Indonesian cocoa supply chain to improve the quality, increase

production, and competitiveness of Indonesian cocoa in the international market.

Based on Figure 13, according to (Aini et al. 2014), the components of the Indonesian

cocoa supply chain consist of: farmers, intermediary traders, wholesalers, and industry which

is divided into two, namely domestic and foreign industries. In addition, the cocoa supply

chain has several risk factors in the supply chain, including: transportation, environment,

supply, price, production, and quality. Aini et al. (2014) also stated that the highest priority

risk factor faced by Indonesian cocoa farmers is production risk, the highest risk factor faced

by intermediary traders is price risk, while wholesalers have the highest risk in the cocoa

supply factor, and the highest risk faced by domestic and foreign industries is the quality

factor of cocoa produced.

•

Indonesian cocoa farmers still experience obstacles in managing cocoa due to limited

processing technology, lack of counseling on good agricultural practices (GAP) and good

handling practices (GHP), control of cocoa plant pests and diseases, provision of quality

fertilizers, and several other factors. This causes the quantity and quality of cocoa produced

by Indonesia to not be fully maximized.

•

Based on the Indonesian cocoa supply chain, intermediary traders have a role as

intermediaries between farmers and traders who have a wider distribution scope, so price is an

aspect that needs to be considered, because the price of Indonesian cocoa is still more volatile

when compared to other cocoa supply chains compared to other agricultural commodities.

According to Zakiah (2022) the Indonesian cocoa price factor has a significant influence on the value

of Indonesian cocoa exports, so to increase the value of Indonesian cocoa commodities in the

international market, price stabilization is needed.

•

Wholesalers are highly dependent on the volume of supply and the quality of cocoa produced,

because before being distributed to domestic and foreign industries, the quality and quantity

of cocoa produced must match the demand of domestic consumers or export markets, such as

the preference of cocoa product consumers in Europe for fermented cocoa beans, as opposed

to the US market which has a preference for unfermented cocoa beans (Ariningsih et al.

2019).

•

The harvest to post-harvest process of Indonesian cocoa is quite long, so it is expected that the

quality of cocoa produced is of good quality and meets the desires of national and

international markets. The synergy between Indonesia's upstream and downstream cocoa

industries needs to be improved in order to produce higher quantity and better quality cocoa

products.

5.1 Analysis of Indonesia's Cocoa Competitiveness in the World

Based on the export duty policy issued by the Indonesian government in 2010, in

which cocoa beans are one of the commodities subject to the policy, the aim is to increase the

production of cocoa bean derivatives. This is in accordance with the letter of the Minister of

Industry Number 01/M-IND/1/2010, which is to maintain the availability of raw materials and

increase the added value and competitiveness of the domestic cocoa processing industry,

therefore it is necessary to analyze the competitiveness of Indonesian cocoa commodities,

which include cocoa beans, cocoa butter, cocoa paste, and cocoa powder.

5.1.1 Analysis of Indonesian Cocoa Competitiveness Based on Revealed Comparative

Advantage (RCA) Value

The condition of Indonesian cocoa exports in the international market can be seen

through the comparative advantage of Indonesian cocoa commodities. This study analyzes the

competitiveness of Indonesian cocoa beans and cocoa derivative products with other cocoa

producing countries comparatively in the international market using the RCA method.

RCA is used to measure a country's export market share in the same industry as other

exporting countries, so the RCA method is often used to measure comparative advantage

(Serin and Civan 2008). Therefore, in other words, the RCA method is used to determine how

much competitiveness a country has compared to other countries in the same export

commodity industry, in this case the cocoa industry. This competitiveness analysis compares

the RCA value of Indonesian cocoa beans and processed products with those of other cocoa

bean and processed product exporting countries. The magnitude of the RCA value indicates

how much competitiveness the country has in the export market in the same industry.

Competitiveness of Indonesian Cocoa Beans in the World

Côte d'Ivoire, Ghana, Ecuador, Nigeria and the Dominican Republic are currently the

largest producers and importers of cocoa beans in the world, while Indonesia has experienced

a decline in cocoa bean production and exports, especially since the implementation of export

duties in 2010. A comparison of Indonesia's RCA value with other cocoa bean exporting

countries in the world can be seen in Table 6. Cocoa bean producing countries have a

comparative advantage in the international market based on RCA values greater than one. The

highest cocoa bean RCA value is currently owned by Côte d'Ivoire with an average RCA

value of 507.67; followed by Ghana with an average cocoa bean RCA value of 409.74; then

there is Cameroon with an average cocoa bean RCA value of 270.70; then there is Ecuador

with an average cocoa bean RCA value of 44.49; and there is the Dominican Republic with an

average cocoa bean RCA value of 36.75; while Indonesia has an average cocoa bean RCA

value of 7.76. These average scores indicate that, on average, these countries are competitive

in the cocoa bean export market, with Côte d'Ivoire being the most competitive in the

international market for cocoa bean exports.

The results of the estimation of the competitiveness of Indonesian cocoa beans in the

international market from 2002 to 2021 show that Indonesia's competitiveness has decreased

since the implementation of the export duty policy in 2010 on cocoa beans. This is evidenced

by the RCA value which since 2010 has experienced a sharp decline, from 13.74 to 5.70 in

the following year, which then continues to decline until 2021. Trend analysis in Figure 14

shows the R value2 of 0.9037 which indicates that the RCA value estimation graph of

Indonesian cocoa beans can explain the relationship between variables X and Y by 90.37%.

Based on this, Indonesian cocoa beans are no longer competitive in the export market,

however, improvements in the quality of Indonesian cocoa beans can still be made to increase

the competitiveness of cocoa beans and their processed products.

In terms of quantity, Indonesia's cocoa bean exports have decreased since 2010. The

quantity of Indonesian cocoa bean exports in 2010 amounted to 432,427 tons and dropped to

210,067 tons in 2011. Another sharp decline occurred in 2014, where the quantity of cocoa

bean exports dropped to

63,334 tons from 188,420 tons in 2013. Overall, the 2010 export duty policy has resulted in a

decline in the competitiveness of Indonesia's cocoa beans, making it lag behind other cocoa

bean exporters in the world. Compared to other leading cocoa bean exporting countries, the

competitiveness of Indonesian cocoa beans in the international market is still far behind. The

high competitiveness of leading cocoa bean exporting countries such as Côte d'Ivoire and

Ghana can be attributed to the quality of exported cocoa beans that have gone through a

fermentation process, resulting in the high export value of cocoa beans from these countries

(Ragimun 2012).

Competitiveness of Indonesian Cocoa Paste in the World

Indonesia is currently one of the top five cocoa paste exporting countries. Table 7

shows the competitiveness of Indonesian cocoa paste in the international market and how it

compares to other cocoa paste exporting countries. Indonesia has experienced an increase in

cocoa paste competitiveness since the introduction of export duty in 2010. This is evidenced

by the estimated RCA value that has increased since 2010, although it has decreased from

2017 to 2021, but with a higher RCA value when compared to Indonesia's cocoa paste exports

before the implementation of export duties. The highest cocoa paste RCA value is currently

still owned by Côte d'Ivoire with a value of 329.96, followed by Ghana with an average cocoa

paste RCA value of 102.89, Cameroon with an average cocoa paste RCA value of 53.92, the

Netherlands with an average cocoa paste RCA value of 6.63, and Indonesia with an average

cocoa paste RCA value of 36.40. These average values indicate that, on average, these

countries are competitive in the cocoa paste export market, with Côte d'Ivoire being the most

competitive in the international market for cocoa paste exports.

The increase in competitiveness of Indonesian cocoa paste in the international market

was quite high in 2011, with a cocoa paste RCA value of 6.46. The RCA value of Indonesian

cocoa paste continued to increase until the highest value reached 9.79 in 2015. The high RCA

value of Indonesian cocoa paste in the international market is in line with the increase in the

quantity of Indonesian cocoa paste exports. The highest export of Indonesian cocoa paste was

113,705 tons in 2015, making it the highest quantity of Indonesian cocoa paste exports since

2002. The decline in the competitiveness value of cocoa paste also occurred along with the

decline in the export quantity of Indonesian cocoa paste from 2016 to 2021. 2Trend analysis in

Figure 15 shows an R-value of 0.8435 which is indicates that the graph of the estimated

RCA value of Indonesian cocoa paste can explain the relationship between variables X and Y

by 84.35%. Based on this, Indonesian cocoa paste is experiencing a decline in

competitiveness in the international market. However, since cocoa paste is a processed

product from cocoa beans that is currently being prioritized in the export market, improving

the quality and quantity to suit the needs and preferences of the export market makes

Indonesian cocoa paste still quite potential to compete in the international market.

The Netherlands and Malaysia are some of the largest importer countries of cocoa

beans, which means that both countries have a growing cocoa bean processing industry,

especially the Netherlands which has the largest grinding industry in the world, controlling as

much as one-third of grinding in Europe (Suryana 2014). Dutch and Malaysian cocoa paste

exports have experienced a decline in competitiveness since 2010 when an export duty policy

was imposed on Indonesian cocoa beans, which resulted in a decline in Indonesian cocoa bean

exports. As a result, the quantity of cocoa bean imports from the Netherlands and Malaysia

also decreased, as Indonesia is one of the main cocoa bean exporters for the Netherlands and

Malaysia. Indirectly, the decrease in cocoa bean imports also resulted in a decrease in cocoa

paste exports due to the reduction in raw materials to be processed into cocoa bean derivative

products.

Competitiveness of Indonesian Cocoa Butter in the World

Côte d'Ivoire, Ghana and Indonesia are the top three cocoa butter exporting countries,

and for Indonesia, cocoa butter is the second largest exported cocoa product after cocoa

beans. Table 8 shows the competitiveness of Indonesian cocoa butter compared to other cocoa

butter exporting countries. The highest cocoa butter RCA value currently belongs to Côte

d'Ivoire with a value of 109.42, followed by Ghana with an average cocoa butter RCA value

of 47.95, then Indonesia with an average cocoa butter RCA value of 10.12, then Cameroon

with an average cocoa butter RCA value of 10.02, and the Netherlands with an average cocoa

butter RCA value of 9.49. These average values indicate that, on average, these countries are

competitive in the cocoa butter export market, with Ghana being the most competitive in the

international market for cocoa butter exports.

Since the implementation of the export duty policy on cocoa beans, the

competitiveness of Indonesian cocoa butter has increased, even becoming one of the most

competitive compared to other cocoa butter exporters. Indonesia's cocoa butter

competitiveness was the highest at 16.16 in 2018, which means it is only behind Côte d'Ivoire

and Ghana in terms of cocoa butter competitiveness in the international market. As the

world's major importers of cocoa beans, Dutch and Malaysian cocoa butter has a fairly good

competitiveness value in the international market, although it has decreased since the

imposition of export duties on Indonesian cocoa beans, which has caused the Dutch and

Malaysian cocoa industry inputs to decline. 2Trend analysis in Figure 16 shows an R value of

0.8097 which indicates that the graph of the estimated RCA value of Indonesian cocoa beans

can explain the relationship between variables X and Y by 80.97%. Based on this, cocoa

butter products Indonesia can still be developed to be able to compete in the international

market because it has the potential for competitiveness that continues to grow.

Competitiveness of Indonesian Cocoa Powder in the World

Table 9 shows the competitiveness value of Indonesian cocoa powder compared to

that of other cocoa powder exporting countries. Indonesia is one of the main exporters of

cocoa powder with an average competitiveness score of 5.26; while the cocoa powder

exporting country with the highest competitiveness score is currently Ghana with an average

competitiveness score of 11.99. Although Ghana has not been exporting cocoa powder for a

long time, the export trend of the cocoa bean derivative product is getting better every year

when viewed from its competitiveness in the international market. In addition, the

Netherlands and Malaysia are still the main exporters of processed cocoa bean products. The

Netherlands with an average competitiveness score of 10.52 is the highest in Europe and the

second highest after Ghana. While Malaysia with an average competitiveness score of 8.67 is

the third highest after the Netherlands and Ghana, and indicates that cocoa powder is the

highest processed cocoa bean product exported by Malaysia.

The competitiveness of Indonesian cocoa powder in the international market continues

to increase after the implementation of the export duty policy imposed on Indonesian cocoa

beans. Trend analysis in Figure 17 shows an R value2 of 0.9436 which indicates that the graph

of the estimated RCA value of Indonesian cocoa powder can explain the relationship between

variables X and Y by 94.36%. Based on this, the trend of Indonesian cocoa powder products

can still continue to increase in the international market. The potential of Indonesian cocoa

powder can continue to be improved and developed.

Based on the quantity of Indonesia's cocoa powder exports, there is a fairly consistent

increase each year, even as of 2021, the highest export quantity is 119,998 tons in 2021. The

average value indicates that, on average, these countries are competitive in the cocoa powder

export market, with Ghana being the most competitive in the international market for cocoa

powder exports.

Based on the competitiveness value in the international market, Côte d'Ivoire has the

highest competitiveness value compared to other cocoa commodity exporters, except for cocoa

powder products. Based on this competitiveness value, the high export of cocoa beans and

processed products indicates that Côte d'Ivoire is not only a leading producer of cocoa beans,

but also has a growing cocoa bean processing industry, in line with the high export of

processed cocoa bean products both in terms of quantity and value in the international market.

The implementation of the export duty policy imposed on Indonesian cocoa beans

based on the value of competitiveness and quantity of exports has increased, this is in line with

the purpose of the export duty policy, which is to change the export scheme of Indonesian

cocoa commodities which previously focused on exporting cocoa beans, now focused on

exporting processed cocoa bean products. Based on this, the increase in the export value and

quantity of processed cocoa bean products and the decrease in the quantity and value of cocoa

bean exports make Indonesia need to increase processed cocoa bean products to increase

exports of these processed products so that they can remain competitive in the international

market, and increase Indonesia's foreign exchange earnings.

Competitiveness of Indonesian Cocoa Beans in Export Destination Countries

Based on Table 10, the competitiveness of Indonesian cocoa beans in the international

market has decreased since the implementation of the export duty policy in 2010. During the

period 2002 to 2010 Indonesian cocoa beans in the international market had a comparative

advantage based on the value of competitiveness, because 9 out of 10 export destination

countries, Indonesian cocoa beans had very high competitiveness indicated by an RCA value

greater than 1. In fact, Indonesian cocoa bean exports to Brazil had the highest average RCA

value of 91.02 before the implementation of the export duty policy in 2010, but after the

implementation of the policy, the competitiveness of Indonesian cocoa beans in Brazil has

decreased very sharply with an average RCA value of 1.07 since the implementation of the

export duty policy. This happened not only to cocoa bean exports in Brazil, but also in other

major cocoa bean export destinations. Now, the destination countries for Indonesian cocoa

bean exports that still have competitiveness include Malaysia (3.17), Singapore (2.93), Brazil

(1.70), Canada (3.62), and China (4.57).

Prior to the introduction of the export duty policy in 2010, in the period 2002 to 2010

Indonesian cocoa beans had the greatest competitiveness in Brazil. In 2002, the RCA value

was estimated at 172.13, which not only indicated that Indonesia's competitiveness was high

but also meant that Indonesia controlled the market share of cocoa beans in Brazil. The same

thing also happened. In 2006, the competitiveness of Indonesian cocoa beans in Brazil was

very high, with an RCA value of 133.20, which was in line with the export value of

Indonesian cocoa beans in 2002 and 2006 of USD 100,106,000 and USD 83,772,000,

respectively. However, after the implementation of the export duty policy in 2010, the share

of international cocoa beans is now dominated by Côte d'Ivoire, Ghana and Ecuador as the

main cocoa bean exporters.

Along with the implementation of the export duty policy in 2010, the competitiveness

of Indonesian cocoa beans in export destination countries has decreased significantly. During

the period 2010-2021, Indonesian cocoa beans no longer dominate the international market, as

evidenced by several years of the RCA value of Indonesian cocoa beans being below 1, which

indicates that the Indonesian cocoa bean commodity no longer has a comparative advantage in

export destination countries, but it can also be indicated that Indonesia is less competitive

with other leading cocoa bean exporting countries, such as Ivory Coast and Ghana. The

estimated RCA value of Indonesian cocoa beans in export destination countries during the

period 2010-2021 is the highest, including Canada in 2011 with an RCA value of 33.68,

Brazil in 2012 with an RCA value of 18.72, China in 2012 at 14.62. The RCA value, when

compared to the RCA value of cocoa beans before the implementation of the export duty

policy, shows a decrease in the competitiveness of Indonesian cocoa beans in the international

market.

Competitiveness of Indonesian Cocoa Butter in Export Destination Countries

Indonesian cocoa butter exports have a fairly good comparative advantage, because

the RCA value of Indonesian cocoa butter in the period 2002-2021 can almost always be

confirmed to have a comparative advantage in export destination countries, indicated by an

RCA value greater than 1. Table 11 shows the RCA value of Indonesian cocoa butter in

export destination countries.

Before the implementation of the export duty policy, Indonesian cocoa butter exports

were not very competitive, although they had comparative advantages in export destination

countries, except in major importing countries such as the United States, Estonia, and France.

Indonesian cocoa butter exports in the period 2002-2010 in these three countries were very

high with an average RCA value of 26.56 (United States), 181.87 (Estonia), and 67.59

(France). Estonia is the main importer of Indonesian cocoa butter, with the highest estimated

RCA value of 625.89 in 2004, this occurred because Indonesia controlled 61.34% of the

world's cocoa butter export share to Estonia, which is in line with the high competitiveness of

Indonesian cocoa butter in Estonia. Since the implementation of the export duty policy in

2010, the average RCA value of Indonesian cocoa butter for the destination country Estonia

has decreased from 181.87 to 161.18, but when viewed from the estimated RCA value per

year, Indonesian cocoa butter exports to Estonia have a more consistent trend when compared

to the RCA value before the implementation of the export duty policy, where Indonesia's

RCA value was not very consistent because it had experienced a fairly sharp decline in

several years.

France is one of the largest importers of cocoa butter in the world. France is also the

main destination country for Indonesian cocoa butter exports with an average RCA value of

46.72. Before the implementation of the export duty policy, the average RCA value of

Indonesian cocoa butter in France was 67.59, with the highest RCA value occurring in 2008

at 94.50, indicating that Indonesia was one of the countries that controlled the share of cocoa

butter in France. However, since the implementation of the export duty policy in 2010, there

has been a decline in Indonesia's RCA value in France, with an average RCA value of 29.65.

This can occur because France is currently one of the largest chocolate and confectionery

processing countries in Europe, causing higher demand for semi-finished cocoa products,

resulting in higher imports by France of butter products from other cocoa butter exporting

countries. This condition causes Indonesia to have to compete harder with other cocoa butter

exporting countries.

Overall, from 2002 to 2021, Indonesia's cocoa butter exports in the main export

destination countries experienced a fairly high increase in competitiveness. Based on the

average estimated RCA value, 8 out of 10 main export destination countries for Indonesian

cocoa butter have experienced an increase in competitiveness, especially since the

implementation of the export duty policy on Indonesian cocoa bean commodities has caused

exports of cocoa bean derivative products to increase. The estimated RCA value of

Indonesian cocoa butter in export destination countries since the implementation of the export

duty policy has a good trend because it is quite consistent despite the decrease and increase in

RCA value in some years.

Competitiveness of Indonesian Cocoa Powder in Export Destination Countries

The competitiveness of Indonesian cocoa butter in export destination countries can be

said to be quite good. Based on the estimated RCA value, Indonesian cocoa butter almost

always has a competitive advantage in export destination countries in the period 2002-2021.

The estimated RCA value of Indonesian cocoa butter in export destination countries is shown

in Table 12.

In the period 2002 to 2021, the destination country for Indonesian cocoa powder

exports with the highest competitiveness was Brazil with an average estimated RCA value of

33.52. The highest competitiveness of Indonesian cocoa powder to Brazil occurred in 2003

with an estimated RCA value of 137.92, this can occur because in that year Indonesian cocoa

powder exports to Brazil in quantity reached 1,263 tons, or covered around 5.87% of the total

Brazilian cocoa powder imports. In addition, during the same period, South Africa was the

destination country for Indonesian cocoa powder exports with the highest competitiveness,

with an average estimated RCA value of 31.91, the high value of competitiveness of

Indonesian cocoa powder exports in South Africa could be due to an increase in disposable

income and the growth of South African middle class consumption (Suryana 2014). This may

also indicate that the cocoa processing industry in South Africa is growing along with the

development of the chocolate retail market in South Africa.

Indonesian cocoa powder exports experienced an increase in competitiveness from

before and after the implementation of the export duty policy on cocoa beans in 2010 in

several export destination countries. The competitiveness of Indonesian cocoa powder exports

to India has increased quite high. Before the implementation of the export duty policy, the

estimated RCA value of Indonesian cocoa powder in India was 10.51, while after the

implementation of the export duty policy the estimated RCA value of Indonesian cocoa

powder in India became 17.50. In addition to India, Indonesian cocoa powder export

destination countries such as Malaysia, Thailand, and Australia also experienced an increase

in competitiveness before and after the implementation of the export duty policy. The

competitiveness of Indonesian cocoa powder in Malaysia increased from 6.00 to 10.46.

Indonesia's cocoa powder competitiveness in Thailand increased from 2.25 to 9.63, while

Indonesia's cocoa powder competitiveness in Australia increased from 3.59 to 9.36. The

decline in the competitiveness of Indonesian cocoa powder also occurred in export destination

countries, such as Brazil and South Africa, although when viewed from the estimated RCA

value of Indonesian cocoa powder in these countries is still the highest at this time when

compared to other cocoa powder export destination countries, this can occur because Brazil

and South Africa are cocoa processing industry countries that are currently experiencing

development, thus requiring exporters of processed cocoa products with superior quality. The

existence of this makes Indonesia have to compete with other cocoa powder exporters by

improving the quality of processed cocoa product exports. However, with the continued

increase in competitiveness in several destination countries for Indonesian cocoa powder

exports in the period before and after the implementation of the export duty policy, it can be

said that the policy was able to increase competitiveness competitiveness of processed cocoa

bean commodities, in this case cocoa powder.

Competitiveness of Indonesian Cocoa Paste in Export Destination Countries

The competitiveness of Indonesian cocoa paste in export destination countries

experienced a good trend because it increased in the period 2002 to 2021, both before and

after the implementation of the export duty policy on cocoa beans in 2010. The

competitiveness of cocoa paste in export destination countries can be seen in Table 13.

Based on Table 13, Brazil is the destination country for cocoa paste exports with the

highest competitiveness with an average estimated RCA value of 45.17 from 2002 to 2021.

The highest estimated RCA value of Indonesian cocoa paste in Brazil occurred in 2020, which

was 95.22. This again proves that Brazil is a country with a growing chocolate industry to

date, because it requires raw materials for semi-finished processed cocoa products to support

the needs of the chocolate industry in Brazil. The competitiveness of Indonesian cocoa paste

is also high in the United States with an average RCA estimated value of 29.88. The

competitiveness of Indonesian cocoa paste in the United States was highest in 2012 with an

estimated RCA value of 182.51. Indonesia accounted for about 22% of total US cocoa paste

imports in 2012. The US chocolate industry is one of the largest in the world. There are

approximately 1,600 chocolate product processing facilities spread across all 50 states in the

United States. By 2021, total sales of US chocolate products will increase by 11% compared

to 2020 (NCA 2022).

The competitiveness of Indonesian cocoa paste in export destination countries

experienced a very high increase after the implementation of the export duty policy in 2010,

because since then Indonesian cocoa paste products have always been competitive in the main

export destination countries, except in Singapore and Japan. In addition, 8 of the 10 main

export destinations for Indonesian cocoa paste experienced an increase in competitiveness

before and after the export duty policy. The highest increase in competitiveness occurred in

the United States and Brazil. Not only that, since the implementation of the export duty policy

in 2010, the estimated RCA value of Indonesian cocoa paste has a positive trend and is much

higher than the trend before the implementation of the export duty policy. This indicates that

the export duty policy for cocoa paste products is able to increase the competitiveness of

Indonesian cocoa paste in export destination countries so that it is very profitable for the

export of Indonesian cocoa bean processed products.

Correlation Analysis of Competitiveness among World Cocoa Exporting Countries

The calculation of the RCA value of cocoa bean and processed product exporter

countries is then used to analyze the level of competition of cocoa bean and processed product

exporter countries. According to Suryana (2014), the strength of competition is measured by

looking at the correlation value between two cocoa bean exporting countries and their

processed products using the Spearman Rank correlation. Therefore, Rank Spearman

correlation analysis is used to see the level of competition between cocoa exporting countries.

Correlation of Cocoa Bean Competitiveness

Based on Appendix 1, Indonesia has the highest positive correlation of 0.718 with

Ghana and is significant because the p-value is smaller than the 1% real level. This indicates

that the level of competition between Indonesia and Ghana is quite high in the international

market. The positive correlation between Indonesia and Ghana indicates that the correlation

between the two countries in terms of cocoa bean competitiveness in the international market

is unidirectional, i.e. if Indonesia's cocoa bean exports increase, Ghana's exports will also

increase, and vice versa. Therefore, the relationship between the two countries is competitive.

This is also due to the similarity of the main destination countries for Indonesian and

Ghanaian cocoa bean exports, namely Malaysia, the Netherlands and the United States.

Based on Table 14, Indonesia's market share for cocoa beans in the international

market during the period 2002 to 2010 ranged from 13% to 17%, while Ghana held a market

share of 13% to 23% during the same period. However, since the implementation of the

export duty policy in 2010, in 2011 the market share of Indonesian cocoa beans decreased by

more than 50%. This condition was utilized by Ghana to increase cocoa bean exports,

therefore, since 2011 Ghana's cocoa bean market share in the international market has

increased in 2011 to 2018 before decreasing again in 2019.

The cocoa bean competitiveness correlation of Côte d'Ivoire has a negative value of -

0.651 with Nigeria, and is significant because the p-value is less than the 1% real level. The

negative correlation between the two countries indicates that the relationship between the two

countries is negative complementary or complementary. According to Suryana (2014), the

relationship can be interpreted that at a certain period of time if Ivory Coast's cocoa bean

exports have increased, Nigeria's cocoa bean exports have decreased, and vice versa. This can

be seen from the market shares of Côte d'Ivoire and Nigeria in Table 14, where when Côte

d'Ivoire experiences a decrease in the amount of cocoa bean exports, Nigeria is experiencing

an increase in cocoa bean exports, and vice versa.

Cocoa Butter Competitiveness Correlation

Based on Appendix 2, Indonesia has a positive correlation of 0.766 with Germany and

is significant because the p-value is smaller than the 1% real level. This indicates that there is

competition between Indonesia and Germany for the competitiveness of cocoa butter in the

international market. In addition, the result also means that if Indonesia's cocoa butter exports

increase, Germany's cocoa butter exports also increase, and vice versa.

Table 15 shows the market share of Indonesian cocoa butter with other leading

exporters of cocoa butter. It can be seen that in the period 2002 to 2021, Indonesia's cocoa

butter market share tended to increase, especially after the implementation of the export duty

policy on cocoa beans in 2010 which caused exports of cocoa bean derivative products to

increase. Germany also experienced an increase in its share of the cocoa butter market,

because during the same period of time, Germany's cocoa butter market share also tended to

increase, similar to Indonesia. Therefore, the correlation between the competitiveness of

Indonesian and German cocoa butter is competitive, because one of the main export

destinations for Indonesian and German cocoa butter is the Netherlands, so competition

between Indonesia and Germany in controlling the cocoa butter market share in the

Netherlands is quite high.

In addition, Indonesia has a negative correlation of -0.779 with the United States, and

is significant. This means that the correlation of cocoa butter competitiveness between

Indonesia and the United States is complementary. If Indonesia's cocoa butter exports

increase, then US exports decrease, and vice versa.

Cocoa Powder Competitiveness Correlation

Based on Appendix 3, Indonesia's cocoa powder competitiveness has a positive

correlation with Germany (0.611), Spain (0.526), Singapore (0.535) and the United States

(0.605), the correlation is significant. This indicates that there is competition between

Indonesia and Germany, Spain, Singapore and the United States for cocoa powder

competitiveness in the international market. In addition, the result also means that if

Indonesia's cocoa powder exports increase, the cocoa butter exports of Germany, Spain,

Singapore, and the United States have also increased, and vice versa.

The correlation between Indonesia and Germany, Spain, Singapore, and the United

States can be shown from the market share of cocoa powder from 2002 to 2021 in Table 16,

where when Indonesia's cocoa powder exports increased, these competitor countries also

experienced an increase in cocoa butter exports. In addition, Indonesia's cocoa powder

exports are mainly destined to the United States and Brazil, as well as several countries in

Europe, such as Russia, Belgium and the Netherlands, which are also the main cocoa powder

export destinations for Germany and Spain. Meanwhile, the United States' cocoa powder

exports are more focused on North American and South American countries.

Indonesia also has a correlation of cocoa powder competitiveness with the Netherlands

(-0.704) and Brazil (-0.530), where the correlation is significant. The cocoa powder

competitiveness relationship between Indonesia and the Netherlands and Brazil is

complementary, as Indonesia's correlation with the two countries is negative, meaning that if

Indonesia's cocoa powder exports increase, the Netherlands and Brazil's cocoa powder exports

decrease, and vice versa. Dutch cocoa powder is mainly exported to European countries, such

as Germany, France, Russia and Italy, some of which are also major destinations for

Indonesian cocoa powder exports. Meanwhile, Brazil focuses its cocoa powder exports on

Canada, the United States, and South American countries, as well as exports to Europe like

the Netherlands.

Cocoa Paste Competitiveness Correlation

Based on Appendix 4, Indonesia's cocoa paste competitiveness has a positive

correlation with Germany (0.741) and Belgium (0.656). The correlation of Indonesia's cocoa

paste competitiveness with these two countries is significant. This indicates that there is

competition between Indonesia and Germany and Belgium for cocoa paste competitiveness in

the international market. A positive correlation means that the relationship between Indonesia

and Germany and Belgium is unidirectional, in which case if Indonesian cocoa paste exports

increase, then German and Belgian cocoa paste exports also increase.

Table 17 shows that Indonesia's cocoa paste market share in the period 2002 to 2021

tends to increase, especially since the implementation of the export duty policy in 2010.

Indonesia's cocoa paste market share in 2015 was the highest in the period 2002 to 2021, and

occurred at the time when the export duty policy was implemented, which amounted to

12.59%. Germany and Belgium's cocoa paste market share in the same period also tended to

increase, indicating that even though Indonesia exports more cocoa paste in Asia, while

Germany and Belgium export more in the European market, the three countries still compete

with each other for cocoa paste market share, especially in one of the main cocoa paste export

destinations, the United States, which is one of the world's major importers of cocoa paste.

Indonesia's cocoa paste competitiveness also has a negative correlation with the

Netherlands (-0.459) and Cameroon (-0.826). The correlation of Indonesia's cocoa paste

competitiveness with these two countries is significant. The negative value of the correlation

between Indonesia and the Netherlands and Cameroon indicates that the competitiveness

relationship is complementary.

5.1.2 Analysis of Indonesian Cocoa Competitiveness in the International Market Based on

Porter's Diamond Model Method

The method to analyze competitiveness in this study is Porter's Diamond Model.

Porter's Diamond Model analysis is conducted to find out what factors have the most

influence on the competitiveness of Indonesian cocoa in the international market and based on

these factors can be known how steps need to be taken to improve the competitiveness of

Indonesian cocoa products in the international market. There are six factors in the Porter's

Diamond Model, including factor conditions, demand conditions, related and supporting

industries, strategy, structure, and competition, government factors, and opportunity factors.

Determining the factors that have the greatest influence used the opinions of seven

expert respondents, then the assessment was carried out using a Likert scale of 1-5, with

information: 1 (not very influential); 2 (not influential); 3 (neutral); 4 (influential); 5 (very

influential). Respondents in this study included experts in academia, government, and

businesses. The scores of the Porter's Diamond Model aspects can be seen in Table 18.

Based on the analysis in Table 18, the aspects with the highest scores are in the

demand factor, strategy factor, company, and competition, as well as the opportunity factor,

namely in the sub-factors of the amount of export demand for cocoa and its processed

products, domestic industry improvements, such as the use of commodity treatment

technology, post-harvest handling, and the quality of human resources, as well as international

market demand, each with an average score of 5.00.

The condition factor has several subfactors, namely land area, availability of labor,

technology used, and the use of pesticides and selection of fertilizer use. Based on the

research results, the land area subfactor has a score of 4.14. Respondents revealed that land

area can increase the competitiveness of Indonesian cocoa, because: one of the factors if the

control of land area is greater and production can be maximized, it will greatly help the

quantity of domestic production, land area is also one of the capital in the production of cocoa

beans and its processing. This is in accordance with Saputra (2015), Izzah (2016), Ananda et

al. (2019), Saputro and Fidayani (2020) and Suherah (2021) which state that land area is an

aspect that affects cocoa production, the larger the land area, the more cocoa production will

be. However, the land area subfactor can also be an obstacle to Indonesia's cocoa

competitiveness, because when the land area is directed to be expanded, it will increase the

cost of production factors. Because of this, alternative solutions that can be done are

rejuvenation, rehabilitation, and intensification programs.

The labor availability subfactor has a score of 4.43. Respondents revealed that the

labor subfactor is able to increase the competitiveness of Indonesian cocoa, because although

it is still dominated by smallholders, the availability of labor in Indonesia is getting better

after there is no longer a child-labor issue, besides that the labor needed in increasing the

competitiveness of Indonesian cocoa is trained/skilled labor in the field of product innovation

processing and distribution services, labor is also considered as an actor that influences

decision making in cocoa cultivation and handling which affects the quality and efficiency of

cocoa production. This is in accordance with Saputra (2015), Ananda et al. (2018), Ikbal

(2018), and Suherah (2021), that labor is a factor that has a positive and significant effect on

the amount of Indonesian cocoa production. However, the labor subfactor can be an obstacle

to cocoa competitiveness, because currently in reality the process in the field is still done

manually, so it is important to be supported by the use of appropriate technology.

The technology used subfactor has the highest score compared to the other subfactors,

at 4.86. Respondents revealed that the use of technology can increase the competitiveness of

Indonesian cocoa, because technology is needed to increase the amount of production and

good product quality, and can support effectiveness and efficiency in the Indonesian cocoa

processing process. The use of processing technology greatly affects the final quality of a

product. However, the problem that often occurs regarding the utilization of agricultural

technology is that there are still many farmers who are not familiar with cocoa processing

technology, which can be a factor that can hinder the competitiveness of Indonesian cocoa.

This is in accordance with Yani et al. (2017) that the use of technology has no significant

effect on cocoa production in Bandar Baru Sub-district, Pidie Jaya Regency. It should be

noted that the distribution of the use of cocoa processing technology can be evenly distributed.

The pesticide and fertilizer use subfactor has a score of 4.29. Respondents revealed

that the use of pesticides and fertilizers are crucial inputs to improve the competitiveness of

Indonesian cocoa. The use of pesticides and the use of fertilizers can be a leverage in

increasing the competitiveness of Indonesian cocoa, because the use of vegetable fertilizers,

vegetable pesticides, or using natural enemies directed at organic products will reduce trade

barriers in terms of notification of maximum reducing limits (MRLs) above the specified

threshold. It also aims to control plant pest organisms (OPT) in order to meet export needs to

destination countries. The use of appropriate pesticides and fertilizers can be an alternative to

support the amount of cocoa production, especially among smallholders who do not have

enough technology. This is in accordance with Saputra (2015), Yani (2017), Ikbal (2018),

Saputro and Fidayani (2020), and Suherah (2021) who stated that the use of appropriate

fertilizers and pest control can increase Indonesia's cocoa production.

The demand factor consists of three subfactors, namely the level of domestic

consumption, the amount of export demand for cocoa beans and processed products, and the

difference between domestic cocoa prices and prices on the international market. The

domestic cocoa consumption level subfactor has a score of 4.43. Respondents revealed that

domestic cocoa consumption can increase the competitiveness of Indonesian cocoa, as

domestic consumption is increasing, and Indonesia is one of the countries with high cocoa

consumption, which will affect world cocoa consumption and trigger more grinding and

production demand. Higher consumption levels can also open up opportunities for producers

to increase production and if the amount of production is lower than demand, it can increase

the selling price of cocoa products. This is in accordance with Satria et al (2020) who stated

that the consumption of cocoa beans by the downstream industry has increased along with the

development of the national downstream cocoa industry after 2009. However, domestic cocoa

consumption can hamper the competitiveness of Indonesian cocoa if it is not matched by

increased production, and if domestic consumption levels are higher, it can potentially

increase domestic cocoa prices which may be priced higher than export prices.

The subfactor on the amount of export demand for cocoa beans and processed

products had the highest score, at 5.00. Respondents stated that current cocoa exports can

increase competitiveness, as most processed cocoa products now go to the export market, and

the export demand for cocoa products is believed to be a bargaining position for Indonesia's

competitive cocoa quality. In addition, high export demand for cocoa products can increase

the interest of producers in increasing production and innovating in the manufacture of

processed products. This is in accordance with Ginting et al. (2021) which states that the

volume of processed cocoa exports is one of the factors that can increase the competitiveness

of Indonesian processed cocoa.

The subfactor of differences between domestic prices and prices in the international

market has a value of 4.14. Respondents stated that price differences often affect the level of

product competitiveness in the international market, because if domestic cocoa bean prices are

high, then businesses/exporters will set higher prices for exports, thus affecting export selling

prices, especially in value-added products and affecting the competitiveness of Indonesian

cocoa when compared to prices set by other cocoa producing countries. According to

Kindangen et al. (2017) domestic cocoa bean prices are positively affected by international

prices, so that if international prices increase by 1%, domestic cocoa bean prices will increase

by 0.155% in the short term and by 3.782% in the long term. Broadly speaking, if the

international cocoa price increases, the domestic cocoa price will also increase, therefore the

export price set by exporters will also be higher, which will increase the competitiveness of

Indonesian cocoa in the international market. However, because domestic prices tend to be

high, it can reduce the interest in buying Indonesian cocoa domestically.

The Related and Supporting Industry factor has two subfactors, namely the existence

of education and training institutions to create superior human resources to overcome

Indonesia's cocoa problems, and the existence of research and development institutions to

develop cocoa derivative products, especially the food and beverage industry. The subfactor

on the existence of education and training institutions to create superior human resources to

tackle Indonesia's cocoa problem has a score of 4.29. Respondents stated that the subfactor

can increase the competitiveness of Indonesian cocoa, because the role of education and

training institutions is quite important in creating cocoa human resources who are competent

and experts in their fields, especially in overcoming the competitiveness of Indonesian cocoa

which is still in the development stage, where it can be implemented through technical

guidance/training on GAP, GHP, quality standardization, processing, export regulations,

value-added product innovation, counseling on aspects of cultivation, harvest, and post-

harvest to processing and marketing. This is in accordance with Harya (2018), who stated that

the existence of education, training, and R&D institutions has a very important role in

improving cocoa competitiveness.

The subfactor on the existence of research and development institutions to develop

cocoa-derived products, especially for the food and beverage industry, has a score of 4.43.

Respondents stated that this aspect can increase the competitiveness of Indonesian cocoa

because it is important in contributing to the fulfillment of innovation aspects and value-added

cocoa technology to increase competitiveness, as well as opening export opportunities for

Indonesian cocoa derivative products. In accordance with Hidayanto et al. (2009) who stated

that infrastructure and technology dimensions are things that need to be improved and

developed.

The corporate strategy, structure, and competition factor has two subfactors, namely

integration between cocoa policy makers and stakeholders, and revamping the domestic

industry, such as the use of technology, commodity maintenance, and human resource quality.

The integration between cocoa policy makers and stakeholders subfactor has a score of 4.71.

Respondents stated that the subfactor can improve Indonesia's cocoa competitiveness, because

with this subfactor, the competitiveness of Indonesian cocoa can be improved Integration

between stakeholders from government, industry, smallholders, and academia is needed. The

most important aspects are those related to policies and regulations to encourage the

competitiveness of Indonesian cocoa commodities in the international market, such as

resolving trade barriers through diplomacy. In addition, good integration can have a positive

impact on price stability and product demand. In accordance with Haynes et al. (2012),

Ariningsih et al. (2021) who stated that cooperation between stakeholders in the cocoa

industry is needed to improve the quality and quantity of the cocoa processing industry.

Domestic industry improvement subfactors, such as use of technology, commodity

maintenance, and quality of human resources have a score of 5.00. Respondents stated that

improving the quality of human resources is the initial capital for cocoa improvement so that

it can carry out cocoa care according to GAP and post-harvest handling according to GHP and

be able to increase cocoa production, productivity and quality. Achieving quality

improvement can open opportunities for synergy with the domestic industry through

revamping the industrial system. A partnership program that is mutually beneficial to both

parties is also an important factor in increasing the competitiveness of national cocoa.

Industry is closely related to the supply of raw materials that can be fulfilled by increasing

production by increasing crop productivity through intensification, rejuvenation and

rehabilitation. The use of effective and efficient technology must always be accommodated by

the industry related to current technology, as well as post-harvest handling and plant

maintenance at the upstream level which is closely related to the availability of raw materials

that meet industrial scale quality. In line with Rosyady et al. (2022), Dewayani et al. (2022),

and Ariningsih et al. (2021) who stated that the application of GAP and GHP and the

utilization of post-harvest technology are necessary and have been proven to improve cocoa

quality.

The government factor consists of three subfactors, namely government policy in

granting authority and developing community capacity empowerment, government policy on

inputs and outputs to increase cocoa bean productivity, and government policy in maintaining

and cultivating cocoa commodities. The government policy subfactor in authorizing and

developing community capacity empowerment has a score of 4.43. Respondents stated that

government commitment in providing counseling and human resource development is very

important to improve the competitiveness of Indonesian cocoa, because policies issued by the

government on this matter are very important to encourage farmer corporations where farmers

are given the authority to group, institutionalize, produce quality products, consistent,

sustainable and competitive, so that in the end the institution is in a bargaining position in

international trade.

The government policy subfactor on inputs and outputs to increase cocoa bean

productivity has a score of 4.57. Respondents stated that the subfactor can increase the

competitiveness of Indonesian cocoa, because the right policy can provide benefits to each

domestic producer, so that it can provide products in the right quantity and at a good price. In

addition, the policy is important to encourage an increase in national cocoa production

through the facilitation of seeds, other production facilities through rejuvenation,

rehabilitation and intensification of crops, facilitation of tools and equipment postharvest and

processing, technical guidance and training, promotion facilitation and market access.

However, one reason why these subfactors may hinder cocoa competitiveness is that the

prices required for fertilizers, pesticides and other agricultural materials may increase the

price of cocoa production.

The government policy subfactor in maintaining and cultivating the cocoa commodity

has a score of 4.71. Respondents stated that the policy is very important, because if there is no

such policy, the conversion of cocoa land into other commodities such as palm oil and corn

will be a big risk for the future of the Indonesian cocoa industry. Because according to

(Zulkarnain and Sukmayanto 2019), (Mulyo and Hariyati 2020), and Rusli et al. (2022) there

are currently several regions that are experiencing a shift in cocoa farming to other

commodities. Maintaining cocoa cultivation aims to ensure that Indonesian cocoa has

consistent quality and avoids trade barriers with consumer countries. An important factor in

this policy is how the role of the government for plantation protection such as handling cocoa

pests using organic pesticides, encouraging organic products, adaptation facilities and the

impact of climate change, as well as other production input support such as water sources

from irrigation quality fertilizers (organic fertilizers), and other supporting infrastructure for

cultivation.

The opportunity factor consists of two subfactors, namely international market

demand, and policies related to the application of export duties on Indonesian cocoa

commodity exports. The international market demand factor has a value of 5.00. Respondents

stated that this subfactor can increase the competitiveness of Indonesian cocoa in the

international market, because when international demand increases, it is very necessary that

the products produced have quality according to market demand, so that this is both an

opportunity and a challenge for Indonesia in meeting market demand as well as meeting

preferences according to destination countries so that Indonesia's role is increasingly evident

in the world cocoa market. Therefore, factors that must be considered are how to stabilize

prices at the level of farmers, traders, exporters, as well as the consistency of quality and

continuity of product supply for export as well as the guarantee of national regulations that

favor the upstream and downstream of the Indonesian cocoa industry.

The policy subfactor related to the implementation of export duties on Indonesian

cocoa commodity exports has a value of 4.57. Respondents stated that the export duty policy

can increase added value to cocoa commodity exports due to the selling value of processed

cocoa products so that Indonesia is increasingly taken into account, in addition to the

expansion of the international cocoa industry as one of the impacts of export duties will

increase the competitiveness of processed cocoa product exports and improve Indonesia's

performance in the international market. The implementation of export duties will increase the

competitiveness of processed cocoa products in the international market because it encourages

the industry to process cocoa beans domestically so that cocoa exports, especially derivative

products, will increase. The downstreaming of cocoa products is necessary to increase the

selling value of the product, so that the welfare of farmers also increases, and increases the

interest in cultivating cocoa. The policy of applying export duty on cocoa beans needs to be

continued because it encourages the downstreaming of commodities and creates value-added

and quality products according to market demand. The challenge that must be faced is the

fulfillment of raw material production supply which must be The implementation of the

export duty policy should be directed towards improvements in the upstream sector,

especially at the farm level, in stimulating production and other intensive programs. The

implementation of this export duty policy should be directed to improvements in the upstream

sector, especially at the farm level, to stimulate production and other intensive programs.

Conclusion:

Based on the results and discussion, it can be concluded that the analysis of the

competitiveness of cocoa beans and its processed products (powder, butter, and cocoa paste)

conducted using the RCA method and Porter's Diamond Model, the export duty policy

imposed on Indonesian cocoa beans in 2010, had a significant impact on increasing the

competitiveness of processed cocoa bean products (powder, butter, and cocoa paste). The

competitiveness of processed cocoa bean products (powder, butter, and paste) has increased

quite high in the main export destination countries. Meanwhile, based on the Porter's

Diamond Model method, demand factors, corporate strategy factors, structure, and

competition and opportunity factors are very important factors in increasing the

competitiveness of Indonesian processed cocoa products. Increased competitiveness of

Indonesian processed cocoa bean products in the international market can be utilized by

Indonesia to strengthen its competitiveness in export destination countries, given that

consumption and demand for processed cocoa bean products and the cocoa processing

industry are currently experiencing rapid development.

The current export duty policy on cocoa beans can still be implemented because the

international market demand for processed cocoa bean products is also increasing, so this is in

line with the purpose of imposing an export duty policy on cocoa beans, which is to increase

exports of Indonesian processed cocoa bean products. However, the export duty policy also

needs to be balanced with other policies. The Indonesian cocoa industry, which is still highly

dependent on the availability of raw materials, still needs policies that are able to maintain the

cultivation of cocoa plants, the processing of cocoa beans, and the increase and effectiveness

of production. Therefore, policies such as post-harvest fermentation of cocoa beans,

equalization of the use of cocoa harvesting and post-harvesting technology, and training for

cocoa farmers in managing Indonesian cocoa need to be carried out. Gernas Kakao can also

be reintroduced to improve the quality and production of Indonesian cocoa.

AGB 100_ASU_ASSIGNMENT_2024_COMPETITIVENESS ANALYSIS AND SUPPORTING STRATEGY OF EXPORT DUTY POLICY ON INDONESIAN COCOA COMMODITY

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