Analysis of Factors Affecting Indonesian Cocoa Exports to the Netherlands

Abstract

Understanding the short- and long-run determinants of cocoa exports can help inform Indonesia’s agricultural trade policies. This study aims to analyze the factors that influence Indonesian cocoa exports to the Netherlands from 1991 to 2020. This study used secondary data for 30 years and used the Autoregressive Distributed Lag (ARDL) analysis method. The results indicate that in the short run, the exchange rate has a significant negative effect on Indonesian cocoa exports to the Netherlands, while the Netherlands’ GDP per capita has a negative but insignificant effect. Additionally, both domestic cocoa production and international cocoa prices show positive yet insignificant effects. Meanwhile, the long-run estimation reveals that domestic cocoa production exhibits a significant negative impact on exports, whereas the exchange rate and the Netherlands’ GDP per capita have positive but insignificant effects, and international cocoa prices have a negative but insignificant effect. These findings highlight the distinct short-run role of the exchange rate and the long-run relationship between domestic production and bilateral export performance. They also indicate that higher national cocoa output is not necessarily accompanied by higher exports to the Netherlands, suggesting that production expansion alone may be insufficient to strengthen exports to this market.