An Integration of Indonesian Market for Gree Coffee: A Review from Exported and Imported Market Outlook on the Major Exported Countries

Abstract

The purpose of this study is to analyze the relationship between price of Indonesian green coffee beanfrom three major exporters: Brazil, Columbia, and Vietnam as well as other six major importers: the United States, Germany, Italy, Japan, Malaysia, and Singapore in the world market. Data applied in this study are a time series from 1970 to 2012, extrapolated from Food Agricultural Organization (FAO) data set. To attain the target, all data are analyzed by applying cointegrated test and error correction model (ECM). The analyses show that 1). The exported price of Indonesian green coffee cointegrated with the prices on the market that is intended to the major importers and exporters; 2). The imported price of green coffee in the United States, Germany, Japan, Malaysia, and Singapore have a significant spin-off for the short-term, but only the United States and Singapore are considered to be significant for the exported price of Indonesian coffee beans; 3). The exported price of Brazil and Vietnam possess a significant effect on the exported price of Indonesian coffee beans in both, short-term and long-term period, while the exported price from Colombian coffee beans are not significantly correlated

Keywords: Coffee price, Cointegrated test, export, Import, Error correction model

DOI: 10.7176/JMCR/61-04

Publication date:October 31^st 2019