Analysis Position of Indonesia Coffee in Global Value Chain
Rahayu Widyantini
Indonesia Export Training Center
Directorate General National Export Development,
Ministry of Trade
Jl. Letjen S.Parman no 112 Jakarta Barat 11440, Indonesia
Abstract
The Global Value Chain (GVC) has driven by the global economy, the need for goods encourages the creation of distribution channels globally. GVC is a tool for tracking shifts in global production patterns, linking geographically dispersed activities and determining the roles played in both developed and developing countries. Coffee is one of Indonesias leading products by contributing 2.7% of the worlds exports and number four producers in the world in 2018. However, exports declined during the 2014-2018 period by 5% and decreased production capacity by 5.6% from 2017 -2018. The stakeholders involved in the coffee industry also still do not provide maximum results in expanding the overall value produced. With this description, it is necessary to see how Indonesia is in the GVC and explain the obstacles faced by stakeholders in maximizing the coffee value chain. The theory of diamond porters will be used for analysis. The results show that the total value created in the Indonesian coffee chain is truly sourced from within the country, demand conditions are very influential on Indonesias position in the GVC. The governments role in improving the coffee value chain also needs to be maximized, such as giving facilitation of certification and infrastructure improvements.
Keywords: GVC, Coffee, Position
Topic: Business Strategies on GVC Participation