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Examining Export Policy Strategy on Corn and Coffee
Kumara Jati (a). Yudi Fadilah (b). Immanuel Lingga (c).

(a)Indonesian Trade Promotion Center-Chennai-India, Ministry of Trade of Republic of Indonesia.
kumara_jati[at]yahoo.com

(b)Trade Analysis and Development Agency,
Ministry of Trade, Jakarta, Indonesia,
yudi.fadilah[at]gmail.com

(c)Trade Analysis and Development Agency,
Ministry of Trade, Jakarta, Indonesia,
immanuel.lingga[at]gmail.com


Abstract

Corn and coffee are the two main export commodities that are important for the development and employment of workers in Indonesia. The appropriate export policy strategy is needed when the prices of export commodities fluctuate. The factors of the rainy and dry seasons are also relatively influential on price fluctuatuions which ultimately can be considered to be able to help in the strategy of increasing export. The model used in this study is Autoregresive and Moving Average and Autoregressive Conditional Heteroskedasticity/Generalized Autoregressive Conditional Heteroskedasticity (ARMA-ARCH/GARCH) with dummy variables. The data used are corn and coffee prices from Januari 2010 to December 2018. The ARMA-ARCH/GARCH model can help show the patterns of corn and coffee price movements during the rainy and dry seasons. The ARMA-ARCH/GARCH model with the dry season dummy variable significantly turns out to have more influence on the conditional variance of corn and coffee prices compared to the rainy season dummy variable. Relevant authorities related to export policies need to be able to provide specific strategies in the event of a long dry season because they can affect the fluctuations in corn and coffee prices. Increased the value added and a good commodity storage system can be a good strategy in dealing with price fluctuations due to bad seasons.

Keywords: Export Policy, Corn and Coffee Price, ARMA-ARCH/GARCH, Rainy and Dry Seasons.

Topic: Trade policies strategic Responses

Link: https://ifory.id/abstract/Q7pwynHAUqru

Conference: The 3rd International Conference on Trade (ICOT 2019)

Plain Format | Corresponding Author (Kumara Jati)

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