Assessing the Dynamics of Indonesian Coffee Export Sustainability: A VAR Model Approach
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Abstract
Coffee has a big potential in the international market as proven by the level of coffee consumption that tend to rise despite the global crisis such as the economic crisis and pandemic. This study aims to analyze the dynamics of macroeconomic indicators and real-sector variables influencing the Indonesian coffee trade in internastional market. This study includes Indonesian coffee export volume, global coffee price, production amount of Indonesian coffee, Rupiah’s exchange rate on US$, and economic crisis. This study uses the Vector Autoregression (VAR) analysis method. The analysis result showed that global coffee price, production amount of Indonesian coffee, and economic crisis have significant influence on the certain lag in the development of Indonesian coffee export. Meanwhile, the exchange rate does not have a significant influence. Implementation of institutional development strategies for coffee farmers, improving the quality of coffee beans, developing human resources and infrastructure, and environmentally friendly production innovations can create sustainability for coffee commodities in both domestic and global markets.
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