Received: March 2023, Revised: April 2023, Published: May 2023 14
JMDB
Vol 2 (No 1), 2023, Page: 14-25
e-ISSN: 2829-5978
Jurnal Manajemen dan Dinamika Bisnis
publikasi.dinus.ac.id/index.php/jmdb
ANALYSIS OF THE EFFECT OF EXCHANGE RATES,
INDONESIAN COFFEE PRODUCTION AND
INTERNATIONAL COFFEE PRICE ON COFFEE
EXPORT VOLUME IN INDONESIA
(CASE STUDY ON INDONESIAN COFFEE EXPORTS
2018-2022)
Linda Ayu Oktoriza
1*
1
Management Department, Universitas Dian Nuswantoro, Semarang, Indonesia
*Corresponding Email: [email protected]
ABSTRACT
This research is a type of explanatory research with a quantitative approach. The variables
used in this study are the exchange rate, Indonesian coffee production, and international coffee
prices as the independent variables, and the volume of Indonesian coffee exports as the
dependent variable. This study uses secondary data using time series from 2018 to 2022 with
30 data taken from 6 countries, each country taking five years. The data analysis method is
multiple linear regression analysis. The results of multiple linear regression analysis show that
there is a combined effect between the variables of exchange rates, production, and
international prices on export volume, there is no partial effect between the variables of
exchange rates and production on export volume, and there is a partial effect between
international prices and export volume.
Keywords: Exchange Rates; Production; International Prices; Export Volume; Coffee
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INTRODUCTION
International trade aims to increase a country's economic development, one of which is by
carrying out export activities. One of the benefits of exports in foreign trade is that the country
will gain profits that will cause national income to rise, which will lead to an increase in output
and the rate of economic growth. The t-level high output will increase economic development
(Komenaung & Niode, 2014).
It can be said that a country's economy is declining or not, as seen from its indicators,
namely the exchange rate. The exchange rate is the price of one unit of foreign currency in
domestic money. In other words, the exchange rate is the price of a currency when exchanged
for other currencies. The exchange rate that is often used is the Rupiah exchange rate against
the Dollar because the Dollar is a relatively stable currency in the economy. If a country's
currency strengthens, the country's economy will continue to increase, and vice versa. If the
value of the currency weakens, it means that the country's economy is experiencing a decline.
The exchange rate is also an essential factor in carrying out international trade activities; in
terms of exports, an increase in a country's exchange rate will also spur the country's producers
to increase the number of their exports in order to increase their profits.
Table 1 shows each country's exchange rate, which changes yearly, either increasing or
decreasing. Changes in exchange rates significantly affect economic activity, both exports and
imports. Changes in exchange rates impact the company's value because it affects the number
of cash inflows received from the company's export activities or from its subsidiaries which
affect the number of cash outflows used to pay for imports (Sukirno, 2006). In general,
exchange rate changes can hinder international trade because exchange rate changes are closely
related to the relative prices of domestic goods at home and abroad.
Table 1. Middle Exchange Rates of Foreign Currencies Against Rupiah
at Several Banks of Indonesia (Rupiah) 2018-2022
2018
2019
2020
2021
2022
10211.00
9739.00
10771.29
10343.60
10580.68
16560.00
15589.00
17330.12
16126.84
16712.63
18373.00
18250.00
19085.50
19200.38
18925.98
1849.00
1785.00
1819.34
1829.84
2018.56
131.00
127.97
136.47
123.89
117.57
3493.00
3397.00
3491.78
3416.10
3556.25
10603.00
10321.00
10644.08
10533.76
11659.08
14481.00
13901.00
14105.00
14269.00
15731.00
Source: Bank Indonesia
Indonesia is one of the world's largest producers of coffee and has a significant role in
Indonesia's total agricultural exports. Coffee is a type of drink that is important for most people
around the world. Not only because of the enjoyment of coffee consumers but also because of
the economic value for countries that produce and export coffee beans. Coffee exports play a
significant role in developing Indonesia's total export value because coffee is one of the leading
export commodities in the agricultural sector.
Coffee exports play a significant role in developing Indonesia's total export value because
coffee is one of the leading export commodities in the agricultural sector. Indonesia is the
second largest Robusta coffee-producing country after Vietnam. The coffee commodity has a
declining market share in the agricultural sector, and its growth tends to be negative, but the
absolute value of its exports is relatively high. It is due to competition from Vietnam, the main
competitor for Indonesian Robusta coffee exports. Vietnam has several advantages compared
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to Indonesia, especially regarding productivity and quality. There are more than 50 destination
countries for Indonesian coffee exports, with the USA, Japan, Germany, Italy, and England
being the main destinations. Panjang Port (Lampung) is the gateway for Indonesian robusta
coffee exports, and Belawan Port (North Sumatra) is the gateway for Sumatran Arabica coffee.
At the same time, Tanjung Perak Port (East Java) is the gateway for arabica and robusta coffee
produced from East Java and parts of East Indonesia. The demand for Indonesian coffee
continues to increase from time to time, considering that Indonesian robusta coffee has the
advantage of having a strong enough body. In contrast, Arabica coffee produced by various
regions in Indonesia has unique taste characteristics (acidity, aroma, flavor).
Table 2. Indonesian Coffee Production & Export
Year
Production (tons)
Export (tons)
Exports (in billion US dollar)
2018
759,118
513,143
1.45
2019
761,453
471,250
1.68
2020
765,153
392,715
1.30
2021
651,217
455,135
1. 29
2022
641,222
419,320
1. 41
Source: Association of Indonesian Coffee Exporters and Industry (AEKI)
During The Pandemic Covid era, there is fluctuating demand for coffee export that can
decrease the amount of Indonesian coffee sold to other countries. We can see from Table 2 that
the development of coffee production has fluctuated in the amount of coffee produced each
year. From 2020 to 2021, coffee production decreased from 765,153 tons to 651,217 tons.
However, Indonesia's coffee production has also experienced an increase from 2019 to 2020 by
9.95%. Not only does coffee production fluctuate, but the amount of coffee exported also
fluctuates in the export value of plantation commodities yearly.
These factors attract researchers to find out why the coffee export volume in Indonesia
has decreased. As explained above, is it just because covid 19 pandemic or other factors such
as exchange rates, coffee production, and international coffee price? We must find these factors
because we want Indonesian coffee export to increase like last time.
LITERATUR REVIEW
International Trading
International trade is an activity of relations and buying and selling transactions between
countries, which includes exports and imports. International trade exists by mutual agreement
between one country and another. Not only do individuals interact with each other, each country
also interacts. Moreover, one form of interaction between countries is cooperation in
international trade.
Prices occur through two things: prices set by the government based on a planned
economy and prices determined by the interaction of consumers, labor, and companies based
on a market economy. The price sold or bought in the domestic market results from market
mechanisms that form the equilibrium price. According to Rahardjan (2008), the equilibrium
price is when consumers and producers do not want to increase or decrease the amount
(quantity) of goods consumed and sold. It means that demand equals supply.
According to (Hutabarat, 1995), export is defined as the sale of domestic products to
foreign countries that pass through customs areas. The goal of the exporter is to make a profit.
Prices of goods exported abroad are more expensive than domestic. If it is not more expensive,
exporters are not interested in exporting the goods. Without these conditions, export activities
will not generate profits.
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Exchange Rate
The difference in the exchange rate of a country's currency (exchange rate) is principally
determined by the amount of supply and demand for that currency (Levi, 1996). In general, the
exchange rate can be interpreted as a comparison of the exchange rate is the price of a currency
against other currencies (Salvatore, 1997). Exchange rates between currencies are also referred
to as exchange rates. The exchange rate is the price of one unit of foreign currency in units of
domestic money; in other words; the exchange rate is the price of one currency when exchanged
for another. Rupiah exchange rates against the US Dollar, Yen, Pound Sterling, Australian
Dollar, Singapore Dollar, and Euro are terms that often appear in various mass media.
The currency is considered to have a stable value and is often used for international
payment. The exchange rates contain the terms selling and buying rates used by money changer
companies to gain profits from foreign currency exchange services. The selling rate is the rate
that applies when we want to sell Rupiah to money changers or will exchange Rupiah for
foreign currency. The buying rate is the rate that applies when we want to exchange foreign
currency for Rupiah (we want to buy Rupiah). The foreign exchange rate system will depend
on the nature of the market. The state of the exchange rate is influenced by the amount of money
in the country. The amount of domestic money in circulation to the amount of goods and
services sold.
In addition, the supply and demand conditions for domestic currency against foreign
currencies and the exchange rate system adopted by the country also affect the value of a
country's exchange rate. An increase in the exchange rate of the domestic currency is called
appreciation of the foreign currency. The decrease in the domestic exchange rate is called the
foreign currency depreciation. Relative changes due to appreciation or depreciation can then
affect the condition of a country's foreign trade. By holding all other conditions held, a currency
appreciation will increase the relative price of its exports and decrease the relative price of its
imports.
The export goods of these countries are relatively less competitive in the international
market, which can reduce the value of exports abroad and encourage an increase in imports.
Conversely, depreciation will result in a decrease in the relative price of exports and an increase
in the relative price of imports. The country's export goods become more competitive in the
international market, which can increase the value of exports abroad and reduce the value of
imports.
Production
Production factors have a very close relationship with the product produced in the production
process. The product as the output of the production process is highly dependent on the
production factors as input in the production process. While the production process also
depends on the factors of production that go into it. It means that the value of the resulting
product depends on the value of the production factors used in the production process. The
production function is the link between product value (output) in the production process.
The production function can reflect the state of the technology users, be it companies,
industries, or the economy in general. Changes in the use of technology will change the shape
of the production function. For example, a company manufactures shoes. In the production
function, shoes can be produced in various ways. If one of the compositions of factors of
production is simply changed, then the result will change. However, the output will remain the
same if other factors of production replace changes in one factor of production. Mathematically,
the production function can be formulated as follows (Equation 1):
Q = f(K.L.R.T) (1)
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Q represents the number of products (output) produced, f represents a function, which
shows the functional relationship between the number of outputs and inputs (K, L, R, T), and
K represents the amount of capital or capital goods. L represents the amount of labour, R
represents the number of resources (natural wealth), and T represents the technology level used.
The formula shows the amount of product (output) produced depending on the amount of
capital (capital), the amount of labor, the number of resources, and the level of technology used.
In general, the production process requires various types of production factors. However, to
facilitate analysis, it is necessary to simplify the factors of production, which are very large in
quantity and quality.
Price
Price is the most important thing in business activities because an item sold must be priced in
advance so that all parties can benefit and obtain satisfactory results by setting an agreed price.
Price is a customer agreement to measure the company's profit and market share based on the
use and expectations of the item (Richter, 2012). Price is an exchange rate of goods or services
in the form of money for an item or service that consumers must pay to obtain or own an item
or service. Price is used as the main force for companies to measure market share and profits.
It causes every small price change to result in a change in the percentage of profits the company
gets.
If the international price is higher than the domestic price, then when trade starts, a
country will tend to become an exporter. Producers in that country are interested in taking
advantage of higher prices on world markets and selling their products to buyers in other
countries. Conversely, when international prices are lower than domestic prices when trade
relations begin, the country will be interested in taking advantage of the lower prices offered
by other countries.
The Effect of Exchange Rate on Indonesian Coffee Export Volume
Ginting (2020) concluded that long-term and short-term exchange rates negatively and
significantly affect Indonesia's exports. Jamilah et al. (2019) concluded that the rupiah
exchange rate and domestic coffee production significantly affected Indonesia's coffee export
volume. Likewise, Sevianingsih et al. (2020) concluded that the rupiah exchange rate had a
significant effect on Indonesia's export volume. Therefore, the first hypothesis is
H1: The exchange rate has a positive effect and is significant to the export volume of
Indonesian coffee
The Effect of Coffee Production on Indonesian Coffee Export Volume
The link between Indonesian coffee production and the amount of Indonesian coffee exports is
that if the amount of coffee production increases, it means that the amount of coffee exports to
various countries also increases. Galih and Setiawina (2014) concluded that partially, only the
variable amount of production had a significant effect on the volume of Indonesian coffee
exports from 2001-2011. Umam et al. (2016) concluded that the factors that have a significant
effect are the productivity of coffee plantations in Malang Regency and domestic coffee prices.
Jamilah et al. (2019) concluded that the rupiah exchange rate and domestic coffee production
had a significant effect on the volume of Indonesian coffee exports. Therefore, the second
hypothesis is
H2: Production has positive effects and is significant to the export volume of Indonesian
coffee
The Effect of International Coffee Prices on Indonesian Coffee Export Volume
When international coffee prices increase, coffee exporters will carry out mass production so
that exports will be even greater (Puspita et al., 2015). Conversely, if international coffee prices
Jurnal Manajemen dan Dinamika Bisnis, Vol. 2, No.1, 2023 L.A. Oktoriza
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decrease, coffee exporters will produce according to importers' requests, and exports will be
smaller when production increases. Puspita et al. (2015) showed that domestic cocoa production
and international cocoa prices have a significant effect on coffee exports. Sevianingsih et al.
(2020) show that international tea production and prices have no significant effect on the
volume of Indonesian tea exports. So the hypothesis can be formulated:
H3: International coffee prices have a positive effect and a significant to the volume of
Indonesian coffee exports
METHODS
Operational Variable Definitions
Exchange Rate Fluctuations. The exchange rate is the price of one unit of foreign currency in
units of domestic money; in other words, the exchange rate is the price of a currency when
exchanged for another. Fluctuations mean changing certain variables, which generally occur
due to market mechanisms. The change can be in the form of an increase or decrease in the
variable's value, in this case, the fluctuation of the currency or price. During an appreciation,
the price of exported goods increases, and the price of imported goods decreases, reducing the
value of exports abroad. In contrast, during a depreciation, the price of exported goods
decreases, but the price of imported goods increases relatively. The rate of increase or decrease
in the exchange rate every year can be seen from the percentage increase or decrease in the
exchange rate. As for how to calculate the present in this study by:
% Increase/Decrease = x 100% (2)
Indonesian Coffee Production. The relationship between Indonesian coffee production and
the amount of Indonesian coffee exports is that if the amount of coffee production increases, it
means that the amount of coffee produced increases so that exporters can export coffee to
various countries in large quantities. Conversely, if Indonesia's coffee production decreases, the
amount produced will be less so that exporters can export the same amount as usual, and the
amount can even decrease. The greater the products produced, the greater the exports (Puspita
et al., 2015). In this case, the units used for the amount of production are Tons. As for how to
calculate the percentage in this study by:
% Increase/Decrease = x 100% (3)
International Coffee Prices. Price is an exchange rate of goods or services in the form of
money for an item or service that consumers must pay to obtain or own an item or service.
When international coffee prices increase, coffee exporters will carry out mass production so
that exports will be even greater (Puspita et al., 2015). Conversely, if international coffee prices
decrease, coffee exporters will produce according to importers' requests, and exports will be
smaller when production increases. In this case, the international coffee price is expressed in
US$/ lb. To see the yearly increase or decrease in international coffee prices, look at the
percentage increase or decrease. As for how to calculate the present in this study by:
% Increase/Decrease = x 100% (4)
increase value/decrease value
value before increase/decrease
increase value/decrease value
value before increase/decrease
increase value/decrease value
value before increase/decrease
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Population and Sample
Researchers use objects in the form of Indonesia's central destination countries for exporting
coffee and the number of coffee exports from 2018-2022. The population in this study uses six
countries, and each country is taken for a 5-year period starting from 2018-2022 for each
variable, and the total data used is 30 data. The sample in this study uses data that has been
processed or filtered in the Table 3 below.
Table 3. Export Volume, Exchange Rate, Indonesian Coffee Production,
International Coffee Prices by Main Destination Country (2018-2022)
Country/Year
Export Volumes
(tonnes)
Exchange rate
(IDR)
Production
(tonnes)
International
Coffee Prices
(US$/lb)
Japan
2018
58,878.9
111.27
633,991
7.35
2019
51,438.4
110.63
748,109
7.57
2020
41,920.4
109.43
740,000
6.05
2021
41234.3
108,66
711513
5.68
2022
41240.1
11 1.25
550,000
5.6
USA
2018
48,094.7
13340
633,991
5.19
2019
69,651.6
13336
748,109
5.68
2020
66138.1
13308
740,000
5.45
2021
58,308.5
14440
711513
4.99
2022
65,481.3
14795
550,000
4.72
German
2018
26,461.0
15739
633,991
5.1
2019
50,978.2
15810
748,109
4.74
2020
60,418.5
16821
740,000
5.65
2021
37,976.7
16133
711513
5.72
2022
47,662.4
15070
550,000
5.18
Italy
2018
27,344.4
14739
633,991
8.52
2019
29080.8
15810
748,109
8.49
2020
38,152.5
16821
740,000
8.99
2021
29,745.5
15133
711513
8.85
2022
43048.3
15070
550,000
7.48
England
2018
24,343.1
15894
633,991
15.70
2019
14,868.4
15969
748,109
19.02
2020
16312.4
16579
740,000
19.2
2021
20,781.0
20097
711513
18.92
2022
14,349.2
19370
550,000
20.59
Singapore
2018
7.814.1
18778
633,991
17.80
2019
8.717.1
17929
748,109
19.87
2020
5212.9
17055
740,000
18.02
2021
5377.0
17447
711513
17.80
2022
7,725.9
16540
550,000
18.54
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Data Types and Sources
The type of data used in this research is secondary data. The secondary data used is data that is
recorded systematically in the form of time series data. This study used data for 2018-2022
obtained from various sources, including data on the development of non-oil and gas exports
by sector for 2018-2022 from the Agricultural Sector Export Commodity Analysis, the Central
Bureau of Statistics (BPS), world coffee price data obtained from ICO (International Coffee
Organization), coffee production and export data in Indonesia from the Indonesian Coffee
Exporters and Industry Association (AEKI), coffee export data by the main destination country
for 2018-2022 from the Central Statistics Agency (BPS), while data on the exchange rate of the
United States Dollar against Rupiah Indonesia expressed in Rupiah per Dollar obtained from
Bank Indonesia. This study uses time series data which is limited to the years 2018 -2022. The
basis for choosing the year in this study is to see coffee exports to various countries from year
to year.
Data Analysis Method
Multiple linear analysis determines the direction of the relationship between the independent
and dependent variables, whether each independent variable is positively or negatively related.
In this study, it is used to analyze the effect of exchange rate fluctuations (X1), Indonesian
coffee production (X2), and international coffee prices (X3) on the dependent variable, namely
Indonesian export volume (Y). The multiple linear regression equation model is as follows
(Equation 5):
Y = a + b1X1 + b2X2 + b3X3 + e (5)
Y represents Indonesian coffee export volume, a is Constant, X1 represents the
fluctuating of value exchange rate, X2 represents Indonesian coffee production, while X3
represents international coffee prices. b1 represents regression coefficient of fluctuating
variables mark exchange rate, b2 represents regression coefficient of indonesian coffee
production variable, and b3 represents regression coefficient of indonesian coffee price
variable.
RESULTS AND DISCUSSION
Hypothesis testing
According to Ghozali (2011), the coefficient of determination (R
2
) essentially measures how
far the model's ability to explain the variation of the dependent variable is. The value of the
coefficient of determination is between zero and one. A small R2 value means that the ability
of the independent variables to explain the variation in the dependent variable is very limited.
A value close to one means that the independent variables provide almost all the information
needed to predict the variation of the dependent variable.
The processed data (shown in Table 4) shows that the results are Adjusted R 2 is 0.494,
which means 49.4%. It means that exchange rates, Indonesian coffee production, and
international coffee prices can explain 49.4% of export volume. In comparison, the rest (100%
- 49.9% = 50.6%) is explained by other causes outside the model, such as domestic price, land
area, level of consumption, and others.
Table 4. Adjusted results R
2
Regression
Summary Model
b
Model
R
R Square
Adjusted R
Square
Std. Error of
the Estimates
1
.739
a
.546
.494
12274.1710
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a. Predictors: (Constant), International Coffee Prices, Coffee Production,
Exchange Rates
b. Dependent Variable: Export Volume
According to Ghozali (2011), the F statistical test shows whether all the independent or
independent variables included in the model have a joint effect on the independent
variable/bound to the null hypothesis (Ho). From the F test, the calculated F value is 10.440
with a probability of 0.000. Because the probability is much smaller than 0.05, the regression
model can be used to predict the volume of coffee exports, or it can be said that the exchange
rate, Indonesian coffee production, and international coffee prices jointly affect the volume of
coffee exports. Following are the results of the F test in this study:
Table 5. F test results
ANOVA
a
Model
Sum of Squares
df
Means Square
F
Sig.
1
Regression
4718522770.421
3
1572840923.474
10,440
.000
b
residual
3917037087.446
26
150655272.594
Total
8635559857.867
29
a. Dependent Variable: Export Volume
b. Predictors: (Constant), International Coffee Prices, Coffee Production, Exchange Rates
According to Ghozali (2011), the t-statistical test shows how far the influence of one
explanatory/independent variable individually explains the variation of the dependent variable.
Of the three independent variables in the regression model, the exchange rate and Indonesian
coffee production are not significant. It can be seen from the significant probability for the
exchange rate of 0.740 and Indonesian coffee production of 0.627, which are far above 0.05.
Based on processed data, it shows that the independent variable influences the dependent. The
results of the t-test in this study are shown in Table 6.
Table 6. Test Results t
Coefficients
a
Model
Unstandardized
Coefficients
Standardized
Coefficients
t
Sig.
Collinearity
Statistics
B
std. Error
Betas
tolerance
VIF
1
(Constant)
54233.286
22738915
2,385
.025
ER
-.140
.416
-.051
-.335
.740
.753
1,327
CP
.016
.033
.065
.492
.627
.996
1,004
ICP
-2402,443
513,618
-.712
-4,677
.000
.753
1,329
a. Dependent Variable: Export Volume
Note: ER: Exchange rate, CP: Coffee Production, ICP: Internasional Coffe Prices
The Effect of Exchange Rate on Coffee Export Volume
By the results of data processing, the exchange rate variable has no significant negative effect
on export volume. Based on Table 6 above, it can be seen that the exchange rate against export
volume gives a t value of -0.335 with a significance of 0.740 greater than 0.05 (0.740 > 0.05),
then Ho1 is accepted, and Ha1 is rejected, meaning that the exchange rate has no significant
effect on coffee export volume. However, simultaneously, the exchange rate, Indonesian coffee
production, and international coffee prices all have an effect on export volume.
The exchange rate does not have a significant effect because the demand for coffee from
abroad is very large, so regardless of the exchange rate in the importing country, because the
demand is significant and continues to rise, the importing country will still buy coffee to meet
domestic coffee needs even though the exchange rate is depreciating. World coffee
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consumption is increasing yearly, and the trend of drinking coffee is inherent in society, causing
demand for coffee to continue to rise even though exchange rates fluctuate. The large number
of international transactions that use dollars and a large amount of money circulating in the
country make the Rupiah currency unsellable, which is also why the Rupiah exchange rate is
less influential in international trade. Even though the rupiah depreciates or appreciates, exports
are not affected by this movement, so every point of Rupiah depreciation will have the same
effect as if it were appreciated, only in a different direction. These results are not following the
theory of factors affecting exports. The results of this study are in line with the research of
Umam (2016), Puspita et al. (2015), and Ratana et al. (2012), which state that the exchange rate
has no significant effect on export volume.
The Effect of Indonesian Coffee Production on Coffee Export Volume
Following the data processing results, the production variable has a positive but insignificant
effect on export volume. Based on Table 6 above, it can be seen that Indonesian coffee
production in terms of export volume gives a t value of 0.492 with a significance of 0.627
greater than 0.05 (0.627 > 0.05), then Ho2 is accepted, and Ha2 is rejected, meaning that
production has no significant effect on export volume. However, simultaneously, the exchange
rate, Indonesian coffee production, and international coffee prices all affect export volume. The
test results show that not all coffee produced in Indonesia will be exported abroad. However,
coffee production in Indonesia is also marketed domestically because it is to meet domestic
needs. So, if the amount of our coffee production increases, it does not mean that our exports
also increase. The ability of products produced for export should have a high potential to
compete in the global market. Not all coffee products produced are of good quality so they can
meet the product quality standards of the importing country. The results of this study are in line
with the research of Sevianingsih et al. (2016), which states that production has no significant
effect on export volume.
The Effect of International Coffee Prices on Coffee Export Volume
Following the data processing results, the international coffee price variable has a negative and
significant effect on export volume. Based on Table 6, the value of international coffee prices
to exports is 0.000. It means that the international coffee price variable has a negative and
significant effect because the significance level is less than 0.05 (0.000 <0.05), then Ho3 is
rejected, and Ha3 is accepted, meaning that international coffee prices have a significant effect
on export volume.
It follows the theory of factors affecting exports. This suitability must be balanced with
the high demand for coffee in the market, which has caused coffee prices to increase both
domestically and internationally. It causes producers to have more tips to offer their products
to the market because Indonesian coffee has its characteristics, so many other countries like
various types of Indonesian coffee. It has made several importing countries focus on importing
coffee products from Indonesia even though international coffee prices are increasing. It is what
makes Indonesia's coffee export volume continue to increase even though international coffee
prices continue to soar. This study's results align with the research of Mohani et al. (2016) and
Puspita et al. (2015), which states that international prices significantly affect export volume.
CONCLUSION
This research was conducted to analyze the effect of the exchange rate, Indonesian coffee
production, and international coffee prices on the volume of Indonesian coffee exports during
2018-2022. The exchange rate has no significant effect on the export volume of Indonesian
coffee. It means that regardless of the exchange rate in the importing country because the
demand is large and continues to rise, the importing country will continue to buy coffee to meet
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domestic coffee needs even though the exchange rate depreciates. The large number of
international transactions that use dollars and a large amount of money circulating in the
country makes the Rupiah currency unsold; this is also why the Rupiah exchange rate has less
influence on international trade.
Indonesian coffee production has no significant effect on the volume of Indonesian coffee
exports. It means that no matter how much coffee production is in Indonesia, not all coffee
produced is exported abroad. However, coffee products are also marketed domestically to meet
domestic needs. Not all coffee products produced are of good quality, so they cannot meet the
product quality standards of importing countries.
International coffee prices significantly affect the volume of Indonesian coffee exports.
It means that the large demand for coffee in this market also causes coffee prices to increase
domestically and internationally. The increased demand for coffee is because more and more
foreign people are interested in coffee from Indonesia, which has its own characteristics, so
many countries import coffee from Indonesia to meet their country's needs. It has made some
importing countries focus on continuing to import coffee products from Indonesia even though
international coffee prices are increasing.
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