Export of Indonesian cinnamon in international market: competitiveness and performance

Abstract

The high level of competition in the world cinnamon market causes a downturn in Indonesian cinnamon exports in international market. In 2019-2020, sales of Indonesian cinnamon in international market have experienced a downward trend. This study aimed to analyse the trend of Indonesian cinnamon’s export value in international market in 2001-2020 compared to Sri Lanka, Vietnam, and China, as the main exporting countries, then analyse the factors influencing the export value of Indonesian cinnamon in the United States, the Netherlands, Brazil, Germany, and Thailand, as main destination countries in international market by adding spatial and competitiveness variables. This study utilized secondary data and time-series data. The data obtained in this study were collected from various data sources such as International Trade Centre, World Bank, WTO, UN Comtrade, Artnet, UNESCAP, Pacific Exchange Rate Service, and other publications related to this research. Data on the performance of Indonesian cinnamon in international market utilized HS 1996 with HS code 0906 (Cinnamon and cinnamon-tree flower) in the 2001-2020 range. The results showed that the exports of Indonesia's cinnamon in international market had a positive trend. Indonesia had a very strong comparative advantage, so the potential to increase Indonesia's market share was very open in international market. The model estimation results showed that trade costs had an insignificant effect on Indonesian cinnamon exports in international market, while other variables, namely the GDP of the importing countries, the GDP of the exporting countries, the exchange rate, population, and competitiveness had a significant influence.