Determinants of Cocoa Bean Trade in the International Market: Gravity Model Approach

Abstract

Cocoa beans are one of Indonesia's primary export commodities, ranking fourth in terms of foreign exchange earnings. Under conditions of free trade, this study aimed to analyze the determinants of the export value of Indonesian cocoa beans compared to its competitors in West African countries (Ivory Coast, Ghana, and Nigeria). The research method used is the gravity model with panel data from 2000 - 2020, using STATA 14.2 and Microsoft Excel. The results indicate that the variables significantly affecting the export value of cocoa beans are economic distance, production, export volume, the population of exporting countries, harvested area, exchange rate, and membership in AFCFTA. Other variables are not significant. This study concludes that the effect of export volume and production of cocoa beans, economic distance, and exchange rate are positive, while the effect of membership in AFCFTA is negative. However, this study is unable to analyze the factors that influence the trade of Indonesian cocoa beans and its competitor countries to the import destination country (Malaysia) as well as the export of cocoa beans (raw or roasted). Future research direction includes exploring Indonesia's post-COVID-19 international trade strategy and food safety issues.