Indonesia’s Natural Rubber Productivity and Technically Specified Natural Rubber 20 Export: The Effect of El Nino Southern Oscillation

Abstract

El Nino Southern Oscillation (ENSO) causes rainfall anomalies, which may disrupt Indonesia’s natural rubber production by interfering with the trees’ growth and affecting the export volume. This study analyzed the effect of ENSO dynamics on the monthly productivity of natural rubber and Technically Specified Natural Rubber (TSNR) 20 export. Monthly data from January 2006 to December 2019 were collected from the Statistics Indonesia, International Trade Centre (ITC), World Bank, Bank Indonesia, and National Ocean and Atmospheric Administration (NOAA). Descriptive statistics unveiled that strong La Nina increased the average of monthly productivity by 3.37% to 9.68%, while strong El Nino tended to decrease productivity by 1.30% to 9.27%. Moreover, the Vector Error Correction Model (VECM) demonstrated the negative effect of ENSO on Indonesia’s natural rubber export, both in the short and long term.