The Analysis of Coal Competitiveness and the Factors Affecting Indonesia’s Coal Exports to Main Destination Countries (A Case of 8 Destination Countries)

Abstract

Indonesia is one of the largest coal producers globally, with coal as the main export commodity compared to other commodities in the mining sector. The more competitive the world coal market is, the Indonesian coal market share faces threats from other coal exporting countries. The increasing commitment of countries to reduce air pollution by cutting the use of coal for power plants at PLTU. This study analyzes the competitiveness and various factors that influence the competitiveness of Indonesian coal in 8 export destination countries. This study seeks to determine how the development of Indonesia’s coal competitiveness to the eight central destination countries and what factors affect Indonesia’s coal exports for the 2009-2020 period to the eight central destination countries using RCA analysis and panel data regression. Based on the analysis, results show that the competitiveness of Indonesia’s coal exports to 8 destination countries is excellent. It can be seen from the RCA value obtained by each country from 2009-to 2020, which is greater than 1. Meanwhile, based on the results of panel data, regression estimates with random models show that GDP per capita, population, and coal prices have a negative and significant impact on coal competitiveness in 8 Indonesian coal importing countries. The study results did not find the effect of exchange rates and CPO prices on coal competitiveness in 8 Indonesian coal importing countries.

Competitiveness and Influence of Indonesia’s Coal Exports on International Trade: Case Study of 5 Destination Countries

“…The supply and demand sides of a country's population growth have an impact on a commodity's export. This study does not support [9], indicating Indonesia's coal exports are significantly less competitive when considering the population of the country of destination. A large population is viewed as a fundamental resource for development and can improve quality as well as expertise and skills, which will raise national production.…”

“…Saying that the wholesale trade price index has a negative impact on exports is possible because if domestically produced items become more expensive, there will be a greater demand for exports, which will raise the prevalence of domestically produced goods and hence lower exports [8]. Additionally, high pricing might result in a lack of items since customers often substitute closely related but less expensive alternatives [9].…”

“…So that their industries could continue to operate, a number of nations chose to import coal from Indonesia to meet their energy needs [8]. The study [9] explains that the mining industry's main commodity, coal, makes up a sizable portion of Indonesia's GDP. In addition, compared to other mining exports, coal has the largest export value.…”

Forecasting the potential output and growth of the manufacturing industry: a case study of Indonesia's manufacturing sector

“…The industry drove the post-crisis economic recovery from 2011 to 2014 but experienced a negative trend from 2015 onwards. From 2011 to 2015, the period witnessed a positive output gap, primarily fueled by a surge in global commodity demand, specifically in the production and exports of coal, CPO, and metal minerals (Admi et al, 2022). During this period, the high global demand and price increases increased incomes and boosted the demand for goods and services.…”

Power Generation Infrastructure and its Effect on Electric Energy Consumption: Context in Indonesia, 2013–2020

“…These four components need to be developed and built to prevent the risk of dependence on fossil fuels. In natural characteristics, Indonesia is a producer of natural gas, oil, and coal (Admi et al, 2022;Aprizal et al, 2022;Faisol et al, 2020;Ridena et al, 2021). However, the pattern of wasteful consumption that is not matched by production capacity is relatively unsustainable.…”