The Dynamics of Rice Price in Cipinang Market Due to Shock of Pakistani Export Prices

Abstract

One form of bilateral cooperation between Indonesia and Pakistan is the entry of Pakistan as a general category of rice exporter to Indonesia in 2018. This condition will affect the price of rice traded in a traditional market in this case the Cipinang wholesale market. This study aims to examine changes in rice price in the wholesale market due to price shock in the Pakistani market. The data used were monthly data from January 2001-May 2018. Data were analyzed using VAR and VECM. The analysis results show that between the Indonesian and Pakistani rice markets, there is no integration. However, if they are integrated with rice in the Cipinang wholesale market, rice in the Pakistani market occurs integration with Cianjur kepala, Cianjur slyp, Muncul I, Muncul II, Muncul III and IR 42. The IR 42 rice price changes due to the changes on Pakistani rice price which does not cause any changes on other rice prices in the Cipinang Market. Based on this research, Indonesia could import rice from Pakistan by paying attention to farmers who grow varieties of rice that are integrated with Pakistani rice.