Comparison of Crude Palm Oil (CPO) Competitiveness Between Indonesia and Malaysia in The International Market

Abstract

Indonesia and Malaysia are two major players in the international Crude Palm Oil (CPO) market. Along with the increasing global demand for CPO, the two countries have great opportunities in developing the CPO industry for both domestic and global economic growth. This study aims to analyze the comparison of the competitiveness of CPO exports between Indonesia and Malaysia in the international market during the period 1999 to 2019. The comparison of competitiveness is analyzed by referring to the Revealed Comparative Advantage (RCA), Export Competitiveness Index (ECI) and Trading Specialization Index (ISP) approaches. In addition, qualitatively the competitiveness of Indonesian CPO is also explained through the Berlian Porter approach. The results showed that in general, Indonesian and Malaysian CPO had an increasing trend of competitiveness. Based on the value of RCA, ECI and ISP scores, Indonesia has a higher comparative advantage than Malaysia. Based on the position of competitiveness, Indonesia is at the stage of maturation. Meanwhile, Malaysia is still in the growth stage.