Competitiveness Analyses between Indonesian and Malaysian Palm Oil Exports with Special Focus on Five Major Importing Countries from 2001 to 2014

Abstract

This study investigates the competitiveness of Indonesian and Malaysian palm oil export with special focus on five major importing countries, namely China, Singapore, India, Pakistan and Netherlands, from 2001 to 2014. The methods used are Revealed Comparative Advantage (RCA), Revealed Symmetric Comparative Advantage (RSCA) and Constant Market Share (CMS). Based on RCA and RSCA calculation, the results show that Indonesia and Malaysia have positive result. This is self-explanatory because Indonesia and Malaysia are the world’s biggest palm oil producers. Yet, Indonesia’s RCA and RSCA indices during 2001 to 2014 are higher than Malaysia’s. It demonstrates that Indonesia’s palm oil is more competitive than Malaysia. Based on CMS calculation, the findings are: Firstly, palm oil commodity is influenced by high demand during 2001 to 2014 in five major importing countries. Secondly, both countries had concentrated on the export commodity whose markets were growing relatively fast. Thirdly, Indonesia’s palm oil commodity experiences a rapid growth in the selected markets while Malaysia experiences a stagnant growth. Fourthly, Indonesia’s palm oil competitiveness is higher than Malaysia in five major importing countries.