JRSSEM 2021, Vol. 01, No. 3, 246 – 254
E-ISSN: 2807 - 6311, P-ISSN: 2807 - 6494
DOI : 10.36418/jrssem.v1i3.19 https://jrssem.publikasiindonesia.id/index.php/jrssem/index
MARKET OVERVIEW OF INDONESIA COPPER EXPORT
COMMODITY (CASE OF INDONESIA, THAILAND, AND
JAPAN COPPER EXPORTING COUNTRIES IN 2004-2018)
Greatly Claudia
1*
Iman Murtono Soenhadji
2
1,2
Gunadarma University, Jakarta, Indonesia
e-mail: greattyclaudia@gmail.com
1
, imanms@staff.gunadarma.ac.id
2
*Correspondence: greattyclaudia@gmail.com
Submitted: 14 October 2021, Revised: 20 October 2021, Accepted: 27 October 2021
Abstract. The purpose of this study is to analyze developments, measure the level of trade
specialization, and explore the story of competitiveness of Indonesia, Thailand, and Japan copper
commodity exports in the world market. The analytical methods used are TSI (Trade Specialization
Index), RCA (Revealed Comparative Advantage), RCTA (Revealed Comparative Trade Advantage),
and AR (Acceleration Ratio). The results showed that Indonesia's copper exports and Indonesian
specialization level towards Thailand were at the Maturity stage because the average obtained was
0.910. But for Indonesia, Japan for -0,462 and Thailand for Japan, -0,385 are in the Import
Substitution stage, and for Indonesia, itself is in the Growth stage with an average of 0.792. As for
the RCA results, Indonesia is the most superior because it has an RCA value of> 1 as much as 15,
followed by Thailand with an RCA> 1 as much as three, which means that Indonesia has a
comparative advantage over the world market and Thailand also has good competitiveness, but
for Japan, it does not have an RCA> 1 which means it has no comparative advantage to the world
market. The RCTA results show that Indonesia has high competitiveness against the world market
because it has had a positive index result for 15 years. AR results show that Indonesia and Japan
can seize the copper export market to the world market, while for Thailand for the past three years,
namely in 2016-2018.
Keywords: acceleration ratio; descriptive analysis; revealed comparative advantage; revealed
comparative trade advantage; trade specialization index.
Greatly Claudia, Iman Murtono Soenhadji | 247
INTRODUCTION
In the last few decades, globalization
has caused a variety of fundamental
changes in the world economic order, both
in the financial and trade sectors (Ahmed et
al., 2021). At present, no single country is in
a state of autarchy or an isolated state
without economic relations with other
countries (Abdurakhmanova & Rustamov,
2020). International trade is one of the
activities aimed at improving people's
welfare in the era of globalization and
digitalization (Yeganeh, 2021). Indonesia,
which has abundant natural resources, has
various natural resources that can support
Indonesia's economic sector. One of
Indonesia's natural wealth results is the
copper commodity (Magno & Guzman,
2021). The copper commodity is one of the
mining commodities that plays a vital role
in making a positive contribution to the
value of Indonesia's exports, so it is
essential to analyze the competitiveness
and development of Indonesia's copper
exports abroad.
International Trade Theory
International trade theories try to
understand why a country (economy)
wants to conduct trade cooperation with
other countries. International trade plays a
vital role in the process of economic
development in various countries.
Export Market
Exports occur mainly because the
needs for goods and services are fulfilled
domestically or because the production of
goods and services can be competitive
both in price and quality of similar products
on the international market (Lim et al.,
2021).
Competitiveness Analysis
Competitiveness is the ability of a
company, subsector, or country to offer
goods and services that meet the quality
standards of the domestic and world
markets at competitive prices and provide
adequate income for the resources used to
produce them (Halimi, 2020).
Indonesian Prime Commodities
Indonesia is known as one of the
countries rich in superior commodities in
the world. Leading commodities are
commodities that have strategic value
based on physical considerations (land and
climate conditions) (Guslan et al., 2020), as
well as socio-economic and institutional
(mastery of technology, human resource
capabilities, infrastructure, socio-cultural
constraints) to be developed in an area
Sitorus et al. 2014 in (Selfia, 2020).
Indonesian marine and agricultural
products are very numerous and diverse,
making this country have its natural wealth.
One of the results of Indonesia's natural
wealth is the copper commodity
(Rochwulaningsih, 2021). Indonesia has the
Grasberg Mine located in the province of
Papua. This is the second-largest copper
mine and the largest gold mine in the
world. In Indonesia, there are 2 of the most
significant mining locations, namely
Grasberg (Papua) and Batu Hijau (West
Nusa Tenggara).
Opportunities and Challenges
Indonesia's main comparative
advantage is in commodities related to
248 | Market Overview of Indonesia Copper Export Commodity (Case of Indonesia, Thailand,
and Japan Copper Exporting Countries In 2004-2018)
natural resources, such as agricultural,
mining, and plantation products. In copper
mining, Indonesia has more than enough
natural resources for raw copper industry
materials. Sufficient copper processing
technology is available adequate and
supported by foreign investors who help
strengthen Indonesian technology in steel
processing. At the same time, the challenge
is the copper concentrate production
capacity of PT. Freeport Indonesia reaches
1-1.2 million tons per year where the
domestic industry has not fully absorbed
the production.
Formulation of the Problem
1. How are Indonesia, Thailand, and Japan
copper commodity exports to the world
market?
2. What is the level of specialization of
Indonesia, Thailand, and Japan copper
commodity exports?
3. What is the position of the
competitiveness of Indonesia, Thailand,
and Japan copper commodity exports to
the world market?
METHODS
Object of Research
The research object taken in this study
is the collection of Indonesian, Thai and
Japanese copper exports with the code HS
7408 (Copper Wire), which is Copper Wire.
Data Types and Sources
This type of research is a quantitative
descriptive study (Sugiyono, 2016). The
descriptive-analytical research method is a
research method by discussing a question
by discussing, describing, analyzing, and
interpreting things written with a compiled
and systematic discussion states by Arifin in
(Wulandari, n.d.). Trade Specialization Index
(TSI) is used to analyze the position or stage
of development. (Prabowo et al., n.d.).
Mathematically, TSI can be formulated as
follows:
TSI = ((Xia-Mia))
((Xia+Mia)) (1)
Where X and M are exports and
imports, and I and a are goods of type I and
country a, respectively. Implicitly, this index
considers the demand side and the supply
side, where exports are identical to
domestic supply and imports are domestic
demand. TSI index can also be used to
identify the growth rate of a commodity in
trade which is divided into five stages as
follows:
1) Introduction Stage
When an industry (forerunner) in a
country (call A) exports new products, a
latecomer industry in country B imports
those products. In this stage, the TSI
index value of the latecomer industry is
-1.00 to -0.50.
2) Import Substitution Phase
The TSI index value rises between -
0.51 to 0.00. At this stage, industry in
country B shows very low
competitiveness because production is
not high enough to reach economies of
scale. The industry exports products of
poor quality, and domestic production is
still smaller than domestic demand. In
other words, for this commodity, at this
stage, Country B imports more than
exports.
3) Growth Stage
The TSI index value rises between
0.01 and 0.80, and industries in country
Greatly Claudia, Iman Murtono Soenhadji | 249
B produce large-scale production and
begin to increase exports. In the
domestic market, the supply for these
commodities is more significant than
demand.
4) Maturity Stage
The index value is in the range of
0.81 to 1.00. At this stage, the product
concerned is already at the
standardization stage concerning the
technology it contains. At this stage
country, B is a net exporter country.
5) Re-import phase
The TSI index value has declined
again between 1.00 and 0.00. At this
stage, industries in country B cannot
compete in their domestic markets with
industries from country A, and domestic
production is less than domestic
demand.
RCA (Revealed Comparative Advantage)
This method measures the export
performance from a country by evaluating
the role of certain commodity exports in a
country's total exports compared to the
share of these commodities in world trade
(Prayitno & Widyawati, 2021). The general
formulation of the RCA is as follows:
C = (xij⁄(x.j)
(xiw⁄(x.w)) (2)
Where: C = RCA Figures, Xij = Export
value of commodity i country j, X.j = Total
export value of country j, Xiw = Value of
export of commodity i world, and X.w =
Value of total world export. An index
smaller than one indicates a decrease in
RCA. The performance of commodity
exports from country j experienced a
relative setback compared to the world
average export performance. Conversely,
an index greater than one indicates that the
export of commodities / from the country;
increased relative to the world average, so
that its share in the world market is
increasing (Rahmansyah et al., 2021).
RCTA (Revealed Comparative Trade
Advantage)
RCTA sees the relative performance of
exports compared to imports. The RCTA
formula is as follows:
RCTA = RXA_ia - RMP_ia
RXA_ia = (X_ia / X_i(w-a) )/[〖X(k-i)〗_a/〖
X(k-i)〗_((w-a)) ] (3)
RMP_ia= (M_ia / M_i(w-a) )/[〖M(k-i)〗_a/
〖M(k-i)〗_((w-a)) ]
The critical index of RCTA is RXA =
Revealed Export Competitiveness which
measures export competitiveness, and RMP
= Revealed Import Penetration which
measures the amount of import
penetration. A = country a, k = all types of
goods including I, w = world, X_ia, and M_ia
= exports and imports of goods I from the
government a, X_i(w-a) and M_i(w-a) =
exports and total imports of goods I from
non-countries a. 〖X(k-i)〗_a and 〖M(k-i)
〗_a = total exports and imports of other
goods, not I from countries a, 〖X(k-i)〗
_((w-a)) and 〖M(k-i)〗_((w-a)) = total
exports and imports of other non-I goods
from countries, not a. The provision of
RCTA is that the value of the RCTA index can
be smaller or more significant than 0. If the
RCTA index value is positive, it means the
country has high competitiveness.
Otherwise, if the RCTA index value is
negative, the government has no
competitiveness (disadvantage) towards
the product.
250 | Market Overview of Indonesia Copper Export Commodity (Case of Indonesia, Thailand,
and Japan Copper Exporting Countries In 2004-2018)
AR (Acceleration Ratio)
AR is used to see the trend of
commodity exports in exporting countries,
whether higher or lower than the average
trend in the export of these commodities in
the world (Veno et al., 2020), whether a
government can seize the export market (in
the sense that it can beat its competitors),
or its position is getting weaker in the
export market or the domestic market. AR
values are obtained using the following
formula:
AR = (〖Trend X〗_iJ+100)
(Trend M_ij+100) (4)
Where: X_ij is a trend or change in the
export of certain commodities of a country
(in%) in a certain period, and M_ij is a trend
or change in the import of certain things
(in%) in a certain period. If the AR value is
less than one, it shows that the growth of
an item in a country is lower than the
growth of the same commodity at the
world level. An article has a comparative
advantage if the AR is more significant than
one (AR> 1).
Greatly Claudia, Iman Murtono Soenhadji | 251
RESULTS AND DISCUSSION
Table 1. Descriptive Analysis
Source: UN Comtrade and Trade Map (2019)
The research results conducted by
(Malau, n.d.) show that Indonesian copper
is competitive in destination countries.
The research results conducted by (Ustriaji,
2016) showed that Indonesia's leading
commodities from these commodities
experienced a significant increase in
growth. The biggest contributor to these
leading commodities is palm oil, ranked
first with total export value in 2010-2014.
RCA calculations show that the oil palm,
forest products, footwear, cocoa, coffee,
rubber, and textile industries in 2010-2014
have competitiveness above the world
average.
The research results conducted by
(Bustami & Hidayat, 2013) showed ten
superior products of North Sumatra
province with different competitiveness.
Although some excellent products are not
competitive or have a weak competitive
position, the northern part of Sumatra
province still exports superior products.
Based on 15 years of observation,
namely in 2004-2018 for copper export
commodities (Copper Wire-7408), it can be
seen that the development of Indonesia's
copper commodity exports to the world,
for the highest Trade Value was in 2012 with
a value of 913,382,070 US $ and the lowest
in 2004 with a value of 302,600,030 US $.
While for the average value obtained is
632,164,436.6 US $. For Net weight, the
largest volume was in 2013 with
111,965,046 kg and the lowest volume in
2009 with 74,692,508 kg. The average
volume obtained was 96,459,641.6 kg. It
can also be seen that the development of
Thailand copper commodity exports to the
world, for the highest Trade Value was in
2018 with a value of 726,687,125 US $ and
the lowest in 2004 with a value of 3,239,465
US $. As for the average value obtained at
154,902,845.1 US $. For Net weight, the
largest volume was in 2018 with
106,208,281 kg and the lowest volume in
2004 with a total of 724,768 kg. The
average volume obtained was
0
500000000
1E+09
1.5E+09
2E+09
Total
Time
Development of Indonesia, Thailand, and Japan Copper
Commodity Export (Copper Wire-7408)
Trade Value (US$) Indonesia Netweight (kg) Indonesia
Trade Value (US$) Thailand Netweight (kg) Thailand
Trade Value (US$) Japan Netweight (kg) Japan
252 | Market Overview of Indonesia Copper Export Commodity (Case of Indonesia, Thailand,
and Japan Copper Exporting Countries In 2004-2018)
18,546,100.64 kg. In addition, for the
development of Japan copper commodity
exports to the world, the highest Trade
Value was in 2014 with a value of
490,284,828 US $ and the lowest in 2005
with a value of 239,623,632 US $. Whereas
the average value obtained was
363,398,216 US $. For Net weight, the
largest volume was in 2004 with 57,777,262
kg and the lowest volume in 2018 with a
total of 0 kg. Whereas the average volume
obtained was 36,277,133 kg.
Table 2. Summary of Research Results
Time
Indonesia Copper Export
Market
TSI
RCA
RCT
A
AR
2004
0,872
4,293
3,10
14,727
2005
0,876
4,276
3,59
15,526
2006
0,908
3,682
5,05
20,822
2007
0,834
3,742
4,47
11,113
2008
0,661
3,502
3,32
4,914
2009
0,739
3,521
2,87
6,687
2010
0,754
3,632
4,31
7,135
2011
0,795
3,313
4,36
8,786
2012
0,739
4,152
4,22
6,686
2013
0,804
4,111
4,03
9,226
2014
0,799
3,871
3,56
8,963
2015
0,785
4,348
3,40
8,314
2016
0,769
3,841
2,71
7,660
2017
0,800
3,309
2,81
9,039
2018
0,743
2,902
2,29
6,782
Avara
ge
0,792
3,766
3,606
9,741
Source: Data Processed, 2019.
Based on table 2, it can be concluded
that Indonesia has export potential for
copper (Copper Wire-7408) for 15 years of
monitoring, namely in 2004-2018. For
average results, Indonesian Copper TSI to
the world amounted to 0.792 (0.01 <0.792≤
0.8), which is by copper industry standards
in Indonesia, which produce large-scale
production and begin to increase its
exports. For the results of RCA, Indonesia
has an effect> 1 for 15 years in a row, which
means that Indonesia has a comparative
advantage, and its share in the world
market has increased in copper exports
(Copper Wire-7408). The RCTA results show
that Indonesia has positive index results
based on observations in 2004-2018, which
means that Indonesia has high
competitiveness (profit) against exports of
copper commodities (Copper Wire-7408).
Successfully exporting Indonesian copper
has AR> 1 results for 15 years in a row. It
can be interpreted that Indonesia can seize
the copper export market to the world
market, have high competitiveness, and
defeat competitive countries.
CONCLUSIONS
Indonesia had the highest copper
export value in 2012, is at a growth stage,
has a comparative advantage, increased
competitiveness, and has the opportunity
to seize the copper export market to the
world.
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© 2021 by the authors. Submitted for
possible open access publication
under the terms and conditions of the Creative
Commons Attribution (CC BY SA) license
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