The Impact of Outside Factors on North Sumatra Arabica Coffee Exports to International Markets
DOI:
https://doi.org/10.25186/.v21i.2460Abstract
Arabica coffee is one of North Sumatra’s leading export commodities. Global economic dynamics and fluctuations in macroeconomic indicators have the potential to influence its export volume. The objective of this study is to analyze the impact of macroeconomic variables on the export volume of North Sumatra’s arabica coffee to its four main destination countries. This study uses secondary data from various official sources. The analysis method employs panel data regression using the Common Effect Model, Fixed Effect Model, and Random Effect Model approaches. The results show a coefficient of determination of 0.8501. The variables of international Arabica coffee prices and the exchange rate of the importing country’s currency against the rupiah have a positive and significant effect on Arabica coffee export volume, while the gross domestic product (GDP) of the importing country shows a negative and significant effect on Arabica coffee export volume. These results indicate that increases in global prices and the appreciation of the export destination
country’s currency drive an increase in Arabica coffee export volume, while the economic growth of the importing country does not have a positive impact on the demand for Arabica coffee from North Sumatra, Indonesia. The implication of this study is the importance of monitoring global prices and the appreciation of the export destination country’s currency in order to increase Arabica coffee export volume.
Key words: Coffee prices; exchange rates; gross domestic product; panel regression.
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