Pandemic Covid-19 Impact on Indonesian Palm Oil Trade

Azwar Annas, Imama Nurus Izaati

Abstract


Palm oil in Indonesia still become one of the most valuable agricultural commodities to trade globally. Since the pandemic Covid-19, many countries treat their home with domestic mobility restrictions to protect their community. Moreover, many countries have reduced their international trade due to the fear of covid-19 infection from other countries. This condition leads to the decline of global GDP as well as the global trade for agricultural commodities. This study aims to analyze the impact of the Covid-19 pandemic on the palm oil trade as the biggest agricultural export commodity of Indonesia. This study uses the gravity model for international trade with Poison Pseudo Maximum Likelihood (PPML) estimation. The result of this study is based on two main products of palm oil, refined palm oil(RPO) and crude palm oil (CPO). The results show that the import of CPO significantly increases although the gross domestic of importing countries decreases. The variable of Covid-19 active cases in the importing countries shows a significant negative impact on RPO but a significant positive on CPO trade. It means that the CPO import will increase when the Covid-19 infection raise in importing countries. However, the Covid-19 active cases occur in the exporting country, Indonesia, only negative on CPO trade.

Keywords


covid-19 active cases; mobility restriction; gravity model

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DOI: http://dx.doi.org/10.52155/ijpsat.v35.1.4663

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