ANALYSIS OF INDONESIA’S PEPPER IN THE SUPPLY AND DEMAND

Abstract

Indonesia is second biggest producer and exportir of pepper commodity in the world. The purposes of this research are: (1) to analyze of Indonesian pepper in the supply and demand; (2) to analyze the impact of exchange rate, price of world pepper, and combination among its to Indonesian pepper in the supply and demand. Analysis method used simultaneous equation with time series data from 1990 till 2013. The results showed that determinant coefficient (R2) of every equations are 0,51 till 0,86 and F value are 4,67 till 20,16. Indonesian pepper production significantly influenced by real price of Indonesian pepper, Indonesian pepper export, real interest rate of Indonesia, and Indonesian pepper production last year. Indonesian pepper demand significantly influenced by Indonesian population. Indonesian pepper export significantly influenced by growth of Indonesian pepper demand and Indonesian pepper export last year. Indonesian pepper price significantly influenced by Indonesian pepper production, real exchange rate of IDR to USD, inflation rate of Indonesia, and Indonesian pepper price last year. Real price of Indonesian pepper isn’t responsive to Indonesian pepper production in short run and responsive in long run. Indonesian population is responsive to Indonesian pepper demand in short run and long run. Other exogenous variables aren’t responsive to endogenous variable in short run and long run. The exchange rate depreciation, the increase price of world pepper, and combination among its impact to increase of Indonesian pepper price, export, and production and degradation of Indonesian pepper demand. Development of pepper agroindustry must intensively to improve domestic demand and give economic value to pepper commodity.