Indonesia Coffee Export Performance to the Primary Destination Countries

Coffee is a key plantation-sector commodity in Indonesia, playing a critical role in the national economy. This study examines the determinants of Indonesia’s coffee export performance across eight major destination countries: the United States, Germany, Malaysia, Italy, Russia, Japan, the United Kingdom, and Belgium. Utilizing 33 years of secondary time-series data (1992–2024), panel data regression was analyzed using the Chow, Hausman, and Lagrange multiplier tests to determine the most suitable model. Subsequently, classical assumption tests (multicollinearity, heteroscedasticity, and autocorrelation) were conducted, followed by statistical tests (F-test, t-test, and determination coefficient). The results indicated that the Random Effects Model (REM) was the most suitable in this study. The REM regression reveals that a one-unit increase (of 1,000 US$ and US$/lb) in Free on Board (FOB) and Indonesia’s Coffee Prices (ICP) raises Indonesia’s coffee export volume by 0.2117 and 1312.4875 tons. The coefficient of determination showed that 12.56% of the variation in Indonesia’s coffee export performance to eight destination countries is explained by the Rupiah Exchange Rate (RER), Free on Board (FOB), Gross Domestic Product per capita (GDPc), Indonesia’s Coffee Prices (ICP), and Indonesia Coffee Yield (ICY). The t-test indicated that FOB and ICP as the key drivers of coffee exports performance. To enhance coffee export volumes, the government and relevant stakeholders should strengthen the global branding of Indonesian coffee, address trade barriers, and leverage existing trade agreements to enhance long-term FOB values. The Indonesian government can boost domestic coffee prices (ICP) through initiatives like cooperatives, financial aid, and specialty coffee promotion. Policy reforms are crucial to tackle low financial literacy and market volatility. Enhancing infrastructure, market access, and support can stabilize prices and improve farmers' livelihoods.