• Energy Research

Despite having a strong production capacity for fresh coconut, Indonesia has a certain deficiency in coconut processing, particularly coconut oil products, which is reflected in the declining market demand rates. The skyrocketing price of palm kernel oil (PKO) had been observed to impact the shifting demand for coconut oil. The cross-price competition with PKO was estimated to uncover the potential market demand for Indonesian coconut oils, especially during the periods of price discrepancies between 2020 and 2022. Thus, our study aimed to analyze the Indonesian coconut oil and palm kernel oil (PKO) market relationship as the markets reacted during the period of price volatility. This study is essential for Indonesian market evaluation, as both commodities are considered to be perfect substitute goods and are similar substances that contain high levels of lauric acid called “lauric oils”. We deployed an ARDL analysis utilizing secondary data from 1964 to 2022, focusing on the cross-price elasticity between coconut oil and PKO prices with the addition of prominent concerned variables. In the long-term estimations, the observational results indicated that the coconut oil and PKO prices had distinctive impacts on Indonesian coconut oil exports of −1.85% and 1.88%, respectively. In the short-term estimations, we found inverse values: the coconut oil price had positive impacts in the short-term period of 1.29% (D1.) and 2.35% (LD.), while the PKO had a negative impact on Indonesian coconut oil exports of −2.17%. This indicated that a PKO price reduction would increase the demand for Indonesian coconut oil exports due to the PKO price volatility and uncertainty perceived by the buyers in the short term. Our study also observed that rival producers, such as the Philippines, had a negative impact (−1.80%), representing the intense competition between Indonesia and the Philippines. Therefore, the Indonesian government has to elevate its coconut oil competitiveness to acquire the potential to expand the market and compete with other major coconut-producing countries.

Asian countries have abundant resources of natural fibers, but unfortunately, they have not been optimally utilized. The facts showed that from 2014 to 2020, there was a shortfall in meeting national demand of over USD 2.75 million per year. Therefore, in order to develop the utilization and improve the economic potential as well as the sustainability of natural fibers, a comprehensive review is required. The study aimed to demonstrate the availability, technological processing, and socio-economical aspects of natural fibers. Although many studies have been conducted on this material, it is necessary to revisit their potential from those perspectives to maximize their use. The renewability and biodegradability of natural fiber are part of the fascinating properties that lead to their prospective use in automotive, aerospace industries, structural and building constructions, bio packaging, textiles, biomedical applications, and military vehicles. To increase the range of applications, relevant technologies in conjunction with social approaches are very important. Hence, in the future, the utilization can be expanded in many fields by considering the basic characteristics and appropriate technologies of the natural fibers. Selecting the most prospective natural fiber for creating national products can be assisted by providing an integrated management system from a digitalized information on potential and related technological approaches. To make it happens, collaborations between stakeholders from the national R&D agency, the government as policy maker, and academic institutions to develop national bioproducts based on domestic innovation in order to move the circular economy forward are essential.