An Empirical Study on Indonesia’s Participation in the Global Rubber Value Chain

Shinta Agustina Dwi, Nurmalina Rita, Fariyanti Anna and Burhanuddin

Research on World Agricultural Economy, 2025, vol. 6, issue 4

Abstract: Rubber is a key plantation commodity with extensive markets in global trade and a significant contribution to Indonesia's economy. Over the last decades, the development of Indonesia's natural rubber value chain has been hampered by several national and international problems, which have affected Indonesia's position and participation in the global rubber trade. This study utilizes two datasets from the Multi-Regional Input-Output (MRIO) of the Asian Development Bank (ADB) databases to assess Indonesia's participation and position in the international rubber industry value chain between 2015 and 2022, then compares the results with 35 countries trading with Indonesia. The analysis reveals that compared to 2015, Indonesia’s 2022 position in the global rubber value chain declined due to weaknesses in the upstream and downstream sectors. While it continued to contribute to the global rubber market, Indonesia was consistently outperformed by other rubber-producing countries. Indonesia can yet increase the rubber industry's added value by promoting innovation and increasing domestic production. This paper concludes with policy recommendations for Indonesia to enhance its participation in the global rubber value chain, emphasizing improvements in the downstream sector by adopting good agricultural practices and applying advanced technologies, and strengthening the upstream sector by boosting domestic consumption of rubber.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:reowae:412831

DOI: 10.22004/ag.econ.412831

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