The Effect of Cocoa Bean Export Duties on The Export of Processed Cocoa Products in Indonesia Evidence from Cocoa Powder

Export Duty Cocoa Powder Export Industrial Downstreaming Error Correction Model

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August 6, 2026
October 15, 2026

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Export duties on raw materials are widely used to promote downstream industrialization, yet their effectiveness in supporting processed exports remains debated. This study evaluates the effectiveness of cocoa bean export duties, international cocoa prices, and domestic production in influencing cocoa powder export performance using an Error Correction Model (ECM). The analysis employs 83 time-series observations from Statistics Indonesia and the Ministry of Trade. The results show that export duty rates have a negative and significant effect on cocoa powder exports, while prices have positive and significant effects. The error correction term (–0.6352) is significant at the 1% level, suggesting that 63.5% of short-run deviations are corrected each period. The findings indicate that export duties may constrain processed cocoa exports when industrial capacity remains limited. The study provides empirical evidence on export duties and offers policy insights for designing downstream industrialization policies.

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