Export Of Crude Palm Oil (Cpo) From Indonesia To Slovakia

STUDENT NAME: Andreas

COUNTRY: INDONESIA
STUDENT No.:

Thesis
In
International Economic and Trade
presented to the Graduate Faculty
of South China University of Technology
in partial fulfillment of the Requirements for the
Degree of Bachelor of Economics
2015
Supervisor of Dissertation
(Xiao Qi, Associate Professor , School of Economics and Commerce)

School of International Education

STUDY ON THE IMPACT OF EXPORTS IN SOUTH KOREAN ECONOMY (GDP)

Export Of Crude Palm Oil (Cpo) From Indonesia To Slovakia

COPYRIGHT STATEMENT

Copyright 2015

Andreas

This dissertation is submitted in partial fulfillment of a requirement for a degree in

International Economics and Trade is a property of the University. However, the author of
this dissertation owns and retains copyright of the dissertation without any further
registration.

ACKNOWLEDGEMENT

First of all, I would like to thank Almighty God who have protected and guided me all
through my stay in China and even in my studies, all the honor goes to Him.
My second gratitude goes to my supervisor Xiao Qi, She has been my inspiration, guide
and a lecturer. Her presence has been of help to me all through this year and especially in
writing this paper, I thank her from my heart for the work she has done to make sure that
this paper is a success.
My third and precious gratitude goes to my family, my Father and Mother who have
worked tirelessly to make sure that all I need is provided for the completion of my
studies. I really appreciate their contribution and prayers in my academic life through
hard and good times.

II

ABSTRACT

Export Of Crude Palm Oil (CPO) From Indonesia To Slovakia

Andreas

Abstract

Study Indonesian crude palm oil exports to Slovak year 2009-2012 is significant
increase the last three years as state exporter of Indonesian CPO and Slovak as
importer. CPO is superior product that has growth prospects for the industry bright
and can add income countries. CPO Indonesian market diversify into related Slovakia
because underlying economic crisis occurred in the middle Europian Countires.
Slovak as potential market to develop marketing strategies CPO in Europian Union
because the cost of accommodating and logistical cheaper than Rotterdam harbor in
Netherlands. The reason Slovak import CPO for domestic needs as food,
pharmaceutical, biodesel and quality of CPO because feedstock naturalness and lower
cholesterol than other vegetables oil resources. Another reason is improve the
friendship and bilateral cooperation Slovak and Indonesia. This Cooperation is
conducted two countries based the Memorandum of Understanding on Technical
Cooperation in the Field of Agriculture. To strengthen the cooperation, the two
countries seek to increase trade volume of CPO in 2011 6.620.000 kilograms became
8.619.240 kilograms in 2012.
Keywords: Indonesian, Slovak, CPO

III

TABLE OF CONTENT

Contents
COPYRIGHT STATEMENT.................................................................................I
ACKNOWLEDGEMENT...................................................................................II
ABSTRACT................................................................................................ III
CHAPTER ONE............................................................................................ 1
INTRODUCTION......................................................................................................... 1
AIM OF THE STUDY......................................................................................................... 2
CHAPTER TWO........................................................................................... 4
LITERATURE REVIEWS..................................................................................................... 4
The Concept Of Bilateral Relations.................................................................................4
The concept of international trade..................................................................................7
The theory of comparative advantage (Comparative Advantage).............................................8
Supply and demand Theory..........................................................................................9
RESEARCH METHODS.................................................................................................... 11
CHAPTER THREE.......................................................................................12
THE CPO PRODUCTION IN INDONESIA...............................................................................12
THE REASON SLOVAKIA IMPORT CPO FROM INDONESIA..........................................................14
Slovakia's domestic Needs.......................................................................................... 14
The quality or the quality of Indonesia CPO....................................................................16
Cultivate friendly relations Slovakia Indonesia..............................................................19
THE EXPORT OF INDONESIA CPO TO SLOVAKIA IN 2009-2012..................................................20
CONCLUSION............................................................................................24
BIBLIOGRAPHY.........................................................................................25

IV

CHAPTER ONE
INTRODUCTION
Palm oil plantations is one of the leading plantation sector in Indonesia is
experiencing a pretty rapid progression. From the year 2000 to 2009 development of the
vast area nearly double that at first 4.158.077 ha 7.125.331 ha and be accompanied by an
increasing number of production (Khudori, 2008).
The development of oil palm plant has been developed in several areas in Indonesia
and became the flagship crop plantations. This is due to oil palm plantation is a plant with
a fairly high economic value and is one of the plants producing vegetable oils. In addition
the development of palm oil plantations is also supported by derivative products Palm oil
that is multi-faceted and has many uses. According to Khudori (2008), currently
Indonesia is the country's number one producer of the world's largest CPO above
Malaysia and become the country's largest CPO exporter in the world.
Indonesia is one of the country's CPO producers. Entering the year 2012, the
commodity plantations into a commodity with a great potential and is promising for
Indonesia. With such a large potential for CPO, Indonesia also has a market share large
enough crude oil, both domestically and abroad. Some of the foreign markets to which it
was Indonesia's CPO India, China and the European Union, by absorbing 60% Indonesia
palm oil exports.
The European Union is one of the goals of market CPO Indonesia. The tejadi
economic crisis in several countries of Central Europe, such as France, the Netherlands
and Belgium led to a demand for CPO exports declined because of the tight rules against
Indonesia CPO products based in the port of Rotterdam, Netherlands. This led to the

Government of Indonesia to diversify markets through Eastern European countries that

are stable and the cost of accommodating the economic and logistic is cheaper than
Rotterdam (http://republika.co.id).
One of the Eastern European countries which import the CPO from Indonesia is
Slovakia. Slovakia top CPO demand Indonesia is based on an agreement between the two
countries which are listed in the Memorandum of Understanding on Technical
Cooperation in the Field of Agriculture or cooperation in the field of agriculture, signed
on January 18, 2009 in Dvory Nad Zitavou.
In 2011, Indonesia has to market their non oil and gas commodities to the European
market in particular to Central Europe and Eastern Europe. In which Slovakia agreed to
invest $ U $ 1 billion in some sectors or areas, including trading of CPO Indonesia. Such
cooperation is the development of a raw material that biodesel energy comes from
Indonesia's CPO and rubber (www.antaranews.com/).
Slovakia as a country of destination are important exporters of CPO Indonesia
because the country is the production base of the European countries. With per-capita
income is high, projected the economy will continue to experience an increase in
Slovakia and the country's influence in the EU is increasingly visible in the investment
sector of the economy and become Indonesia's CPO export markets of the European
Union (http://bisnis.news.viva.co.id).

Aim of the study

If the Government of Indonesia and Slovakia did the co-operation in the
production of CPO, the two countries will be able to benefit from such cooperation. As

for the goal of the research is to explain Indonesia's CPO export and Slovakia and explain
the reason Slovakia import CPO from Indonesia.

CHAPTER TWO
Literature reviews
The Concept Of Bilateral Relations
Relations between the Nations have long existed and continues to grow all the time.
Driven by the needs and desires that cannot be met alone then a country trying to convene
foreign relations with other countries in the concept of interaction relationship of
mutually beneficial cooperation. In international relations the interactions between
countries always takes place in two types, i.e. an extreme relationship conflict and
harmonious relationship of cooperation. The successive relationship types as time goes by
in the dynamics of international relations, but rather the relationship between the two
countries can make an impact that could be coloring the dynamics of international
relations.
According to the form of cooperation between countries is made up of bilateral
cooperation and multilateral cooperation. Bilateral cooperation refers to the relationship
of mutual influence between the two countries. While multilateral cooperation refers to
the relationship of mutual influence which is done by more than two countries. According
to the history of the development of State relations, bilateral cooperation is one form of
relationship between the oldest and the most countries already happened a long time ago,
before the existence of the agreement Westpalia 1648. Until recently, along with the rise
of multipolarism in international economic and political system, still felt the importance
of bilateral cooperation especially in creating a harmonious relationship.
Benefits to convene foreign relations with other countries is certainly better than
being confrontational with the countries. There is a difference of interests and foreign

policy of a country often become triggers of tension or even conflict between countries.
in international relations a relationship involving two States referred to bilateral relations.
This relationship includes several fields including economic aspects, political, military,
security and defense. Kusumohamidjoyo (1987) bilateral relations is defined as:
A form of cooperation between the two countries which are geographically close
together or far away across the sea with the main target to create peace by observing the
commonality of political, cultural, and economic structures.
So in bilateral cooperation between the two countries far apart are its geographical
location is no longer an obstacle which is pretty meaningless. An amazing development
has allowed all of it. The increasing interdependence between countries with one another
has made a distant geographical location is no longer a barrier which means. Relations
between the two countries can be done in various fields of human life such as;
Economics, politics, culture and military. The relationship will be established in
accordance with the specific objectives as well as the specific fields that serve a
benchmark for a country in its relations with other countries. In the relationship is
determined by the result of the interaction of the two countries in various fields.
Unsettled bilateral cooperation between the two countries is felt to be very
important, because a country cannot meet all its needs without cooperation with other
countries. The utilization of authorized capital of SDA (natural resources) in the
achievement of the goals and national interests it is absolute, but the limitations due to the
differences in geographical location, climate conditions and land area of the country is
inevitable. This is what is referred to as the "endowment factor" which is more of a God's
gift to the country.

A country in its interaction with other countries will refer to its own capabilities and
shortcomings. There is a country rich in natural resources but do not have the ability to
process, while on the other there is a country that is poor in natural resources yet to be has
the ability of technology to offer it, with the difference that the possibility to interact
within the framework of cooperation is very great, where the results of such cooperation
will bring extensive impact for the life of the country
The pattern of reciprocal interactions between the two countries in international
relations in bilateral relationships with select. Bilateral relations as a concept in
international relations, has a meaning that is more complex and more diverse and
contains a number of terms relating to the dynamics of international relations itself. In the
dictionary of international politics, bilateral relations simply described as, "... the
existence of a relationship describes the circumstances influence each other or the mutual
relations between the two parties (the two countries) (Didi, 1993)." This contains such
limits mean that bilateral relations are reciprocal relationships and interplay between the
two countries. There are some fields that include these bilateral relations, of which the
most common is the field of trade in social, education and culture, politics and even
Defense Security.
The term bilateral or bilateral relations is to assume a relationship between two
countries that are either close or far apart geographically as expressed by
Kusumohamidjojo (1987) on bilateral relations as follows; Bilateral relations is a form of
cooperation between the countries, either geographically or in adjacent far across the
seas, with the goal of creating peace by observing the commonality of political, cultural
and economic structures.

The concept of international trade

International trade is defined as an intercompany trade can or cross country that
includes export and import. (Sincere, Heartfelt Tambunan. 2001, pg.196). According to
Tambunan, international trade was split into two types, namely trade in goods (physical)
and services (non-physical). As for benefits and activities from international trade
include:
1. Helps explain the composition of trade between countries as well as the effect on
the structure of the economy of a country
2. Can indicate the existence of profits arising from such international trade.
Through international trade of a country's Government is attempting to optimize the
benefits of the relationship to the performance of the economy being better than the
previous. Several factors that can push the occurrence of international trade are:
a. each country cannot meet his needs its own
b. every State would have benefited from international trade compared its own goods
produced within the country
c. each State has the distinction of production costs to produce certain goods
d. each country has different natural resources.

David Ricardo, perfecting the theory of Adam Smith, and argues that inter-State
trade flows are determined by relative price levels (not absolute) of goods produced.
Countries tend to take specialization to produce commodities with a cheaper price
compared to its competitors. Thus, international trade is not a "a zero-sum game".

International trade based on "absolute advantage" only give advantage to one party only,
and is detrimental to another party. On the contrary, Ricardo showed free trade, through
specialization based on comparative advantage, giving an advantage to both parties the
culprit. (Robert Gilpin 1987, pg.172-174.)

The theory of comparative advantage (Comparative Advantage)

According to David Ricardo, international trade can basically provide benefits for
each country involved. Ricardo explicitly posited the theory of comparative advantage to
support his argument. According to David Ricardo, comparative advantages are the
hallmarks of a country or region in producing certain items in the social costs of
producing a country or region in producing such goods is lower than is done by State or
other area or otherwise exporting products that can be produced more efficiently than any
other country and importing manufactured goods that cost of production relative more
expensive (Tumpal Rumapea. 2000. pg. 75).
The difference in the potential of the natural resources belonging to each country
and each country will tend to specialized are also in production. Ricardo suggested that
should only products which have comparative advantages that are exported by the State
and instead the country imports goods which could not be produced at a low cost and is
not supported by other factors of production. Comparative advantage will be achieved if a
country is able to produce more goods and services with costs are cheaper than in other
countries. Comparative advantages possessed by each country tends to be dynamic. The
comparative advantages of each State-owned in a particular sector is potentially capable

and should maintain and compete with other countries, because the comparative
advantages change over with a factor that affected it.

Supply and demand Theory

The Law Of Demand
Demand is a large number of items requested in a particular market with a certain
price level at a certain income level and in certain periods. Some factors affecting
demand include: (among others Sukirno. 2006. pg. 83).
1. The price of goods is
2. The price of goods substitution
3. Item substitution
4. The average Income
5. Population/population
6. the Estimation/forecast/forecast
7. Taste, location and distribution.
Law of demand for an item related to the number of requests an item at a certain
price level. Consumers can determine the amount of goods consumed depends on the
price of the item. In General, the higher the price of an item, then the fewer number of
requests such an item. Conversely, the lower the price of an item, then the greater number
of requests for such goods, if other factors do not affect (cateris paribus). Such hypothesis
is referred to as the law of demand. Thus, the law of demand (law of demand) is the law
that describes the relationship between the price by the number of requests for an item

(cateris paribus) (wake up, Wilson, 2007. The Economic Journal, Volume XVI, number
3.)

The Law Of Supply

Quote is the number of goods offered by the seller on a specific market, in certain
periods, and at certain price levels. Wishes the seller to offer the goods at various price
levels are determined by several factors. The most important are: (among others Sukirno.
2006. pg. 110.)
1. The price
2. the prices of other goods
3. The cost of factors of production
4. Technology
5. The purpose of the company
6. Expectations (forecast)
Law of supply basically says that the higher the price of an item, the more the
number of such items will be offered by the seller. Conversely, the lower the price of a
item, fewer such items are negotiable.

Mechanism Of Demand And Supply

Variables related to the supply and demand of an item. The theory of demand
stating the nature of the goods to a purchaser's request, while the theory of the nature of
the States offer the seller in offering an item for sale. By combining the demand of buyers

10

and seller offer this may set a market price or equilibrium price and quantity of goods that
are bought and traded (among others Sukirno. 2002. pg.78.).

Research Methods
In this study the author uses descriptive research analytical type, i.e. give an
overview about the export of CPO Indonesia to Slovakia in 2009-2012. Types of data
used in this study is secondary data, and data collection techniques that writers use in
research is through library research that is based from the book and internet media. While
the data analysis Techniques used are qualitative content analysis method and study of
history that explains and illustrates the data on the basis of written sources that exist.

11

CHAPTER THREE
The CPO Production In Indonesia
Indonesia palm oil plantations are composed of three types of concessions of the
country estates, private estates and plantation. The production of palm oil in Indonesia
was recorded during 1970-2009, development of the vast oil palm plantations area of
Indonesia is rising quite high from 133,30 thousand hectares in 1970 to 7,51 million
hectares in 2009 or increased an average 11, 12% per year. When viewed from the
company status the average growth per year after the economic crisis in Indonesia in
1998-2009 is the Plantation (PR) only by State plantations 11,83% (PBN) of + 1.89% and
Private Estates (PBS) of 8.34% .
Domestic CPO consumption for most of the cooking oil used by the industry as the
main consumer of CPO in Indonesia. Distribution the use of CPO in 2006 was recorded
where for the purposes of export 4,84 million tons (30.25%) 9,705 million tons of
cooking oil (60,65%), the margarine and shortening 0,695 million tons (4.34%) as well as
oleo chemical 0,761 million tons (4,76%) is.
Demand for CPO to domestic needs to be embodied in a commodity of Palm
cooking oil strategic value because it is one of the nine basic commodities Indonesia.
Products produced from Palm oil capital intensity is vast and varied technology
In addition, domestic demand for CPO is also exported abroad due to an increase in
prices of CPO. As exporters prefer to export CPO CPO consumption related overseas
world increasing every year. Indonesia CPO buyers among others, India, Pakistan, China,
and Europe

12

The EU is one market destination of Indonesia's CPO where the exports as long as
it is based in the port of Rotterdam Netherlands. This decline CPO exports in the markets
of Western Europe and Central Europe because of the global economic crisis is
happening and increasingly tight rules of Central European countries to the products of
CPO and its derivatives. While the countries of Northern Europe and Eastern Europe still
remain accommodating. Some Eastern European countries that still require the CPO as
vegetable oils are Hungary, the Czech Republic, Ukraine and Slovakia.
Slovakia was the target of a potential CPO market due to the rapid economic
growth in the country. Slovakia's economic growth rose after the official was a member
of the European Union in 2004. The average economic growth in Slovakia in 2007-2008
its about above 8% per annum and the highest in Europe.
On January 18, 2009, Indonesia and Slovakia formally establish bilateral
cooperation with Indonesia in particular in the field of agricultural cooperation between
the two Nations, which Indonesia will import wheat seed from Slovakia, while Slovakia
will import the CPO from Indonesia. The cooperation the two countries stated in the
Memorandum Of Understanding On Technical Cooperation In The Field Of Agriculture
held in Dvory Nad Zitavou.
Bilateral relations in the political sphere RI-Slovakia during this also has no matter,
even showing a tendency towards increasing. At the international level of the two
countries have conducted mutually support the candidacy of membership in various
international institutions. Slovakia has been providing support to Indonesia to the election
of Ambassador Nugroho Wisnumurti as a member of the International Law Commission
the period 2007 2011, as members of the SECURITY COUNCIL are not fixed period

13

2007/2008, members of the UN HUMAN RIGHTS Council for the period 2007-2010,
Member of the Executive Board of the WHO period 2007 2010, Board member of the
International Maritime Organization (IMO) category C period of 2009 2011. Instead,
Indonesia also support Slovakia in a variety of ways, one of which is support for the
election of Slovakia as a member of the Executive Board of the United Nations
Educational, Scientific and Cultural Organization (UNESCO) 2009 2013.
In economic relations, trade and investment of the two countries have shown a
positive value. The value of trade volume of the two countries reached US $ 84.5 million
or increased by 15, 12% in 2010. The two countries have shown evidence that the
economic relations, trade and investment of the two countries is developing
constructively.

The reason Slovakia Import CPO from Indonesia

The reason Slovakia import CPO from Indonesia was seen from Comparative
Advantage based on economical and political reasons, namely: domestic needs and
quality of CPO Indonesia. For more lucrative import Slovakia CPO from Indonesia than
produce their own. In addition, the other reason is Slovakia maintain a friendly
relationship with Indonesia in the field of the State (political) and the wide range of
cooperation in the field of economics.

Slovakia's domestic Needs

Based on an increase in total export of Indonesia's CPO continues to experience
increased, Indonesia has a market potential of CPO in Slovakia. It is becoming one of the

14

alternative Government of Slovakia in maintaining the supply of CPO in imports to meet

domestic needs. CPO is a source of vegetable oil, which is priced more cheaply than
other vegetable oil sources, lower cholesterol, and high in carotene content.
In addition to the needs of the pharmaceutical, food and imports of CPO is also
used to meet the needs of biofuel that is utilized for its industrial diesel engines. In 2010
the use of biofuels of 5.75% and will continue to increase every year for transportation
needs (www.greenpeace.org). As a manufacturer of car industry is quite advanced,
Slovakia make use of CPO as raw materials and primary processing biodiesel is
developing in his country.
In addition to domestic needs, this CPO by Slovakia are also distributed to other
countries who are members of the European Union because that region is an area that is
developing advanced technologies in the field of diesel engines.
Biodiesel bioenergy as alternative fuel use as a replacement for FUEL on diesel
motor. Biodiesel can be used either in the form of 100% (B100) or mixed with diesel oil
at a certain concentration level (BXX) like biodiesel mixed with 10% 90% solar known
as B10. A mixture of biodiesel with existing solar market called bio solar (http://pphp.
MOA .gov).
Biodiesel utilized to reduce the consumption of basic material i.e. diesel, palm oil
and the distance of the fence. The making of biodiesel from vegetable oils is called
Transesterification which is the changing shape of one type into the other esters.
In this process it takes a catalyst to accelerate the reaction used ethanol and
methanol catalyst. Oil Palm seeds squeezed and filtered. From the CPO process can be
used for cooking oil, namely through the purifying it first. Because the original color of

15

CPO's dark whereas to be fuel, the CPO will be processed further in the
Transesterification process (http://www.slideshare.net).
As for some of the advantages of biodiesel as follows: (www.slideshare.net).
1. Biodiesel does not have poison, biodegerable, essentially free of sulfur and
carcinogenic benzene, produced from materials that can be updated, the source of
which can be recycled, there is an accumulation of greenhouse gases.
2. Specific fuel consumption 30% ME, only about 2% higher compared with pure
diesel. And the resulting power biodiesel lower average reach 118,000 Btu and
solar average 130, 500 Btu.
3. Devil's Number biodiesel higher compared to diesel. The average diesel biodiesel
53 while 42, so it can reduce the detonation on the operation of the machine.
4. Biodiesel is promising as material alternatively for motor diesel because of the
relatively low levels of smoke and high O2 content can reduce particulate
formation.

The quality or the quality of Indonesia CPO

In addition to domestic needs for food and non-food industry, Slovakia prefer
importing Indonesia CPO since geographically, Indonesia as a potential producer country
very or more supported by factors of production, namely the abundant raw materials,
tropical and has a fairly large area and convenient for producing good quality with CPO.
Slovakia import CPO associated with the quality or the quality of a Indonesia CPO.
Indonesia CPO is still considered to have its natural raw material and low cholesterol
compared to other vegetable oil sources as used in countries of Eastern Europe. CPO has

16

the advantage of quality good enough so that the product still required particular CPO
Slovakia.
Product of palm oil as a food ingredient has two aspects of quality. The first aspect
relates to the level and quality of fatty acids, moisture and dirt levels. The second aspect
relates to the taste, the aroma and the clarity and purity of the product. Prime-quality
Palm (SQ, Special Quality) contain fatty acids (FFA, Free Fatty Acid) not more than 2%
at the time of shipment. (http://www.kemenperin.go.id/).
Quality palm oil became a factor of consideration for Slovakia in conducting import
CPO from Indonesia. This is due to the cholesterol content of CPO from Indonesia is
lower than other types of vegetable oils such as sunflower oil and olive oil that has been
used both Slovakia and other countries such as Ukraine. Low content of cholesterol in the
CPO's main CPO became the basis of Indonesia in great demand in some Eastern
European countries such as Slovakia (http://www.ptpn5.com).
CPO sample of 178 factory oil palm (MCC) from all over Indonesia have been
evaluated in terms of: free fatty acids, dirt, and moisture content of carotene, DOBI and
iod number. Samples come from the province of Nangroe Aceh Darussalam, North
Sumatera, West Sumatera, Riau, Bengkulu, Jambi, South Sumatra, Lampung, Banten,
South Kalimantan, West Kalimantan, East Kalimantan, Central Kalimantan, Southeast
Sulawesi and West Sulawesi.
The levels of free fatty acids (ALB) on 3.15% Indonesia CPO sample, still far
below the maximum limit according to Standard National Indonesia/SNI (5%). The range
of the content of ALB in each province was below 5% according to SNI except for the
provinces of Lampung (4-97-5.34%), the 3.50-West Kalimantan (10,66%) and Central

17

Kalimantan (1,71-8.21 percent). Moisture and dirt on the sample in accordance with the
requirements of the SNI (0.5%) for even < all samples. Average moisture and dirt is
0.03% in the range 0.01-0,19%. Carotene content of the sample is the average of 554
ppm, still in a range that is in accordance with the Codex Alimentarius (500-2000 ppm).
About 16 MCC does not produce the above content with CPO 500 ppm.
CPO from West Sumatra and West Kalimantan on average contain carotene below
500 ppm, range on each 454-528 ppm and 396-577 ppm. Deterioration of Bleacheability
Index (DOBI) as the ratio of secondary oxidation products of beta-carotene
(spectrophotometer UV-VIS), is an important quality parameters in further use of CPO in
industrial refines and fraksionation.
Indonesia has not had a standard for parameter DOBI, but Malaysia recommend
produces a minimal 2.3 DOBI with CPO. Indonesia CPO sample DOBI still has lower
than 2.3 (an average of 2.24, range 0.9-3.0). An average of more than 2.3 DOBI found in
Nanggroe Aceh Darussalam, North Sumatera, Riau, East Kalimantan, South Kalimantan
and Southeast Sulawesi. Iodine number, same as DOBI also used for the benefit of plant
refines and fraksionation as it pertains to cooking oil yield is obtained. The average
number of iodine in samples is 51,10 (27.1-71,1 Range), relative compliance with the
minimum standards for manufacturers of cooking oil that is 51. When the number of
Iodine should be more than 51, about 19% of MCC did not meet these requirements
(http:////repository.usu. ac.id).

18

Cultivate friendly relations Slovakia Indonesia

Another reason Slovakia import CPO from Indonesia, was wish to maintain good
relations or bilateral friendly relations of the two countries in terms of politics and
economics. Slovakia imported CPO from Indonesia to develop the activity state of the
two countries.
Improvement of friendly relations and bilateral cooperation between Indonesia and
the Republic of Slovakia continues to be excavated and is enhanced by the two countries.
To improve friendly relations and bilateral cooperation. It also supported each other in
international activities included in the activities of the UNITED NATIONS proved that
the two countries have excellent bilateral relations, mutual understanding and mutual
need between the two Nations (www.indonesia.sk/wni/slovakia/cp-SLOVAKIA.pdf.).
Efforts to increase cooperation between the two countries is done through a State
visit, both from Indonesia and Slovakia where bilateral cooperation a priority in
improving the relationship of the two countries. For the cooperation of the two countries
through a wide range of areas, including the economy and politics. In the fields of
economy, trade and investment of the two countries have shown positive improvement.
Slovakia-RI formed a joint Commission as a forum to discuss efforts to increase
economic cooperation including cooperation in investment, finance, trade, agriculture,
tourism. In January 2009, Minister of Agriculture of the two countries have signed a
MEMORANDUM of UNDERSTANDING of cooperation in the field of farmer which is
a Memorandum Of Understanding On Technical Cooperation In The Field Of
Agriculture. (www.indonesia.sk/wni/slovakia/cp-SLOVAKIA.pdf.).

19

The export of Indonesia CPO to Slovakia in 2009-2012

Indonesia and Slovakia have established close cooperation in trade between the two
countries in various fields that include the import and export of goods. The establishment
of trade cooperation between the two countries can be seen through the total trade that
has been created between Indonesia Slovakia can be seen in table 1
Table 1 Indonesia Slovakia Trading (thousand USD)
2007
2008
2009
2010
Export
45.633,7
39.687,3
64.324,6
75.368,3
Import
11.099,4
23.580,2
9.064,1
9.117,8
Volume
56.733,1
63.267,5
73.388,7
84.486,2
Balance
34.534,3
16.107,1
55.260,5
66.250,5
Sheet
Source: Indonesia Ministry Of Trading (Data in thousand USD)

2011
54.395,0
11.556,2
65.951,2
42.838,8

Based table on the above, which looks quite important existence value of the export
trade of the two countries has increased every year, especially export value from the year
2008 only amounting to 39.687.3 USD into 64.324 .6 USD in 2009 this increase is quite
fantastic for country Indonesia. Experiencing an increase of 60%. In addition, Indonesia
trade balance for both countries continue to experience a surplus.
From the type of commodity exports to Slovakia, Indonesia CPO became one of the
leading commodity. The export of CPO is targeting Slovakia as the gate in Central
Europe and an increase in export by 20%. This increase in exports as well as to improve
the trade relations of the two countries are believed to export CPO marketing Indonesia to
27 countries in the European region (http://www.neraca.co.id). An increase in the value of
trade in CPO Indonesia Slovakia during the last three years can be seen in table 2

20

Table 2 The volume and value of trade in CPO Indonesia Slovakia over the period of
2010-2012
Years
Volume (Kg)
2010
4,941,862.00
2011
6,620,000.00
2012
8,619,240.00
Source: Indonesia Ministry Of Trading

Value (US$)
2,541,208.00
3,096,950.00
3,937,836.00

From the table above, it seems that the volume and value of trade in CPO Indonesia
in Slovakia is experiencing a significant increase in the last three years. In 2010, the
export volume amounted to 4.941.862.00 Kg and CPO export value amounting to,208
and 2,541 in 2011, the volume of exports of CPO export value amounting to 6.620.000.00
and 3.096.950.00 and in 2012 the export volume increased again to 8.619.240.00 and
CPO export value 3.937.836.
Based on the data of the Ministry of commerce trade value Indonesia CPO-Slovakia
over the period 2010-2012 continues to experience increased and progress. While the data
from the Ministry of economy of Slovakia, through August 2010, the value of trade of the
two countries reached 94,66 million Euro compared to the previous period which only
76,73 million euros. The value of Indonesia's exports in August 2010 reached 87,3
million Euro and the value of exports from Slovakia only 7.3 million euros
(http://www.neraca.co.id.)
Through trade cooperation Indonesia has done to Slovakia, indicating that
Indonesia working to optimize relationships become better economic cooperation through
the export of CPO. This is one of the trade policies pursued by the Government in the
market the CPO in Europe, especially in Slovakia. As for things that also affect this
policy include:

21

1. Slovakia is an alternative entrance in the market of CPO in European countries

especially in Central Europe. Although Indonesia is targeting growth of trade by 20%,
increased ties with Slovakia will provide larger profits, which made Slovakia an
alternative as a gateway to enter the EU market. This long to enter the EU market very
difficult especially related to standards and quality enhanced export target to Indonesia by
20% to Slovakia. (http://www.neraca.co.id).
2. Cost efficiency of logistics. If the export products of Indonesia made through
Slovakia, situated in the central part of Europe, Indonesia could get the cost efficiency of
logistics. If it is done through Bratislava, capital of Slovakia eight days faster than
through the port of Rotterdam in the Netherlands. Governments are working to produce
palm

oil

and

its

derivatives

could

enter

the

EU

through

Slovakia

(http://bisnis.news.viva.co.id/).
3. Slovakia as a potential market. In this respect Slovakia is an important country of
destination Indonesia CPO exporter because it is a European production base such as
automotive production base, electronic and technological biodiesel. Some European car
brand opens production base in Slovakia such as a. l. Volkswagen and Peugeot. With percapita income is high, it is estimated that the economy will continue to experience an
increase in Slovakia and the country's influence in the EU is increasingly visible in the
investment sector of the economy and become Indonesia's CPO export markets of the
European Union (http://bisnis.news.viva.co.id/).
An increase in the export of CPO Indonesia to Slovakia in 2009-2012 is having a
pretty good improvement and very beneficial for Indonesia. The export of CPO increased
due to the domestic needs of domestic food needs related to Slovakia (oleo food), the

22

pharmaceutical industry and the increasing production of automotive, electronic and

technology development of biodiesel. (http://bisnis.news.viva.co.id/).
CPO used as biofuels or biofuel because of CPO is considered as goods substitution
of crude oil in the world. An increase in the export of CPO is not separated from the
concept of bidding conducted by the Government of Indonesia based on the cost of
production

factors,

goals,

expectations,

and

the

price

of

technology

(http://www.stabilitas.co.id).
The world's CPO price as the goods substitution reached US $ 850 per ton increase
in related world crude oil price reached 1000 US $ per barrel in 2009. In 2010, the price
of CPO reached US $ 902 per ton in 2011 and reach US $ 1,170 per tons. CPO is referred
to as the goods substitution is associated as a biofuel that can be updated and the price is
cheaper while the crude oil that comes from the fossils cannot be updated and the price is
also more expensive. In this regard, Indonesia's flagship CPO into commodities as the
country's manufacturers offering CPO to Slovakia.

23

CONCLUSION
From the discussion above, there are a few conclusions drawn, namely:
1. The export of CPO Indonesia to Slovakia continues to increase every year.
Economically, it is influenced by the needs of domestic consumption of Slovakia
where CPO used for needs of biodiesel, foodstuffs and pharmaceuticals.
2. This increase is also affected by the quality or the quality of Indonesia's CPO
good enough because its natural raw material and the content of cholesterol lower
CPO compared to other vegetable oil sources as well as interest in Eastern
European countries.
3. Other reasons is the economic and political reasons that Slovakia's interests to
maintain the bilateral relations of the two countries in the field of the Union as
well as an increase in cooperation in trade, investment and more.

24

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