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Adiyoga, W., K.O. Fuglie, and R. Suherman. 2001. Potato Marketing in North Sumatera and an Assessment of Indonesian Potato Trade. UPWARD Working Paper Series No. 7. CIP-UPWARD, Los Banos, Laguna, Philippines. 31 p. |
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ABSTRACT |
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Potato production and prices in Indonesia are linked to the global economy through international trade. Indonesia exports of fresh table potatoes rose steadily for more than a decade before peaking in 1995 at 103,000 tonnes, or about 10 percent of national potato production. Exports have since declined by more than two-thirds from their peak. |
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This paper examines trends in potato trade in Indonesia and the system of export marketing in North Sumatera. It is in small farms in this province in Indonesia where nearly all potatoes grown for the country's export market are produced. To gather data and information, the authors used a rapid market appraisal methodology, including semi-structured interviews with key informants and analysis of secondary market data. Potato marketing channels, cost and margins were also assessed. |
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The marketing systems appeared to be competitive and functioned with relative efficiency. Interviews with potato traders in the major import destination of Singapore revealed that Indonesian potatoes are preferred for their freshness, taste and source proximity. Declining price competitiveness was identified as the most important factor to explain the loss of Indonesia's market share in the Singapore and Malaysian potato markets in recent years. Factors contributing to the decline in competitiveness in international markets are (i) high cost of potato production, (ii) growth in domestic demand, and (iii) increased international competition. The devaluation of the Indonesian products and slowed the downward trend in potato exports. The economic crisis in Indonesia also sharply reduced demand for potato processed products (French fries for fast food restaurants), which are supplied mainly through imports. |
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