THE IMPACT OF IMPORT LIBERALIZATION POLICY ON INDONESIAN SOYBEAN IMPORTS

Abstract

Indonesian soybean consumption is on the rise, meanwhile soybean production is decreasing, leading to a continuous increase in imports to meet the growing demand. This study aims to (1) assess the trend of soybean imports in Indonesia and (2) identify the factors influencing soybean imports in the country. The research relies on secondary data in the form of time series data spanning from 1991 to 2020. The fundamental methodology employed in this study is quantitative descriptive analysis. The analytical approach adopted is ordinary least squares (OLS), utilizing simple linear regression to discern the trend in soybean imports and multiple linear regression to pinpoint the factors impacting soybean imports. The findings reveal that Indonesian soybean imports exhibit an average annual increase of 72,628.82 tons. Partially, GDP demonstrates a positive and significant influence on the volume of Indonesia's soybean imports. The volume of soybean imports in Indonesia posts the implementation of the import liberalization policy in 1998 surpassed pre-policy levels. Conversely, the exchange rate of the United States Dollar against the Indonesian Rupiah has a negative and significant impact. Additionally, soybean productivity and US soybean producer prices have an insignificant effect on the volume of Indonesian soybean imports.