International Journal of Scientific and Research Publications, Volume 6, Issue 9, September 2016 478 ISSN 2250-3153 www.ijsrp.org Determinant Analysis for Rubber Export in Indonesia MirawatiYanita M. Yazid; ,ZulkifliAlamsyah, Andy Mulyana Department of Agribusiness, Faculty of Agriculture Sriwijaya University, Padang Selasa Street No. 524 Palembang 30139, Indonesia Abstract- Rubberis one of theplantationcommoditieswhich havea rolequite important ineconomic activitiesinIndonesia. Rubber provides the main livelihood for over one million families and more than two third of all production comes from smallholders. Rubberis alsoone of Indonesian export commodities asa foreign exchange earnerin thecountryoutsideoil and gas.Approximately86.95percentof Indonesia's naturalrubberproductionis exportedto foreigncountries andonly a small portionis consumeddomestically. This research aim to asses the determainant for rubber export in Indonesia. We use Stata software and estimate the variables by robust regression, Result showed a significant relation between production level, exchange rate and export quantity in the lag time. Indonesia earned substantial foreign exchange from crumb rubber exports. However, major fluctuations in the export earnings have raised concern about the country’s future growth potentials and self- sustainability. Index Terms- Rubber, Determinant , Export, Indonesia I. INTRODUCTION ubberis one ofthe commodities thatserve asthe raw materials forstrategies industry. In general, developing countries become producer ofnatural rubberfrom plantationsbelong to smallholders, stateand private. While consumersof naturalrubberis theadvanced industrializedcountries.Natural rubberconsumptioncontinues to increase alongwithdemand inthe industrial sectorwith rubber raw materialssuch asrubberballs,yarn, gloves, tires andcatheters. Indonesia is the second largest producer of rubber and represent as one of commodity export which having big enough contribution for state's stock exchange. Rubber is a major export commodity supporting the Indonesian economy. More than 1 million households now depend on rubber as their main source of income. Smallholder rubber constitutes 83 percent of the total Indonesian rubber area (3.5 million ha) and 68 percent of total rubber production. Where smallholder rubber systems often are called jungle rubber (Gouyon et al. 1993; Williams et al. 2001) The growth of natural rubber production in Indonesia is about 6.3 percent per year. The production estimate is not only because the growing demand of world market, but also because of growing attention on high yielding clonal rubber and positive externalities brought about by agroforestry system in natural rubber production. For more than a 90 percent share of Indonesian rubber to fulfill the export market, so Indonesia could play a very important role in the international market. Similarly, there are growing concerns among the rubber community to develop domestic markets. In The majority (about 84 percent) of rubber producers in Indonesia is smallholder growers and concentrated mostly (more than 72 percent) in five production centers: North Sumatra, Jambi, Riau, South Sumatra and West Kalimantan. The rubber-based industrial development is obviously related to many segments of economic policy, including the technological advancement, information system and financial institutions and legal issues and enforcement structures in general. Therefore, the development of domestic rubber industry needs more strategic approach and policy to better support a high quality of economic recovery in the country. (Arifin, 2005) At present, the competition among rubber exporters is becoming more intense. In order to increase rubber production, the Indonesian government is promoting the expansion of rubber growing area and partnering with strategic alliance in the tire industry to spread best practices in the cultivation of rubber among its smallholders. Consequently, Indonesia will become a more competitive player in the near future. Vietnam, India, and China are also producing a larger share of the world’s total rubber output as opportunities for exporting grow with increasing trade liberalization. Free trade agreements (FTAs) will further create opportunities for rubber industry to expand into new markets. Given this backdrop,the whole objective of this paper is to explore rubber behaviour from the export side, because for the last one year the price of rubber falling down, hence of entering new player producer from Indochina like Vietnam, Laos and Cambodia. Our study is also related to recent studies using firm level data to examine the effect of exchange rate on exports. For example, Dekle, Jeong, and Ryoo (2008) use panel data of Japanese exporters for the period of 1982-1997 and find the exchange-rate elasticity of export to be statistically signicant and have a value of 0:77. Drawing on French firm-level data for the period of 1995-2005, Berman, Martin, and Mayer (2012) uncover the heterogeneous reaction of exporters to real exchange rate changes: high-performance exporters increase more their markup but less their export volume in response to a currency depreciation. In particularly, this study therefore aims to examine the factors that can influence the export of crumb rubber with the following specific objectives: 1. Estimate the factors influencing the crumb rubber export trade. 2. Profer some policy recommendations based on the findings of this investigation. II. LITERATURE REVIEW International trade is the exchange of goods and services across national boundaries. It is the most traditional form of T