Demand Estimation for Indonesia's Rattan in Germany

Indonesia is one of the main producing countries of rattan. It dominantly supplied the world rattan trade among the producer countries. Indonesia has an advantage compared to other countries with its abundant supply of wild and cultivated rattan. A survey presented an estimation about 80 to 90 percent of the world's rattan raw materials come from this country. But, Indonesian government had applied totally export ban policy on rattan raw materials and semi-finished products since early 2012. Such policy was considered as an appropriate way to overcome the shortage of rattan materials supply for domestic industries and attempted to change Indonesia from a raw exporter become a finished-product exporter. This study examines the demand for Indonesia's rattan in Germany from 1991-2008 by using Transcendental Logarithmic as a tool. Germany is chosen since it is the most important country that has the high potency to become the rattan marketing in Europe. It is also the biggest importing country among European member countries and it can be considered as a competitive market. Based on our policy analysis, the export of rattan raw materials is still giving economic profit for Indonesia.