<![CDATA[Italy ranks as the world's third-largest importer of coffee, following the United States and Germany, accounting for approximately 7.9 percent of global coffee imports on average. Identifying the factors that influence Italy's coffee import demand is therefore strategically relevant for coffee-exporting nations, including Indonesia, particularly in developing market-entry and market-expansion strategies. The present research forms part of a broader econometric simultaneous-equation framework for the global arabica coffee market, which incorporates 18 structural equations and 6 identity equations. The model is estimated through the Two-Stage Least Squares (2SLS) approach using annual time-series observations from 1981 to 2018. Rather than discussing the full system, this article focuses on a single structural equation identified as the most statistically robust among the eighteen structural equations: the Italy coffee import equation, which produced the highest coefficient of determination (R² = 99.07%; Adjusted R² = 98.76%) with a highly significant F-test (F = 318.74; p < 0.0001) and no indication of serial correlation (Durbin-Watson = 1.94). The estimation results show that Italy's coffee import volume is significantly and positively influenced by domestic coffee consumption and population size, while price-related variables (the world arabica-robusta price ratio, changes in world robusta price), Italy's GDP, the exchange rate, and coffee stock ratio are not statistically significant. These findings indicate that Italy's coffee import behavior is driven primarily by domestic demand fundamentals rather than short-term price signals, suggesting that exporting countries should prioritize reliability of supply and long-term partnership over price-based competition when targeting the Italian market.]]>
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