Mathematical Modeling and Regime Dynamics of Ammonium Chloride Imports in Indonesia Using Threshold Vector Autoregressive Integrated (TVARI) Approach

Abstract

Ammonium chloride plays an important role in Indonesia as a key raw material for NPK fertilizers and chemical industries. Despite its importance, domestic production remains limited, and potential supply from by-product sources has not been utilized effectively. Consequently, Indonesia depends heavily on imports sourced mainly from a single country. This situation creates vulnerabilities in industrial supply chain and highlights the need for a clearer understanding of import volume and value dynamics.
This study employs a Threshold Vector Autoregressive Integrated (TVARI) model to capture nonlinear and regime-dependent adjustments in the joint dynamics of import volume and value, with import volume growth as the threshold variable. The approach's novelty lies in its ability to accommodate structural changes that cannot be adequately represented by a single linear specification. Empirical results identify two statistically distinct regimes defined by whether import growth lies below or above an estimated threshold. In the first regime, where growth is below the threshold, short-run dynamics are primarily driven by changes in import value, indicating price-related adjustments. In the second regime, import volume exhibits stronger responses, reflecting quantity adjustments associated with supply-side conditions. These findings demonstrate that linear models are insufficient to capture asymmetric adjustment mechanisms in import behavior. By providing a formal mathematical description of regime-dependent dynamics, this study contributes to a deeper understanding of Indonesia’s industrial import structure and offers insights for data-informed supply chain planning. The results support policy discussions related to Sustainable Development Goals 8 (economic stability), 9 (industry resilience), and 12 (responsible consumption and production).