February 29, 2008

Indonesian meat traders calling for boycott of Australian beef

The rising Australian dollar has made it pricier for Indonesian companies to buy Australian beef, leading to a call for a boycott of Australian beef by Indonesian meat traders.

Indonesia buys more than 90 percent of Australia's live export cattle.

Hundreds of merchants targeted feedlots in the nation's capital Jakarta to protest against the high price of imported red meat recently.

Indonesia has the option of allowing beef from India and South America to diversify its meat sources, but so far the government has not acted upon it.

Currently, Indonesian feedlots are selling beef at a loss due to the high prices Australia charges for its cattle.

As Australian beef in Indonesia retails in wet market in small portions, it is extremely price sensitive.

However, if demand heads down due to high prices, more cattle would come on the market to drive down its price, analysts said.

Even as market commentators say there is rising demand for protein in Indonesia, there is very little money to buy that protein. Still, they have ruled out a boycott of Australian meat based just on high prices.