May 8, 2008

 

Indonesia to import more beef as population grows 

 

 

Australian beef exports to neighbouring Indonesia could rise rapidly in response to rising demand stoked by a growing population and higher incomes, agribusiness bank Rabobank said in a report.

 

Australia, which has already seen its beef exports to Indonesia treble in the past three years, was suitable placed to supply growing demand in the Indonesian market, the bank said.

 

At present levels of beef consumption of 1.71 kilogrammes per capita, Indonesian population growth could add around 45,000 tonnes by 2015, senior Rabobank analyst Wendy Voss said in the report.

 

Indonesia's population is forecast to rise 13 percent between now and 2015.

 

Australia and New Zealand have roughly equal shares of Indonesia's rapidly-growing beef import market.

 

In 2006, Indonesia imported 24,000 tonnes of beef, sourcing 10,000 tonnes from Australia and 14,000 from New Zealand, Indonesian figures show.

 

Latest available figures show that in the 9 months to September last year, Indonesia imported 30,000 tonnes, with 16,000 tonnes provided by Australia and 14,000 by New Zealand.

 

Australian beef exports to Indonesia have grown to 26,789 tonnes in calendar 2007 from 8,762 tonnes in 2005, Australian figures show.

 

Continued growth in the Indonesian economy is expected to support further increases in beef consumption.

 

Indonesian economic growth was expected to continue, with per capita GDP forecast to rise by 6.9 percent in 2008 to US$1,951, Voss said.

 

In contrast to developed countries, where food accounts for approximately 15 percent of total household spending, over 53 percent of all expenditure in Indonesian households goes to food, Voss said.

 

However, rising inflation could deter growth in imports. Competition from Brazilian beef and Indian buffalo meat could also arise if Indonesia lifts current bans on meats from these countries, she said.