May 21, 2012

Indonesia's local beef prices up 20%

Indonesia's local beef prices have gone up by 15-20% through 2012 as it also occurs in the prices of beef in the import industry.

 "The prices continued to go up since the first quarter, contrary to the usual trend where they tend to decrease at the start of the year," said Asnawi, Vice Chairman of Information of All Indonesia Beef Traders Association on May 16.

Asnawi said that the current beef prices range between IDR75,000 (US$8.13) and IDR80,000 (US$8.68) per kilogramme, increased from last year's IDR65,000 (US$7.05) per kilogramme. The hike is caused by rising price of live cattle, which now costs IDR29,000 (US$3.14) per kilogramme. Last year it ranged between IDR25,000-26,000 (US$2.71-2.82) per kilogramme. "The price per head of cow has gone up to IDR1.5-2 million (US$162.7-216.9)," Asnawi said.

He also explained that the rise is also due to decreasing supply of meat cows brought on by cut in live cow import quota and disruption in transport of cattle from regions to cities. "The economic growth has increased, so is the demand for beef, but the source materials have decreased. So the prices finally went up," he said.

He said he understands the rationale behind the ministerial decree to curb import which was based on cow and buffalo census indicating that the domestic supply is enough to fulfil the demand. However the association urged the government to improve the cattle transport facilities. "The regions need transport facilities to distribute their supplies."

Last year the government set live cow quota at 600,000. This year it has been reduced to 283,000. The cut was based on meat and dairy cows and buffalo census conducted by Statistics Agency in 2011 which recorded 14.8 million cows in Indonesia. However the scattered cow population means hiccups in supply due to logistics issues.