May 24, 2013

 

Indonesian government appoints Bulog to import additional beef

 

 

In order to help stabilise prices ahead of the Idul Fitri holidays, Indonesia's Agriculture Minister Suswono confirmed that the government has appointed Bulog to import additional beef.

 

The beef imported by Bulog will be outside this year's annual import quota, further raising questions about whether the government's plan for the country to be self-sufficient in beef by 2014 will only go up in smoke.

 

Suswono, who previously denied that there would be beef imports outside this year's quota, told reporters at his office on Wednesday (May 22) that the additional beef to be imported by Bulog would be calculated thoroughly to ensure that the imports would not exceed 15% of annual meat consumption.

 

By keeping the meat imports at 15%, the government's self-sufficiency programme would not be affected, he added. Under the national meat self-sufficiency programme, it is targeting to meet 90% of total meat consumption from domestic supplies.

 

 "The beef will be imported to help keep down prices to between IDR75,000 (US$7.65) and IDR80,000 (US$8.19). The additional import is aimed at supplying local markets in Jakarta and West Java," Suswono explained.

 

Deputy Agriculture Minister Rusman Heriawan said earlier that Bulog needed to import 2,000-3,000 tonnes of frozen beef starting this June to curb the surge of meat prices during the Idul Fitri holidays.

 

The price of beef, however, doubled during Idul Fitri last year from IDR40,000 (US$4.10) to IDR50,000 (US$5.12) per kilogramme to IDR75,000 (US$7.68) to IDR80,000 (US$8.19) per kilogramme due to the lack of supply.

 

The government allowed imports of 85,000 tonnes but it was insufficient to meet the surging demand. The government then allowed an import of 7,000 tonnes of beef from New Zealand to meet demands.

 

Despite the shortage, the government reduced the import quota to 80,000 tonnes in 2013 - comprised 32,000 tonnes of frozen beef and 267,000 head of livestock - or 14.55% of an estimated annual consumption of 549,700 tonnes.

 

The price of beef has stayed at around IDR90,000 (US$9.21) this year and the government released last month the import quota for "prime cut" meat - which is imported to supply hotel and restaurant industries - to help reduce the price.

 

Bulog chief Soetarto Alimoeso said recently that the agency estimated that it needed to import 28,000 tonnes in the second half of this year to effectively stabilise the price.

 

Soetarto, however, said that Bulog had to wait for the Trade Ministry - after the recommendation from the Agriculture Ministry - to allocate an import quota for the agency.

 

Rusman said that additional beef imports of between 2,000 and 3,000 tonnes would come from Australia. The series of moves to meet domestic supply and stabilise the price, however, have agitated breeders, who have questioned government determination to be self-sufficient in beef by next year.

 

Chairman of the Indonesian Cow and Buffalo Breeders Association (PPSKI), Teguh Boediyana, said that the move to import more beef simply showed how the government was inconsistent and undetermined to reach its 2014 beef self-sufficiency target, adding that such a move would generate losses to farmers who had already bought cattle in line with current prices to meet higher demand during Idul Fitri.

 

"The government is indirectly admitting that our country cannot be self-sufficient in beef by next year. It should check the data from the agricultural survey to continue with the programme," Teguh said.