August 12, 2015

Having previously announced a sharp reduction of import permits for live cattle in the third quarter of 2015, Indonesia now allows more permits which will raise import to an overall 100,000 animals.

The government had initially capped cattle import numbers at 50,000 in Q3, a drop from 250,000 in the second quarter.

The decision, which came early this week, is made in response to rising beef prices as well as protests from butchers and consumers. The move determined that "slaughter" cattle are delivered and must be ready immediately for abattoirs.

Australia usually exports "feeder" cattle to Indonesia, the Sydney Morning Herald reported. Such animals are kept in feedlots for six to nine months before slaughter.

Indonesia had recently introduced a new regime in which Bulog, the country's national logistic agency, will be the sole manager of new beef import licenses, excluding involvement of the private sector. Apparently, the government is concerned of price manipulations by local importers and feedlot owners exerting considerable influence over supply.

However, the arrangement also conflicted with regulations which called for complete control over the entire supply chain by Australian cattle producers. These regulations were established following past allegations of animal mistreatments in Indonesian abattoirs. 

Back in Indonesia, beef prices rose up to about US$11.05/kg, beyond the usual price of US$6.63. As a result, protests by butchers ensued, with fingers pointing to importers for inducing the increase.