September 3, 2010

 

Indonesia halts Brazilian beef imports over FMD

Any immediate prospect of Brazilian beef exports to Indonesia appears to have disappeared, following an Indonesian Supreme Court ruling in favour of limiting importation to FMD-free countries only.

 

In recent months it appeared likely that Indonesia was going to accept a zone-based FMD status for Brazil, allowing beef imports from those Brazilian states declared disease-free. Processing plant approvals and import permits were understood to have been issued in expectation of a relaxation in the trade access.

 

However, the Indonesian Supreme Court on Friday (Aug 27) handed down its ruling in a long-running judicial review over changes listed in a ministerial decree pertaining to beef imports from FMD-free zones, rather than country-based classification.

 

The court declared that the law was to be overturned and reverted to the original content, which directs that imports of beef must be from FMD-free countries only. The result means that Indonesian import permits issued earlier for Brazilian meat are now invalid.

 

Observers say this is a success for the coalition of industry associations including vets and cattle farmers in Indonesia who took up the fight against zone-based trade access on the basis of disease risk and other grounds. Brazil's limited ability to trace cattle movements from one state to another was central to their argument.

 

Increasing evidence is now emerging that the Indonesian beef industry is coming under considerable stress as a direct result of recent limitations imposed on Australian live cattle imports.

 

One report this week suggested there are currently 140,000 cattle on feed across the country - about 50% of industry capacity, and easily the lowest level of utilisation since the days of the Asian currency crisis in the late 1990s. That situation has been worsened by the substantial investment in feedlot infrastructure expansion over the past three years.

 

Finished cattle prices are continuing to rise, and as local breeding cattle are being sold as well, there is increasing pressure on Indonesia's Ministry of Agriculture to find a solution.

 

The last time Indonesian cattle imports declined significantly during the Asian currency crisis, the nation rapidly liquidated its own cattle herd, including breeders and dairy animals, Cattle Council of Australia executive director David Inall said.

 

Commenting on Friday's Indonesian decision to reject any prospect of Brazilian beef imports, he said this was a positive outcome for the region.

 

"An enormous amount of effort and resources have been invested into supporting Indonesia's efforts to remain FMD-free. For our own disease risk interests as well as those of Indonesia, we believe this is a positive step forward," he said.