October 4, 2005

Fuel price rise reduces Indonesia's demand for Australian cattle
 

Indonesia's demand for north Australian cattle continues to be weak, following the Indonesian government¡¯s petrol and diesel prices hike of 95 and 105 percent respectively.

Indonesia is traditionally Australia's largest cattle export market.

Cattle feedlotters such as Agrogiri Perkasa are now weathering rises in transport and feed costs.

Agrogiri Perkasa's managing director Greg Pankhurst predicted that sales of live cattle to Indonesia could be down by 25 percent by year-end. This is because beef is perceived as a luxury item in the country.

With the drop in live cattle demand in Indonesia, Australia is now looking to expand there its frozen and chilled beef market share instead.

Queensland Livestock Exporters Association's president Angus Adnam however warned that Australia has to work hard not to be overtaken by exporters like Brazil and India, which have established themselves in Asian countries like Malaysia and the Philippines.

He added that it is entirely possible that Indonesia could replace Japan as the no. 1 frozen meat buyer in 20 or 30 years.