November 22, 2013

Following allegations of spying by Canberra, Indonesia is reviewing its trade policies with Australia but imports of Australian cattle and beef have not been affected yet by diplomatic tension.

Indonesia is Australia's biggest market for cattle and beef. Jakarta relaxed regulations on those imports this year to allow more to come in to help curb food inflation.

A day after the president announced Indonesia was freezing military and intelligence cooperation with its neighbour, Trade Minister Gita Wirjawan told Reuters on Thursday (Nov 14) that trade policies were being reviewed.

However, Bayu Krisnamurthi, the deputy trade minister, told Reuters that there is no policy change yet on beef and cattle imports from Australia.

Media reports this week quoted documents leaked by former US National Security Agency contractor Edward Snowden as showing that Australian agencies had spied on top Indonesians, including the president's wife.

After Indonesia had abandoned a quota system in September, the Australian Bureau of Resource Economics and Sciences (Abares) forecast the Asian country would buy 590,000 head of cattle from Australia in the year from October, up from 266,000 in 2012-13.

Australia suspended live cattle exports to Indonesia for a time in 2011 after reports of cruelty to animals there and the Australian beef industry suffered.

Rural debt levels across Australian farms jumped in the 2010-11 season and farms in Western Australia and the Northern Territory, home to the largest concentration of cattle farms, were the hardest hit.