March 24, 2011

 

Indonesia's beef supply faces impending shortage

 

 

The Indonesian government has been criticised over a decision to maintain beef import controls, most of which come from Australia, amid warnings that supplies will dry up by April.

 

The Indonesian Ministry of Agriculture earlier this month confirmed it would again impose import restrictions on boxed meat products and live cattle, as part of a policy aimed at making the domestic industry self-sufficient by 2014.

 

However, the Indonesian Meat Importers Association has slammed the move, saying the government had failed to secure domestic supply before deciding to enforce a cap of 50,000 tonnes on boxed meat products.

 

The association's chairman, Thomas Sembiring, said the decision was politically motivated as part of an attempt to show the self-sufficiency policy was working. "It's just a political move. By reporting that the import quota was cut that much, they're trying to make it seem like the programme is working already," he said.

 

"If there are no more imports coming (this month), in April beef stocks will be empty. Even if some importers can get a licence by April, it takes about three to five weeks to get the meat into Indonesia," Sembiring added.

 

As part of the restrictions, which were first introduced last year, live cattle from Australia must also now weigh under 350 kg in a move designed to ensure they are fattened up in Indonesian feedlots, thus boosting employment in the local industry.

 

The quota for live cattle imports has been set at 500,000 head.

 

Indonesia is Australia's largest cattle export market with trade in boxed meat and live cattle worth more than US$600 million last year.

 

The decision to again impose the import restrictions was announced in Jakarta following a meeting between Australian Agriculture Minister Joe Ludwig and his Indonesian counterpart, Suswono.

 

Senator Ludwig said at the time that both countries had a shared interest in ensuring market access for Australian exporters.

 

It is possible the Indonesian government may now lift the restrictions as it looks to fill the gap between domestic demand and supply.

 

Indonesia is also Australia's largest wheat and potato market, and a significant market for the sugar and dairy industries.

 

In 2010, Australia exported US$2 billion worth of agricultural products to Indonesia.