December 6, 2012

 

Australia's beef imports to Indonesia to decrease

 

 

As Indonesia pushes toward a self-sufficient beef industry, Western Australia's (WA) live exports will fall to 238,000 head next year, down from 283,000 in 2012, with producers in the north of WA expected to be the hardest hit.

 

A delegation representing the WA cattle industry has returned from a mission to Indonesia with a bleak outlook for local pastoralists and convinced the key market cannot sustain drastic cuts in beef imports. The trade mission came as Federal Agriculture Minister Joe Ludwig confirmed Indonesia would reduce Australia's beef import quota to 80,000 tonnes in 2013.

 

WA Farmers president Dale Park, who was part of the delegation, said it visited a string of empty feedlots and an abattoir in Jakarta that had cut processing by 75% because it was running out of cattle.

 

"Looking long term they cannot keep this up because they are eating into their breeding stock now," Park said.

 

"Virtually all the feed lots are empty and even when they do get this latest quota in, they will still be operating at about 25% of capacity. Meanwhile, the local price for meat has skyrocketed."

 

Park warned that pastoralists in the Kimberley and Pilbara who had invested in cattle for the Indonesia market faced even tougher times for at least the next 12 months. Many pastoralists are still reeling from the Federal Government's snap decision to suspend live exports for about three months in 2011 because of animal welfare concerns.

 

The export ban created lingering doubts about the reliability of exports from Australia and prompted Indonesia to look for supplies from other countries. Australia exported boxed beef and live cattle worth US$423 million to Indonesia in 2011-12 but the size of the trade has been cut dramatically since 2009 when live cattle exports reached 750,000 head.

 

The numbers fell to 520,000 in 2010 and 410,000 in 2011. Import quotas for boxed beef have been cut from 34,000 tonnes last year to 32,000 tonnes in 2013. Indonesia has become one of the most expensive beef markets in the world as the quotas continue to tighten, with prices rising by up to 150%.

 

There are now claims cattle are being smuggled into Indonesia from India to supply the highly lucrative market, raising fears about the spread of foot and mouth disease.

 

Kimberley pastoralist and PGA vice-president Ruth Webb-Smith, who was part of the delegation, said the Government ban had caused long-term damage to trade with Indonesia. She said the industry would try to offset the fall in exports to Indonesia by developing markets in other parts of south-east Asia. Indonesia is expected to start issuing import permits for 2013 this month.

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