Strong signs have emerged that Indonesia is planning to import more than 700,000 cattle in 2014 following meetings between Indonesian Government officials and importers in Jakarta this week.
Ministry of Trade representatives met with Indonesian cattle importers yesterday to outline the Government’s plans for cattle imports in 2014.
Under mounting pressure to curb rampant inflation, the Indonesian Government wants to bring the price of secondary beef cuts in Indonesian wet markets down from 90,000 Indonesian Rupiah per kilogram to below 76,000 IR/kg.
With beef in dramatically short supply after several years of import cutbacks under Indonesia’s failed self-sufficiency push, increasing imports is one of the few levers available to the Indonesian Government to improve supply and ease pressure on prices.
Sources have told Beef Central that meetings this week have been told by Indonesian Ministry of Trade representatives that they believe imports of 720,000 cattle will be required in 2014.
It is important to emphasise that Indonesia has replaced the previous system of allocating quotas for each year with a new system that will see import permits move up and down from quarter to quarter in accordance with the volumes Indonesia believes it will need to keep prices below a set reference level (currently set at 76,000 IR/kg).
Consequently the figures discussed by ministry of trade officials with importers this week effectively represent the Indonesian Government’s ‘plan’ for 2014, not set quotas that will stand regardless of developments throughout the year.
The Ministry of Trade has told importers it believes it will need to import 600,000 feeder cattle in 2014 and 120,000 slaughter cattle.
Importers have also been told that the Ministry of Trade wants to import 142,000 feeder cattle in the first quarter, and that it expects to release Q1 2014 import permits to importers by tomorrow.
Permits for slaughter cattle will be released ahead of special occasions and peak demand periods such as Idul Fitri (July/August); Eid-al-Adha (October) and Christmas/New Year.
After starting 2013 with an annual import quota allocation of 267,000 head, the release of addtional permits for November and December is likely to take total exports for the year to Indonesia above 400,000 head.
Another positive development for Australian exporters lies in signs that the Indonesian Government will grant special dispensations that will allow shipments sailing to Indonesia under 2013 permits to arrive in Indonesia after December 31.
The release of additional permits for 170,000 feeder cattle and 40,000 slaughter cattle by Indonesia for the final two months of this year has caused a major rush and subsequent congestion at northern ports across Australia and upon arrival at ports in Indonesia.
The delays have created a genuine concern for exporters that the final ships sent from Darwin under 2013 quota may not arrive in Jakarta by the December 31 deadline.
A respected industry source told Beef Central this morning that Ministry of Trade officials have also now indicated that dispensation letters will be provided to allow vessels sailing under 2013 quota to arrive early in the New Year.
The northern cattle industry has been operating in overdrive since new permits were released in early October to satisfy Indonesia’s growing need for more cattle.
Northern Territory Livestock Exporters Association interim CEO Brian Scott told Beef Central yesterday that exports from the port of Darwin for November and December will total 76,000 head, which will take the total number exported from Darwin in 2013 to around 370,000 head.
“It has been a huge effort by everyone, producers through to exporters, and registered premises have been flat out trying to keep on top of things with cattle flowing through, so it has been a really good effort to pull it all together,” Mr Scott said.
Return of the big ships
The return of high-volume exports to Indonesia has also been reflected in the reappearance of several large livestock ships that have not been seen on the South East Asian run for more than two years.
Wellard Rural Exports’ Ocean Drover, which can carry 18,000 head at a time, and other 10,000 head plus vessels including the Ghena and the Bader are now back on the Australia-Indonesia route.
The trade would not have been able to handle the volumes of cattle Indonesia required in such a short time without the additional capacity provided by the big ships.