In news likely to trigger some short-term relief for Australia’s northern cattle industry, trade sources have advised that Indonesia has released increased quotas for the next quarter.
Live export sources have told Beef Central that 125,000 head is now widely acknowledged within the trade as the second quarter import quota, and that Indonesia’s trade minister issued permit allocations based on that number to individual importers in Jakarta yesterday.
At 125,000 head, the second quarter quota is more than double the 60,000 head issued for the first quarter, and brings the total level of issued quota for 2012 to date to 185,000 head.
The increase is based primarily on Indonesia’s requirement for more cattle to place on feed over the next three months in preparation for the spike in beef consumption that occurs around the Ramadan and Eid religious festivals from mid-July to mid-August.
Ramadan is a month of daily fasting and abstinence for muslim people and is followed by the holiday of Eid Al-Fitr, which marks the end of the fasting period and involves feasts, celebrations and charitable donations.
The higher import permits for the second quarter are positive news for northern cattle operations and exporters as the wet season draws to a close and they prepare for first round musters.
However, whether it means Indonesia is likely to increase its overall imports this year above the 283,000 head level set back in December is yet to be seen.
It was always expected that Indonesia would ramp up imports for the second quarter in the approach to Ramadan, and quotas could ease again in line with the previously announced annual quotas in the final two quarters.
However retailers and meat processors have been exerting strong public pressure on the Government to raise import quotas, saying that the cutbacks have led to a shortage of beef in Indonesian which has pushed retail prices for consumers up by more than 15pc compared to last year.
Australia exported 133,201 cattle to Indonesia during the corresponding April-June quarter last year.
That volume would have been higher had the Federal Government not ordered an immediate halt to the trade on June 7.
It is understood that Indonesia is also changing the way import permits are allocated, in favour of new system that will reward importers and abattoir owners with “import credits” – higher individual import allocations – in return for using locally produced cattle and for importing breeding stock.
The system is designed to reward those who are helping the Indonesian government to achieve its goal of self-sufficiency.