Weak demand is increasing the pressure on Indonesian lot feeders with some discounting of slaughter cattle during March to as low as Rp39,500.
Eight months after Indonesia began importing low-priced frozen Indian buffalo meat, wet market prices have remained stubbornly high at Rp120,000-130,000 throughout. Why aren’t prices coming down?
In nine months Indian buffalo meat has grown to claim 20 percent of the Greater Jakarta beef market – but uptake has not been as rapid as we might have thought, market research by MLA suggests.
Indian buffalo meat exports to Indonesia could be impacted in coming weeks, after a newly elected Hindu Government began cracking down on slaughterhouses in India’s biggest buffalo meat processing state.
There appears to be a general sentiment that the “new” supply and demand equation which includes Indian beef has reached a point where the instability caused by Indian supply has now been factored into the market (after capturing about 50pc of the business) and is no longer a disrupter to current day to day trading.
Indonesian cattle importers by law feed must feed imported cattle for a minimum of 120 days. How will this work with heavier cattle soon to start arriving?
One of the most interesting observations for January is the discovery of sales of low-priced frozen beef from Spain in Java, which has been selling strongly since arriving in December 2016.
A reduction in annual export sales for 2017 of about 50 percent is starting to sound more like a fair estimate in light of the impact Indian buffalo meat is having on slaughter cattle demand in Indonesia, writes Dr Ross Ainsworth.
Usually at this time of year Australia’s northern cattle industry is eagerly awaiting news of new cattle permit allocations from Indonesia for the crucial stocking-up phase ahead of Ramadan or Lebaran.
However, changes in cattle importing arrangements introduced last year mean the old quarterly/trimesterly permit allocation system no longer exists.
Feedback from the live cattle trade suggests the recent introduction of imported Indian buffalo meat into Indonesia is having a much bigger impact on demand for Australian live cattle in the country than many may have thought.