WHILE the Federal Government’s announcement on Friday that five additional Australian beef plants have gained access to the Indonesian market was full of self-congratulation over the result, it conveniently overlooked the fact that Australian boxed beef exports to our near neighbour this year are seriously restricted through trade restrictions.

Under Indonesia’s import permit rules, last year 180,000t was issued to commercial (non government) importers, for beef from all supplying nations, plus a smaller amount through government channels.

This year, that figure to commercial importer parties is just 30,000t, while 250,000t has been allocated to state-owned enterprises. That SOE figure includes 100,000t for Indian buffalo meat, 75,000t for Brazilian beef, and a meagre 75,000t for all other exporter suppliers – including Australia, the US, New Zealand and a host of other eligible exporters.

On top of those restrictions, Indonesia has completely ceased issuing sheepmeat permits since the start of last year. In essence it means sheepmeat exports to Indonesia are now banned.

There’s been widespread speculation about the underlying reason behind the sharp shift out of private sector-controlled beef/buffalo permit volume into channels controlled by state-owned enterprises this year. One version suggests the SOEs will simply sell their permit share to commercial players – adding significant unnecessary cost along the way.

For context, last year Australia exported 66,500t of beef to Indonesia, ranking it as our fifth largest beef customer after the US, Japan, Korea and China. On top of that, Indonesia has historically been a colossal market for Australian offals, taking 48,100t last year – more than 50pc higher than our second largest offal market, South Korea.

Take Indonesia out of Australia’s export offal mix, and it becomes much harder to sell the ‘fifth quarter’ at anything like attractive rates.

Both eligible offals and muscle meat come under this year’s tightly-constricted Indonesian import permit volume, Beef Central was told.

“In some ways, Indonesia could be seen as even more important to Australia’s export performance than the US, Japan, Korea or China,” a trade source told Beef Central on Friday. “That’s because of the wide variety of cuts involved, as well as offals in the equation.”

Without that Indonesian customer access this year to balance the higher-paying markets like Japan and Korea, this could emerge as a huge headache for Australian exporters, the trade source said.

Government overlooks permit impact

“We’re surprised the Federal Government made such a big deal over the access for five additional beef plants on Friday (see Agriculture Minister Julie Collins statement here)  – at the same time the export processing industry has been lobbying Canberra hard to address the much bigger issue of this year’s Indo import permits.”

“It makes a mockery of the access now available for the five additional Australian beef plants. This year’s import permit restrictions are going to make it very, very hard for those new entrants to trade into Indonesia at all – at least in any commercial volume.”

“It makes any granting of additional licenses for supply to Indonesia a moot point – regardless of the degree of input the Federal Government had in the approval process.”

While there is no formal list of which plants were granted access on Friday, Beef Central has established three of the businesses involved. They include Teys Lakes Creek in Queensland and Greenham plants at Tongala (Vic) and Smithton (Tas). Smithton only gained Halal status three or four years ago.

AMIC’s response

Since this item was published, the Australian Meat Industry Council has issued the following statement, in response to Friday’s Federal Government’s announcement about Indonesian market access.

The Australian Meat Industry Council welcomes the announcement of additional export approvals of red meat processing and export establishments to Indonesia for beef, sheep and goat meat, however notes serious concerns with current constraints placed on red meat imports to Indonesia which are restricting trade and opportunities for newly-listed businesses.

AMIC has been working closely with our relevant members as well as the federal government over a number of years to gain these new listings which are the pre-requisite for export-registered establishments to trade to Indonesia. We welcome the additions, which is the result of sustained work by the individual plants as well as the Department of Agriculture, Fisheries and Forestry.

“Indonesia is a critical export market for Australian beef and sheepmeat,” AMIC’s general manager of processing and trade, Sam Munsie said.

“Australia has an export profile that creates value through efficient carcase balance and utilisation, while also providing reliable, safe and secure red meat to Indonesian customers and consumers.

“While we welcome the additional listings, AMIC notes that Indonesia’s import permit restrictions on beef and an effective ban on sheep and goatmeat imports, means that any new listings will not result in any increase in high-quality Australian halal meat available for Indonesian consumers.

“Australian exporters need predictable, rules-based access to markets like Indonesia, and AMIC calls on the Indonesian and Australian Governments to urgently address the current Indonesian import-permit-related restrictions which are directly impacting and limiting Australia’s red meat trade,” he said.