Australian agriculture ministers visiting Jakarta this week have spoken of encouraging signs that Indonesia is considering releasing expanded import quotas for Australian cattle, however exporters have advised that despite several positive signals in recent weeks, no additional import permits have yet been issued.
Queensland agriculture minister John McVeigh and Northern Territory primary industries minister Willem Westra Van Holthe have been in Indonesia since Sunday visiting supply chains and meeting with senior Indonesian Government officials.
Mr McVeigh said on Tuesday that the Indonesian minister for agriculture Suswono had discussed the possibility of small increases in live cattle import quota during their meeting.
The Indonesian Government has set import quota for 2013 at 267,000 head, but has previously stated it may issue further in-quarter quota if it finds that additional supply is required.
“In a meeting with Mr Suswono, the Indonesian Agriculture Minister, he talked about the need to increase beef consumption in his country and also the option of a possible increase in live cattle imports by bringing forward the next third-quarter quota by one month,” Mr McVeigh said.
"We’ve calculated that even that small move would mean an extra 20 to 25,000 cattle out of northern Australia in the short term."
In a note sent to media yesterday in response to articles stating that new quota has now been granted, Australian Livestock Exporters Council chief executive officer Alison Penfold said talk of new quota was still speculative.
"Exporters have received no advice nor verification that Indonesia has made an announcement," she said. "As soon as there is firm information to support the speculation, I will advise."
Indonesia has allocated permits for 117,000 cattle for the current second quarter, and is said to have set quota at 46,000 head for each of the third and fourth quarters.
If Indonesia does bring part or all of its third-quarter quota into the existing April to June quarter at this point, exporters may face a challenge to marshall the shipping capacity required to fill any additional allocation before the quarter expires in six weeks time.
As one exporter recently explained, finding ships to fill orders at short notice isn't as simple as hailing a taxi. Forward planning is required to keep chartered shipping capacity optimally utilised. Reduced quotas from Indonesia have meant that most exporters have already filled their permits for the second quarter, and where possible would have booked chartered shipping elsewhere for the remainder of the quarter.
While there have been strong signs within the trade that Indonesia is considering additional quotas – first reported on Beef Central in this article – exporters will be understandably reluctant to begin recommitting expensive shipping charters to Indonesia until they have the certainty of import permits in their hands.
For the time being the industry is waiting on news to see if weeks of quota speculation converts into new permits. New quota would provide an injection of confidence to a northern cattle industry in strong need of positive news.
In a media statement released during his visit on Tuesday, Mr McVeigh said he was determined to rebuild the relationship with Indonesia and get more live cattle into what was a major market for cattle producers.
“There are great opportunities for involvement in skills training, value-adding along the production chain and education exchanges for young people in the beef industry,” he said
“This trip is about rebuilding a relationship which was badly damaged by Federal Agriculture Minister Joe Ludwig, and we have started by talking directly to the Indonesian Government.”