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Calmer conditions returning to Indonesian cattle trade

James Nason, 27/08/2015

After a stormy few months, calmer conditions now appear to be returning to the Australia-Indonesian cattle trade.

The Australian Indonesian Red Meat Partnership, which includes Government representatives from both countries, has announced $12 million in investments focused on promoting sustainable commercial scale beef cattle breeding in Indonesia (more detail on this below).

Importers and exporters have also been told that permits for 300,000 cattle will be issued for the fourth quarter, which runs from October to December. Only when the permits are formally issued can this figure be formally confirmed, but that is the expected volume as articulated by the Indonesian Government to the trade in recent weeks.

Two feedlots near Jakarta which were seized and sealed by Indonesian police two weeks ago, amid Indonesian Government claims of “hoarding” by feedlot owners, have also been cleared of any wrongdoing, Indonesian media has reported in the last 24 hours. News outlets have reported that investigators found there was no legal basis to seal the feedlots.

The office of Agriculture minister Barnaby Joyce has told Beef Central the minister will also travel to Indonesia in the near future to meet with his ministerial counterparts, which will be his first visit to the country as agriculture minister. 

“Minister Joyce plans to travel to Indonesia to meet with local counterparts on a range of bi-lateral agricultural issues in the near future. Arrangements for this travel are underway, and this is the Minister’s highest priority for international travel,” a spokesperson for the minister said.

More detail has been provided on the $12 million investment recently approved at the third meeting of the Indonesia-Australia Partnership on Food Security in the Red Meat and Cattle Sector in Sydney on August 21.

The breakdown of the funding will be as follows:

  • Promoting sustainable commercial scale beef cattle breeding in Indonesia – $8 million
    • The three-year, $8 million program aims to pilot a range of different breeding partnership models and investment opportunities with private sector partners to assess commercially sustainable approaches that can be up-scaled to facilitate investment, innovation and expansion of the beef cattle breeding industry in Indonesia.
  • Skills Development Programme – expansion and continuation – $4 million
    • Delivery of Skills Development short courses for Animal Husbandry and Cattle Production; Meat Production, Processing and Supply Chain Management; and Policy Development for Livestock Production and Supply Chains, as well as expanding the programme to include a separate course for senior Indonesian Government officials
  • Standard Operating Procedures in Indonesian Abattoirs – $175,000
    • The project will develop and translate practical hygiene standards for hygienic production of meat in Indonesia (on plant). The program aims to assist selected (by volunteer) slaughterhouses to act as ‘champions’ of the industry by developing on-plant SOP’s and working towards industry best practice. The programme will work with the alumni of the skills development programmes short course on ‘processing’.  The outcomes of this activity in the long term will assist the Indonesian meat industry to work towards export readiness.

Meanwhile the Indonesian media has also reported that the State procurement agency Bulog expects to start issuing import permits for the 50,000 slaughter-ready cattle, announced on August 11 as a measure to improve supply, from this week.

Bulog commercial director Fadzri Sentosa has stated the the permits have now been processed and will sent out over the next four months.

‘We’re focusing on cattle for slaughter because our task is to immediately get it to enter the markets,’ he told AAP, saying that should be in about two to three weeks.

Bulog has also told Indonesian media it will import 10,000 tonnes of frozen beef from New Zealand in coming weeks as part of efforts to bring beef prices down to below Rp 100,000 a kilogram.

“Agriculture Minister Amran Sulaiman has instructed us to import frozen beef so we are processing the permits now,” said Bulog’s procurement director Wahyu, who goes by one name, as reported by the Jakarta Globe.

“In principal, the government wants beef to be available and its prices affordable,” Wahyu said. He said Bulog had chosen New Zealand over Australia for the frozen beef import as beef prices in New Zealand are not rising as fast as in Australia.

The government has asked Bulog to import 50,000 head of cattle in order to stabilize domestic beef prices, which had been rising by 10 percent since the beginning of the year. Wahyu said the first batch of the imported beef, comprising up to 9,000 head of cattle, would arrive in Indonesia in early September.

The Jakarta Globe also reported that the government is also planning to import an additional 300,000 head of cattle by the end of this year, to bring down prices further.

“We hope the price of beef will be below Rp 100,000 a kilogram,” Wahyu said, adding that the government is planning to impose a ceiling price for the commodity.

Joni Liano, the executive director of the Indonesia Beef Producers and Feedlot Association (Apfindo), said the sector was ready to support government policies to bring down beef prices.

Joni said he also hoped the government will simplify the beef supply chain, which has contributed to high prices.

 

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