A livestock export ship at the Port of Darwin.

AUSTRALIA’S northern cattle trade is in limbo as the industry waits for Indonesia to issue official cattle import permits for 2024.

The Indonesia Government has wasted little time in allocating import permits for Indian Buffalo Meat for the year ahead, which include a 100,000 tonne quota to be imported by Indonesia’s state owned enterprise Bulog and 50,000 tonnes via private sector Indonesian importers.

It has also allocated additional meat quota of 20,000 tonnes for boxed beef imports from Brazil, to be imported via the Indonesian Government-controlled holding company ID Foods.

However, despite moving quickly on those permits, Indonesia is still yet to issue cattle import permits for 2024, which is holding up new orders in time for upcoming religious festivals.

Recent media reports quoting Indonesian agriculture ministry official Inti Pertiwi Nashwari have stated that Indonesia plans to import 676,000 head of cattle in 2024, as well as 320,352 metric tons of frozen meat in total to fulfil domestic demand.

The quota allocation is an overarching number and does not guarantee that number of cattle will be imported. Trade volumes will ultimately be dictated by commerical market factors which include strong competition for fresh beef from Australian cattle in the form of cheaper Indian Buffalo Meat and boxed beef from various sources and subdued consumer demand. It is worth keeping in mind that Indonesia’s annual quota allocations for both 2022 and 2023 were in the vicinity of 600,000 head in both years but only 340,000 cattle and 360,000 cattle from Australia were physically exported in those years respectively.

Delay becoming concerning

It is not unusual for the Indonesian Government to take days or even some weeks past New Year’s Day to issue cattle permits for each new year.

But trade sources say that it is unusual for January to almost be over and for cattle import permits still not to be issued.

The month-long Ramadan period when beef consumption in Indonesia peaks is fast approaching in early-March.

With a shortage of cattle on feed in time for this period a rush of export activity is expected to occur when permits are finally issued.

At least one exporter is understood to have been holding a consignment of cattle at an NT export depot with a livestock ship sitting at anchor off Darwin for more than a week sweating on the issue of permits to send the shipment to Indonesia. Costs are mounting every day that passes with no new permits released.

“It could be today, it could be two weeks’ time, we just don’t know,” is how one long-serving northern industry member summed up the situation when asked if the trade had any insights on when permits may be issued.

Wet conditions challenge supply situation

Many expect new orders to emerge as soon as 2024 permits are issued, but the supply situation is also not particularly conducive to filling orders at present either.

Wet weather and drenched paddocks right across the Top End will make it difficult to move cattle in many areas, while producers with good grass and enjoying a strong start to the year may not be feeling any particular urgency to bring cattle forward to sell ahead of the traditional start of the northern mustering season in March/April.

Quoting prices is largely academic at the moment with no movement of cattle until permits are issued, with the most recent guide being the 310c/kg liveweight prices reportedly paid for cattle that left on shipments to Indonesia in December.

Australia’s Assistant Minister for Trade, Senator Tim Ayres met with Indonesia’s Minister for Trade in Jakarta last week but it is not known if the cattle import permit situation was raised.

Elections dominating Indonesian’s attentions

There is some speculation – and it’s important to stress this is conjecture only – that the delays may be partly due to the forthcoming Indonesian General elections scheduled to be held on February 14 to elect the President, Vice President, People’s Consultative Assembly and members of local legislative bodies.

Incumbent president Joko Widodo is ineligible to run for a third term under Indonesia’s constitution, meaning the election will produce a new president, with the successful candidate to be sworn in 20 October 2024.

Writing in his most recent South East Asia Beef Report on Beef Central, Dr Michael Patching said the lack of import permits was of significant concern given that feedlots are looking to fill their inventories leading in to the festival periods beyond Ramadan mid-year.

The Islamic year consists of 12 lunar cycles, which consequently means it is 10 to 12 days shorter than the solar year. That means that Ramadan shifts 10–12 days earlier every year.

Already the trade is considering what that may mean for later this year and for permit allocations at that time, because demand for Ramadan 2025, which will commence in February, will trigger a massive requirement for cattle from Australia as early as November and December this year.