Live Export

Indo order delivers price boost

Beef Central, 05/08/2013

Northern cattle producers fortunate enough to secure a share of Indonesia’s new order for 25,000 slaughter-weight cattle are benefiting from improved prices as well as a much needed opportunity to generate cash flow. 

Exporters have been sourcing steers, heifers and cows in the 420kg or heavier weight range to fill the order for the past two weeks.

About 12,000 head will have been delievered to Indonesian ports by the end of this week.

Slaughter-weight steers are currently commanding around 1.50c/kg live weight, equivalent to the going export rate for feeder orders, while cows are presently selling for around 1.15c/kg, according to export industry sources.

That is about 20c/kg more than producers can expect for cows selling to southern processors, or an extra $85/head on a 420kg cow.

The Indonesian order has added to existing competition from three other South East Asian countries for slaughter weight cattle from the north.

Export volumes to Vietnam, Malaysia and the Philippines have increased this year, helped by rising demand for beef and declining cattle herds in those countries, and helped by more attractive purchase prices for northern cattle as rates have slipped in the absence of previously high Indonesian orders for feeder cattle.

How Indonesia’s sudden re-entry into the market for slaughter-ready cattle will influence prices and demand from the smaller SE Asian markets remains a key point of interest for the northern trade.  

Much will also depend on whether Indonesia issues further permits for slaughter weight cattle going forward.

Indonesia has not issued permits for cattle above 350kg since 2010, but released the new open-weight-limit permits two weeks ago in an attempt to improve the supply of beef to wet markets and ease prices for the Idul Fitri and Labaran religious festivities.

Wet markets are now being closely monitored for any signs of a shift in price as a result of the slaughter cattle imports and recent additional imports of boxed beef.

An article in the Jakarta Post today said prices in local wet markets had not yet shown any sign of having been affected by the Indonesian Government intervention so far.

The paper said provincial administrations and trade agencies had released tonnes of imported beef priced at 78,000 Indonesian Rupiah per kilogram last week to improve supply and push down skyrocketing beef prices..

However a beef vendor told the paper yesterday that beef was still selling at 110,000/kg despite the operation.

 

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