The wait continues for new Indonesian import permits almost one month after the final ‘trimester’ of 2016 began on September 1.
However there are now strong indications some ships will begin moving from Australia to Indonesia this weekend.
It follows an announcement from Indonesia’s trade minister overnight that the country has now abandoned its current quota system in favour of an annual permit system, with feeder permit numbers tied to breeder imports.
It is understood importers will now be able to apply for feeder cattle import permits on an annual basis, provided that 20 percent of the total number of cattle they import are breeding cattle.
“It’s gone. There are no more quotas,” Trade Minister Enggartiasto Lukita said in Jakarta yesterday, according to a Reuters report.
“If (companies) want to import, they will likely be allowed to, provided they import breeding (cattle) because this country needs a (cattle) population.”
Indonesia’s then trade minister made similar comments about the introduction of an annual permit system in late 2015, which did not eventuate at the start of this year.
However, Indonesian cattle importers have independently confirmed to Beef Central this morning that the quota system has been replaced by a breeder-based importation system.
The policy is the latest attempt by an Indonesian Government to try to force self-sufficiency in beef production to occur quickly.
In August it introduced a trade rule requiring that for every five feeder cattle brought in by importers, one breeder must also be imported for breeding purposes.
The Indonesian Minister said Indonesia intends to import 700,000 feeder/slaughter cattle in 2017.
To achieve that volume, importers would have to buy in about 140,000 breeders next year.
This at a time when Australian cattle numbers are at historic lows, and breeding cattle are commanding a premium as local producers focus on rebuilding herds.
Indonesia could not have picked a more expensive time to force its importers to buy in breeding cattle.
Three Indonesian importers – all believed to be publicly listed companies – have now signed on to the new rules and have been granted approval to import a combined total of 300,000 feeder cattle through to the end of 2018.
The three importers have agreed to import 60,000 cattle for breeding, the Minister said.
It is understood the approved importers are bound by confidentiality agreements, so details of the contracts are still not well known or understood.
The Minister said more importer approvals are expected soon.
Most importers are not able to comply with the 20pc breeder rule, because it is not feasible or economically viable to run breeding cattle in a feedlot, or “breedlot” situation.
The Indonesian Feedlotters Association, quoted by Reuters, said it is unhappy with the new rule, because feedlots would quickly fill with breeding cattle and calves, leaving insufficient room to accommodate cattle for slaughter.
“They will be uneconomical in no time,” the association’s executive director, Johny Liano, told Reuters.
It is believed that the importers who have signed on now have permits in hand and cattle should start to flow from this weekend.
Several exporters have been incurring mounting bills in recent weeks in their wait for clearance to ship cattle currently being held in pre-export quarantine depots.
It has been common in recent years for Indonesia to delay the release of import permits until two or three weeks after the start of a permit period.
For that reason many exporters did not marshal cattle to export yards until mid-September, assuming permits would be ready by that time.
However, permits have still not been released, leaving exporters with the costs of holding cattle in yards for more than two weeks, with no clear indication as to when they will be able to start loading ships.
More details on Indonesia’s changing import policy and permit situation will be reported as they are confirmed.