Indonesia

Confusion surrounds Indonesian permit periods

James Nason, January 14, 2016

Live export steersThe book has not yet closed on opening Indonesian cattle import permits for 2016, with exporters finding to their surprise that the new permits issued earlier this week are valid for only three months, not the extended four month period they had been expecting.

Indonesian officials had advised Australian livestock export industry leaders that for the first time, new cattle import permits from Indonesia would be valid for four-month periods, one month more than the previous quarterly permits.

The Australian industry had asked for permits to be allocated annually, based on the argument that year-long permits would benefit all supply chain participants, including Indonesian consumers, by removing shipping delays, artificial demand spikes around permit release periods and unnecessary costs.

While the request for annual permits was not granted, several Indonesian Government sources had advised the Australian Livestock Exporters’ Council that future permits would be extended from three months to four months.

The assurance was greeted as a significant move in the right direction towards reducing supply chain costs for the trade and in turn for Indonesian customers.

However, given those assurances, exporters were surprised to notice after permits were issued on Monday night that they were still valid for only three months, not the four months previously advised.

Australian Livestock Exporters’ Council chief executive officer Alison Penfold said the industry is now working with the Indonesian cattle import body APFINDO and Indonesian Government officials to try to clarify the permit period.

“We were advised that the permits were to be for four months, and we are working with the Indonesian Government to try to get some clarity,” she told Beef Central.

“The view that has been expressed to me that there could be dispensations issued to enable these permits to be valid for four months.

“It is a process issue. We have got three different Indonesian bureaucracies involved, but I believe it can and will be sorted out.”

Ms Penfold said the industry would still prefer annual permits, which she said would benefit everyone in the supply chain.

“It all comes down to more transparency and clarity of the process, and earlier information to enable better planning,” she said.

“What isn’t good for anyone in the supply chain, including consumers, is this spot buying and having boats tied up for days which happened with the permits not coming out until 10 days after the permit period.

“We need to make sure we are getting information from a ministry that is consistently held.”

One of the problems surrounding permit allocations is that the Indonesian Government currently has no process for formally advising the Australian Government or industry of new permit arrangements and volumes.

“We would like to think there can be a means by which there will be a formal notification of numbers just to make it clear,” Ms Penfold said.

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