Indonesia

UPDATED: New Indonesian trade minister to import more cattle

James Nason, 18/08/2015
A wet market in Padang City, West Sumatra. Picture: NTCA

A wet market in Padang City, West Sumatra. Picture: NTCA

 

This article has been updated to include comments from Prime Minister Tony Abbott and Agriculture Minister Barnaby Joyce in Yass, NSW, on Wednesday, which appear below original article:

 

Indonesia’s new trade minister has told media in Jakarta today he plans to issue cattle import permits for the remainder of 2015 for up to 300,000 cattle.

Thomas Lembong

Thomas Lembong

Thomas Trikasih Lembong was only sworn in as trade minister last week, replacing Rachmat Gobel, who had cut cattle import permits to just 50,000 head for the current quarter. Amid soaring prices, butcher’s strikes and a consumer backlash last week, the Indonesian Government announced a short-term measure to increase supply by issuing permits for a further 50,000 cattle.

However, Mr Rachmat lost his job in a cabinet reshuffle two days later, replaced by Mr Thomas, who told Indonesian media today that one of his first jobs is to curb high beef prices.

He said the Government plans to issue licenses for between 200,000 and 300,000 cattle until the end of the year to put pressure on high meat prices.

He disclosed that he has also held discussions with Indonesia’s Minister of Agriculture Amran Sulaiman and that they are ready to “flush the market” with stock.

“For the rest of this year we may be able to import 200,000 to 300,000 head of cattle,” Mr Thomas said.

Reports suggest the cattle will be imported by the Indonesian Government’s Food Logistics Agency Bulog, which had been given responsibility to import the 50,000 cattle announced last week. No actual permits have yet been issued by Bulog from last week’s reported increased allocation.

“We have coordinated with the Ministry of Agriculture in order to decide the steps to be taken to lower the price of beef,” the new Trade Minister told media today, in comments that have been reported by several Indonesian news outlets.

“We are ready for pouring the market.”

The Indonesian Government last week assigned blame for the beef shortage and soaring prices not on its decision to cut import permits but onto cattle importers.

President Joko Widodo and a number of high level Indonesian ministers told the Indonesian media that cattle importers were “hoarding” slaughter ready cattle in their feedlots, and suggested they were deliberately holding the cattle back in order to push prices up, create public unrest and force the Government to release more permits.

In response Indonesia’s Cattle Importers Association APFINDO spokesman Jono Liano said the shortage was caused because there was no supply, not because importers intentionally held the supply.

Many Indonesian feedlots are already operating at just 50pc capacity or less due to the reduced number of permits issued this year compared to last.

In the first three quarters of 2014 the Indonesian Government issued permits for a collective total of 613,000 cattle. For the first three quarters of this year it has issued permits for 398,000 cattle (not including today’s statement by the minister for a possible further 300,000 import permits).

The Indonesian Government continues to point to feedlot owners as the cause of the severe shortage and soaring beef prices.

Late last week Indonesian police raided two feedlots near Jakarta, where 22,000 Australian cattle were on feed surrounded by many empty pens. The Indonesian police claimed that 4000 of the cattle they found were ready for slaughter and should have already been sold, and subsequently “sealed” both feedlots. Beef Central understands both feedlots remain sealed this week.

In announcing today that more permits are to be be released, the new Indonesian trade minister stated that the increase in cattle would make stock hoarders “think again”.

“We are ready to flush the market so that the piled-piled stock think twice.  Because once we flush the market, prices will drop and (cause) quite heavy financial losses,” he said according to media reports.”

Reports say Indonesian beef prices have risen to IDR 120,000-140,000 per kilogram – well above the Government’s target price level of IDR 90,000/kg – and that as a result wet market vendors say they selling only half the volume of beef they usually sell.

No detail has been provided as to whether the new permits will be for feeder or slaughter ready cattle.

Another Indonesian media outlet quoted the trade minister saying the Government was not very happy with the high price of beef and his job was to bring prices down.

“I’ve talked long enough yesterday with the Minister of Agriculture, I think he has a strategy for the development of this industry so that long-term very good. And of course, I was assigned to curb the market,” he said.

The Indonesian media have reported that under the Indonesian Trade Act, businesses that store basic commodities, including beef, in the event of shortages and price fluctuations can receive sentences which include imprisonment to a maximum of five years and/or a maximum fine of IDR 50 billion (AUD $98,000).

Barnaby Joyce welcomes announcement

 

Speaking at Yass earlier today federal agriculture minister Barnaby Joyce said the Australian Government welcomed the Indonesian trade minister’s his announcement.

“We know that this is vitally important to the people of Indonesia, vitally important to families in Jakarta.

“We know that we must work in a partnership to keep protein affordable to them because that is almost the sacred connection, we supply the protein, they consume the protein, they make a dollar, we make a dollar and it’s a very strong working relationship that we should never ever put at risk.

“What I think is very important is we end up with a longer term window to supply in to and we’ve said this publicly and we’ve said it privately so that we can plan properly, so people such as the Abbeys and people in North Queensland and people in the Kimberley can be part of the process of delivering to the requirements of Indonesia, as well as delivering to the requirements of Vietnam, to China, to the Middle East. And this goes to show you how close our economies are becoming, how we are getting a real return back to our nation by reason of the burgeoning middle class in these areas.”

PM – We are here to serve the Indonesian market

Appearing at Yass alongside Mr Joyce, Prime Minister Tony Abbott told assembled media that “we are here to serve the Indonesian market.”

“We are here to supply as many cattle as we can, provided it’s what Indonesia wants.

“But Indonesia’s growing middle class has an increasing appetite for beef and the best place for Indonesia to get beef is Australia because our beef is very high quality and it’s readily available. Now, yes, there have been some hiccups in this particular trade, starting from the former Labor government’s catastrophic – absolutely catastrophic – decision to cancel the live cattle trade in panic at a TV programme. Thanks to the good work of Ministers Robb and Joyce, the trade is back on track and I am confident it will expand in the future.”

 

 

 

 

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Comments

  1. Justin Dyer, 18/08/2015

    Did not realise that beef is considered a “basic commodity”.

  2. Peter Bishop, 18/08/2015

    Good news for the live trade.

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