Live Export

Indonesian export window closing as ban hangover drags on

James Nason, 20/07/2011

Exporters say it could still take up to six weeks before they receive federal approval for Indonesian supply chains and can recommence exports.The suspension on live exports to Indonesia may have been lifted, but hundreds of thousands of cattle are still likely to miss the 2011 export window for the market as a direct result of the ban.

The suspension ran for four weeks but the hangover is set to last even longer as exporters work with Indonesian importers to bring closed supply chain systems up to new Federal Government assurance standards before they can apply for export licenses.

Exporters have indicated to Beef Central it could still be anywhere from 14 days to six weeks before they are in a position to receive Australian Government approval.

The longer that process takes the less time exporters will have to assemble cattle for shipments before the onset of the tropical wet season in October/November halts northern cattle movements until next year.

The protracted time table will also push more cattle well beyond the 350kg maximum weight limit for Indonesia before ships are ready to leave.

Northern Territory Cattlemen’s Association executive director Luke Bowen told ABC radio this week that as many as 300,000 cattle that would normally have gone across to Indonesia will have to be sold into other markets because of the ban.

Alternative live export markets such as the Philippines, Malaysia and Egypt are only likely to take a fraction of the volume that would normally go to Indonesia. A number of ships have also been re-deployed into other trades such as South America, limiting the shipping capacity that currently exists to fill orders to other markets.

Ultimately most of the northern cattle that do not go to Indonesia will have to find buyers in southern and eastern domestic markets.

"It is possible that only 30 per cent to 40 per cent of the historic trade may go this year," Mr Bowen said on ABC yesterday.

“If that happened, 60 per cent or more would need to go somewhere else or be held back on properties if it was physically possible to do so, and financially possible to do so".

Northern cattle producers are in the middle of their annual cattle marketing period but have cattle standing in paddocks and no income coming in. Fears of financial ruin and foreclosure as a result of debt defaults loom larger the longer it takes to get boats back on the water.

Australia exported 521,002 head to Indonesia in 2010, representing 59.5pc of total Australian live exports.

Federal agriculture minister Joe Ludwig told Beef Central last week that the timing of his decision to lift the suspension after four weeks was based on his belief that the industry was ready to provide the assurances the Federal Government required.

Speculation has surrounded why Mr Ludwig suddenly lifted the ban on the night of Wednesday, July 6.

Some point to the fact that the decision came just days after WA cattleman Nico Botha threatened to start shooting cattle to take pressure off paddocks, and assert that Mr Ludwig lifted the ban when he did to head-off potentially devastating images of cattle being shot across the north as a result of his ban.

Others have pointed to party-political motivations, suggesting Mr Ludwig and prime minister Julia Gillard were desperate to end the ban before foreign minister Kevin Rudd had the chance to increase his political stocks at their expense by negotiating a diplomatic solution on his visit to Jakarta two days later on July 8.

Mr Ludwig disputed the speculation when asked to explain the timing of his decision.

“The decision to lift the suspension was made because the Government had achieved agreement with industry about how international standards would be operationalised, became confident that a number of exporters in Australian were close to meeting these standards and received advice that Indonesia was prepared to issue import permits for importation of live cattle.

“It is for these reasons that the decision to lift the suspension was made.

“I had made it very clear that I would not wait a day longer than was necessary to restart the trade. As soon as I was able lift the suspension I did.” 


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