Live Export

Indo eyes 700,000 cattle for 2016, importers still awaiting permits

James Nason, 09/12/2015

The Indonesian Government has provided its first indication as to how many cattle it intends to import in 2016, but importers are still yet to learn how many permits they will be allocated for the first and crucial pre-Ramadan period from January to April.

An Indonesian media article yesterday, reported today in Australia by AAP, suggested that Indonesia has set an annual quota for live cattle imports in 2016 at between 600,000 to 700,000 head.

However that number is “just an indication”, as Indonesian trade sources have told Beef Central today, and does not represent a formal commitment to actual import permit allocations.

Indonesia’s agriculture minister Amran Sulaiman told media in Jakarta yesterday that Indonesia intends to import the equivalent of one million kilograms of beef next year.

Most of that volume will be imported in the form of live feeder cattle, which would equate to between 600,000 to 700,000 head, and the remainder will be imported as boxed beef, which he estimated would total around 80,000 tonnes.

However, these numbers are still only a guide.

“The numbers are still being calculated,” one Indonesia importer told Beef Central.

“There is no official announcement yet to the trade, including allocations for the first four months.

“However, importers have already started submitting import permit applications for January-April 2016 as submission windows will be closed on December 10 (tomorrow).

“So we expect that there will be some announcement before Christmas.”

The trade expects the total number for 2016 will be around 700,000 head, the importer said.

Australia’s live cattle industry, with the support of ministers Andrew Robb and Barnaby Joyce, have been lobbying for Indonesia to change from a quarterly permit allocation system to an annual permit allocation system.

Their view is that the move would lead to more stable beef prices in Indonesia by better enabling exporters and importers to coordinate the flow of cattle with Indonesia’s peak periods of beef demand throughout the year.

This year highlighted the supply issues that Indonesia’s quarterly permit allocation system can cause. Indonesia released permits for only 100,000 cattle for the first quarter, which was the critical period Indonesia needed to build supply ahead of Ramadan. Indonesia then issued permits for 200,000 cattle for the second quarter, which were largely too late to boost supply for Ramadan. The shortage of beef pushed prices to very high levels for consumers ahead of Idul Fitri, the festive feasting period that follows Ramadan.

“It should have been the other way round,” an experienced Australian based trade source said. “Idul Fitri comes forward by ten days every year (in accordance with the lunar cycle), and the lot feeders need the cattle on feed to prepare for that Festival”.

Indonesia recently confirmed it will shift from allocating permits for every quarter to allocating permits every four months (meaning three import permit allocations every year instead of four under the previous system), and will also provide an annual permit ‘indication’ before each year starts.

Agricultural Minister Sulaiman has also been quoted in Indonesia media as saying the Government intends to speed up the development of quarantine islands to allow Indonesia to import cattle from countries from foot and mouth disease-free zones within within some South Amercian countries including Argentina and Brazil.

Indonesian demand for beef is expected to increase in 2016, Joni Liano, the chair of Indonesia’s cattle importers and feedlot association APFINDO, told the Detik newspaper yesterday.

That is based on a projected increase in beef per capita consumption from 2.56kg/capita/year this year to 2.61kg/capita/year next year.

Driving the increase were rising incomes in Indonesia and lifestyle changes, with “more and more beef” being consumed.

The population is also expected to grow by three million people to 258 million people in 2016, Detik noted.

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