Live Export

Live exporters await Indonesian permits

James Nason, 01/09/2016

With the first day of Spring has also come the onset of the third and final trimester of the year for Indonesian cattle import permits.

Indonesian cattle importers have not yet been issued permits for the September to December period from the Indonesian Government.

However some have told Beef Central this week that they have been informed by the Government the number will be in the 150,000 head range.

While less than the 250,000 released for the second trimester and 200,000 for the first, a volume of 150,000 is seen as an achievable number from a supply perspective, given the tight availability of cattle across northern Australia.

After a recent Cabinet reshuffle, new Indonesian Government Ministers have been floating new measures designed to improve beef supply and lower beef prices for Indonesian consumers in future.

One initiative is to increase the weight of cattle allowed to be imported from Australia from a maximum of 350kg upon arrival in Indonesia, to an ‘average’ weight of 350kg. This would enable more slaughter weight cattle to enter the country and improve beef supply.

One respected Indonesian lot feeder told Beef Central this week that the 350kg average is now officially in place.

However most exporters and importers will still no doubt be waiting to see formal confirmation of the higher weight allowance written in the new permits when they are released before filling ships with heavier cattle, to avoid potentially costly misunderstandings when the ships hit the port in Jakarta.

There has also been recent trade decrees  from both the Ministry of Agriculture and Ministry of Trade to extend the length of permit validity beyond the current four month period. Further ratification from the Ministry of Agriculture is required before that occurs, but the Australian trade is watching this development with great interest, as longer permit periods are seen as an effective way to improve the alignment of supply and demand in Indonesia and to reduce costs throughout the supply to the benefit of everyone from Australian  cattle producers through to Indonesian beef customers.

Another potential change causing some uncertainty at present is a proposed requirement from the new Minister of Trade for feedlots to import more breeding cattle. Importers have all submitted five-year business plans for import numbers to the Minister outlining their proposed future breeding cattle imports.

Despite several previous attempts, some very well funded, past efforts to breed cattle in Indonesian feedlot environments have not yet proven commercially viable, but this is another new push by the Indonesian Government to try to increase local production and lessen reliance on imported cattle.

Under the latest proposal, the more breeders an Indonesian feedlot imports, the more feeder cattle their feedlots will be licensed to import, so there is a strong incentive to ramp up breeding cattle imports.

It is yet to be seen how this proposal will play out in terms of impact on demand for breeding cattle from Australia, supply of which is now extremely tight in the current herd rebuilding environment.

As reported by Beef Central in recent months, the Indonesian Government has also licensed State Owned Enterprises to import animals and products from Foot and Mouth Disease free zones within countries that may have other areas infected by FMD. This rule has opened the door to imports of Indian buffalo meat into Indonesia. and the impact of this development will be watched closely in coming months.

The price of feeder cattle exported from Darwin is again retesting historical highs at 365c/kg.


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