Live Export

SE Asia Report: Trade partners reconnect in Rocky | Price gap remains

Dr Michael Patching, 14/05/2024

125th Edition: May 2024

Key points:

  • Price differential between Australia live feeder price and Indonesian live feeder price maintains a wide gap.
  • Heatwave scorches Thailand, Malaysia and Philippines.
  • Close to 50 percent reduction in the number of active live exporters by sea since 2005 (see related article)

Regional Trends and Overview

Congratulations to the original author of this report, Dr Ross Ainsworth, for pulling the boots back on taking up a regional veterinary officer role with the Northern Territory government, to be based out of Katherine. No doubt many people will be glad to see him back in action putting his wealth of knowledge to good use.

There was a strong international representation at Beef Australia, notably with Vietnamese, Indonesian, and Fijian official delegations from the Asia Pacific region (at least that I met with). The importance of the attendance of our international partners should not be understated.

Indonesia: Steers AUD  $5.15 / kg live weight (IDR 10,487.66 = 1 AUD)

Changes to BULOG’s role in meat imports marks a significant change for meat supply policy in Indonesia

In 2024, the National Logistics Agency of Indonesia (BULOG) faced significant changes regarding its role in buffalo meat importation. The Ministry of Agriculture highlighted this change in response to concerns raised by BULOG’s Main Director about not receiving a permit to import buffalo meat this year, despite applying for permits earlier in the year. According to Syamsul Ma’arif, Director of Veterinary Public Health at the Directorate General of PKH, decisions made during coordination meetings led by the Coordinating Minister for the Economy on 28 March 2024 resulted in buffalo meat import permits being exclusively allocated to PT. Berdikari and PT Perusahaan Dagang Indonesia, two State Owned Enterprises (SOE), instead of BULOG.

BULOG is a government owned and run statutory corporation whose role traditionally has been focused on food distribution and price control. Berdikari has also been been a significant importer and distributor of meat and cattle for many years, but traditionally played a smaller role than BULOG. The move to exclusively use SOE’s for meat import and distribution follows a gradual reduction in the number of foods that BULOG holds responsibility for. BUMN Food Holding ID Food, a subsidiary of PT Berdikari, also imported a consignment of cattle from Australia earlier this year, suggesting that the policy change may affect live cattle imports as well, further reducing BULOGs role.

Corn and Beef Prices Fluctuation

The price of corn for livestock grade stands at Rp 8,390 ($790 AUD/tonne) as of April 23, 2024. Papua contributes to the highest increase, where today’s corn price per kilogram for farmers is set at Rp 14,000 ($1,320 AUD/tonne). Compared to last month, the price of corn for farmers today has decreased by Rp 270 or 3.22% compared to last month’s highest price of Rp 8,660. Compared to last month, today’s beef price of Rp 131,000-135,000 (approx $12.55 AUD/kg) has decreased by  around 10% compared to last month’s highest average price before Eid al-Fitr, which was Rp 144,660 ($13.65 AUD/kg). The beef carcass prices have slightly dropped from last month, to Rp 100,000 ($9.44 AUD/kg) this April.

Indonesian Next President and Vice President

Defence Minister Prabowo, aged 72, is set to assume the presidency in October following his victory in the country’s general elections. The General Elections Commission (KPU) officially declared Prabowo Subianto as the next president after the Constitutional Court dismissed challenges to his first-round majority win. Prabowo, who secured nearly 60 percent of the votes, faced calls for a re-run of the February 14 vote from his election rivals Anies Baswedan and Ganjar Pranowo, citing alleged state interference and rule changes favouring his ticket. Despite past allegations of human rights abuses, including accusations of involvement in the disappearance of democracy activists during the late 1990s, Prabowo’s populist approach and promise to continue the popular economic development agenda of outgoing President Joko Widodo helped secure his victory. Additionally, his selection of the president’s eldest son, Gibran Rakabuming Raka, as his vice president further solidified his support base.

Death of Local Buffaloes

Last month there were cases of 410 deaths among Pampangan buffalo out of a total population of 3,970 in the affected areas of South Sumatra. The incidents were recorded from March 15 to April 6, 2024, in Ogan Komering Ilir Regency. The impact was not only felt by local breeders but also posed a threat to the overall Pampangan buffalo population, which totals 8,104. The preliminary diagnosis reported by the Lampung Veterinary Office indicates Hemorrhagic Septicaemia (HS) as the cause. The Directorate General of Livestock and Animal Health (Ditjen PKH) has taken control measures by disinfecting the pens and administering treatment to buffalo in infected zones with LA antibiotics, antipyretics, and multivitamins. A total of 514 buffalo have also been vaccinated to prevent further spread of this disease. Ditjen PKH will continue vaccination by distributing 10,000 Septicaemia Epizootica (SE) vaccines to the affected areas. They will also impose restrictions on livestock traffic and administer blood antiparasitic drugs. They might also establish a task force to deal with Hemorrhagic Septicaemia (HS). This incident highlights the importance of robust biosecurity measures in livestock management, particularly in preventing and controlling the spread of contagious diseases. Indonesia, as well as neighbouring countries, need to remain vigilant and collaborative in addressing such outbreaks to safeguard not only the livestock industry but also public health and food security.

Eid al-Adha/Idul Adha (Qurban Festival) 2024

Idul Adha, also known as the Festival of Sacrifice, is of great cultural and religious significance to Muslims worldwide. Scheduled for June 17, 2024, in Indonesia, this event involves the sacrificial offering of livestock over three days. As Eid approaches, markets brimming with livestock spring up, where buyers ensure the animals meet stringent health and quality standards set by religious authorities. Typically, Indonesians sacrifice goats, sheep, and cattle, with some pooling resources to purchase cattle, which can provide more meat. On Eid al-Adha, families gather at mosques or open fields to perform the ritual, distributing the meat to family, neighbours, and the less fortunate, following Islamic traditions.

Demand for livestock surges before Eid, enhancing local trade. Although rare, some imported Australian cattle are also used, albeit sparingly due to concerns that ear tags, which leave holes, might make them less desirable. A recent warning from an Institut Pertanian Bogor (IPB) highlighted concerns over Lumpy Skin Disease (LSD)-infected cattle, which are deemed unsuitable for sacrifice if symptoms are severe, another impact of the very visual disease.

For reference on how much qurban animal sold in Indonesia, sellers offer 200 kg of local cattle starting about 13 million IDR per head depending on the breed. Below is one example of prices offered by Sapi Bagus farm in Greater Jakarta area (jt=millions):

Indonesians at Beef Australia

There was a strong showing of Indonesian’s at Beef Australia last week. The delegation included representatives from GAPUSPINDO, the Indonesian lotfeeders association, who were able to meet with Minister for Agriculture Murray Watt and Department Secretart Adam Fennssey PSM. There was also a large contingent of young staff from Indonesia representing the Forum AWO. 5 fully funded delegates of the tour were sponsored by QLEA and Lampung Liveestock Pty Ltd.

The focus of the trip was the time they were able to spend at Beef Australia with many old and new friends, they also engaged in property tours, visited Raglans Feedlot, Gracemere Saleyards, and Iwasaki Wagyu Stud, and were guests at the Brahman Dinner. By all accounts they had an amazing time.

 

Vietnam : Steers AUD $4.75 / kg live weight (VND16,524.55 = 1AUD)

Cattle and beef prices in Vietnam have remained fairly stable over the last month with some very small increases reported.

The Asia Beef Network has reported an increase in fees for crossing the Cambodian border to about $3.30 AUD per head which is in addition to the approximately $14.50 AUD of quarantine charges incurred. Cattle coming through this route mostly originate from Thailand and Myanmar. These additional costs, on top of other transport, labour and weight loss mean imported cattle from these areas often trade at a slight premium above Australian cattle in Vietnam.

Vietnam at Beef Australia

A delegation of 22 key stakeholders from Vietnam’s beef and cattle industry toured to Australia, centred around Beef Australia 2024, from the 4th to the 12th May. The trip was supported by an Australia-Vietnam Enhanced Economic Engagement Grant (AVEG) project. The initiative is funded by the Australian Government’s Department of Foreign Affairs and Trade (DFAT) and aims to strengthen business and trade ties between the nations. The tour comprised of beef, cattle, and genetic importers, industry leaders, and government officials. During the trip the delegation attended Beef Australia, which provided invaluable networking opportunities with new and old friends. Following this event, delegates explored the beef and cattle supply chain in the Northern Territory and South East Queensland. With objectives ranging from sourcing genetics for the national program to connecting with beef and cattle exporters and exploring the latest technological advancements. The trip underscores the burgeoning partnership between Vietnam and Australia in the meat and cattle industry.

Philippines: Slaughter Steers AUD $3.71 / kg liveweight (P 37.70 = 1AUD)

The Philippines cattle and beef market has once again stayed stable , with the only relative change attributed to the slightly strengthening Aussie dollar. The slaughter steer price still sits at around the $3.45 – $3.85 AUD/kg (P.130/kg – P.145/kg. Knuckle prices in Mindanao wet market were up at $15.39 AUD/kg (P.580.00/kg) and supermarket $16.71 AUD/kg (P.630.00/kg). Chicken prices have dropped slightly to $4.51 AUD/kg – $5.76 AUD/kg (P.170.00 – P.215.00/kg) for non branded and Magnolia brand respectively. The Philippines have experienced a recent heatwave with temperatures reaching as high as 52 degrees. My contact reports a shortage of eggs and poultry products caused by the exceptionally high heat levels.

Australian Feeder Steers 

Big numbers of cattle out of Darwin and Townsville during March. Queensland has been the main benefactor with numbers almost double the same year-to-date period of last year.

2024 – Year to March figures for cattle/buffalo sea freight across Asia by state

Source: DAFF website

2024 – Year to March for cattle/buffalo sea freight comparison across Asian markets

0Source: DAFF website

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