131st Edition: November 2024

Key points:

• Indian Buffalo Meat imports in Indonesia plummet with little impact on market prices.
• Indonesian President Prabowo Subianto focuses on food self-sufficiency, diversifying trade partnerships through BRICS to reduce import dependency.
• Philippines National Dairy Authority to import cattle for five new stock farms, aiming to boost the national dairy herd to 80,000 head by 2028.

Regional Trends and Overview

A positive outlook from MLA

MLA’s latest projections are predicting a 32 percent increase in total cattle exports over the next three years, reaching 890,000 head by 2026. Given that cattle exports were 600,000 in 2022, and factoring in disruptions from Foot and Mouth Disease, Lumpy Skin Disease, Indonesian import permit delays, a sharp decline in dairy cattle exports to China, and the effective cessation of trade to Israel, this rebound highlights Southeast Asia’s capacity—especially Indonesia’s – to absorb Australian cattle when prices align with market demand.

The projections do not include any mention of dairy cattle for Indonesia, if you are an optimist and believe the hype, could add hundreds of thousands to annual totals in the coming year.

Cambodia

It has been a few years since I was last in Cambodia. Like all Asian cities, Phenom Phen is always changing and the investment in new restaurants and commercial buildings is clear. But it is still Cambodia and a developing economy, facing whole generational knowledge and leadership gaps left during the Pol Pot regime of the 1970s.

Cambodia’s cattle population is fragmented and the sector provides into the local market and as a trader into Southern Vietnam. Unlike the Laos trade which has an officially recognised trade agreement, trade through Cambodia is technically all unofficial, although established and known. It has struggled under the pressures of Foot-and-Mouth Disease (FMD) and Lumpy Skin Disease (LSD). In recent years, reports indicated increased exports of live animals driven by local producers eager to liquidate their herds. For many families, cattle serve as a vital store of value, and the risk of disease-induced losses threatens not just livestock but entire family savings. This is the same issue being faced in our major cattle trading destination, Indonesia, with small producers offloading their small herds either directly due to, or because of the risk of LSD and FMD. Fresh produce markets are still the main form of sales to locals and there are large active wet markets in the city, busy with local shoppers.

Photo: Local Cambodian market presentation of fresh meat and vegetables

Indonesia: Slaughter Steers $4.48 AUD per kg live weight (IDR 10,383 = $1 AUD)

Beef Prices

Beef prices in local markets are hovering around IDR 130,000 ($12.52 AUD), which is the government imposed price cap for fresh beef. Beef carcass prices have experienced a slight dip, with the average per kilogram dropping from IDR 92,500 ($8.90 AUD) last month to IDR 91,500 ($8.81 AUD)  per kg currently. The price of broiler chickens is averaging around IDR 37,000 ($3.56 AUD) per kg.

Indian Buffalo Meat Import Drop

The national Badan Pusat Statistik (Central Statistics Agency, BPS) reported an 85pc drop in Indian buffalo meat (IBM) imports for 2024 YTD YOY. BPS noted that of the full 270,000-tonne beef/buffalo total meat import quota which had been set for 2024 about 219,000 tonnes had been issued as approved import permits but by the end of August, only 100,000 tonnes had actually been imported. Of this around 70,000 tonnes came from Australia, with India contributing only 11,800 tonnes. To put that in context, India supplied around 77,000 tonnes by the same time last year.

Industry sources have explained that coming into the 2024 year there were massive backlogs of IBM in storage which seems to have finally worked its way through the system in recent months. The heightened rate of slaughter due to FMD and LSD management and increased Australian live cattle imports have also kept the beef market well supplied, despite the lower IBM import numbers.

This dramatic decline in IBM imports also follows the government’s decision to allocate import permits exclusively to PT Berdikari and PT Perusahaan Perdagangan Indonesia (PPI) in 2024, sidelining the traditional state owned enterprise importer, BULOG, which I reported on back in May. It will be interesting to see how the remainder of the year plays out with import permits set to expire at the end of December, there could be a last minute rush to utilise quotas or conversely, if it stays on the same trajectory Indonesia could find itself filling only half of its import quota for the year.

New President Prabowo Subianto’s Policies Signal Shift in Indonesia’s Food and Trade Landscape

With Prabowo Subianto inaugurated as Indonesia’s president on 20 October 2024, significant changes are emerging in agricultural and food policies. Key reforms include creating the Coordinating Ministry for Food Affairs, focused on achieving food self-sufficiency and reducing import dependence by 2028. This self-sufficiency drive is focused on food staples like rice, sugarcane and corn but will also include meat and dairy products.

Indonesia’s new BRICS membership is another strategic move that will impact the country’s food security situation, aligning with non-Western economies and possibly facilitating alternative trade routes and dollar-free transactions, potentially reducing costs. This shift opens doors to collaborations with livestock-strong countries like Brazil and India, supporting Prabowo’s goal of beef self-sufficiency. Prabowo met with President Xi on Sat 9th November in his first overseas visit.

He is now poised to visit the US. And the recent election of Trump opens up the possibility of also strengthening ties with the US, especially for investment into Indonesia’s nickel industry for EV battery production. Indonesia has the largest nickel reserves in the world. Indonesia has been courting Trump ally Elon Musk but the industries alignment with China, tariffs, and environmental concerns have stifled trade possibilities. It is possible with changes in trade and environmental policy over the course of the Trump presidency, that Indonesia could see significant investment from the US.

The Free Meal Programme is high on Prabowo’s agenda with Vietnamese firm TH Group recently committing to dairy investments by 2025. Deputy Agriculture Minister Sudaryono seems to be acknowledging the challenges of ramping up dairy production with recent comments stating that eggs and chicken may need to supplement dairy in the programme.

Import permits

Importers and exporters alike are hoping to avoid a repeat of the import permit delays experienced at the beginning of 2024, when it took around six weeks for new permits to be issued. This delay caused major disruptions across the live trade, with exporters facing substantial costs as cattle remained in yards and chartered vessels sat idle.

The lapse of import permits, which expire at the end of each calendar year, particularly affected importers by creating gaps in feedlot inventory and disrupting their buying schedules. This is also likely to be part of the reason for the uptick in current trade activity as importers want to make sure they don’t get caught out trying to buy closer to the March 2025 festival period. Exporters are likely to be cautious about their vessel commitments as the new year approaches, with some considering ways to mitigate their risks by focusing on alternative markets during January.

Vietnam: Slaughter Steers $4.70 AUD per kg live weight (VND 16,649 = $1 AUD)

The Vietnam cattle market remains steady. Like Indonesia, Vietnamese local beef production is going head to head with cheap imported Indian Buffalo Meat and regional cattle, making conditions very difficult for the abattoirs and meat traders who source Australian live cattle. The price of imported live cattle from Myanmar and Thailand has continued to drop over the last couple of months and given that many of these cattle still enter the country through informal routes, they don’t attract the same import costs as Australian cattle making them very attractive to buyers.

Philippines: Slaughter Steers $2.88 AUD per kg Live weight (P38.53 = $1 AUD)

Prices

The Australian Dollar is stable against the Philippine Peso, In wet markets and supermarkets the beef rump prices sit at about P340 per kg ($8.82 AUD) and P420 per kg ($10.90 AUD) respectively. Local cattle prices in Mindanao are still pegged between P117 per kg ($3.05 AUD) live weight, and the hot carcass meat price is approximately P280 per kg ($7.27 AUD).

Live pork prices are around P180 per kg ($4.67 AUD), and pork carcass goes for P240.00 per kg ($6.23 AUD). In wet markets, non-branded broiler chicken is priced at P180.00 per kg ($4.67 AUD), while in supermarkets, the Magnolia brand is priced at P230.00 per kg ($5.97 AUD).

Photos: Local meat and livestock sales in Mindanao

National Dairy Authority to Expand Breeder Herd with New Imports

The Philippine’s National Dairy Authority (NDA) has announced plans to import cattle for its stock farms, aiming to multiply the herd and increase local dairy animal numbers. Offspring from these imported, acclimatised cattle will eventually be distributed to dairy farmers to strengthen the domestic dairy supply.

Five new stock farms are set to open by early 2025 in Nueva Ecija, Bohol, Bukidnon, Cotabato, and Agusan Del Sur. The NDA expects these efforts to raise the national dairy herd to around 80,000 head. Additionally, the agency is working on enhancing milk yields and providing training for farmers, with a target to reach 80 million litres of annual dairy production by 2028—around 5% of national demand. Currently, the Philippines produces less than 1% of its milk domestically, relying heavily on imports, which are expected to grow by 7.3% to 2.49 million metric tons in 2024.

Philippine Government Steps Up ASF Control with Hog Vaccines

The Department of Agriculture (DA) is battling ASF by encouraging progress in its vaccination programme against African swine fever (ASF) after initial results showed strong immunity responses in vaccinated hogs. Assistant Secretary Constante Palabrica confirmed plans to scale up the effort, with the government set to procure 500,000 additional vaccine doses from Vietnam this month and 100,000 more by year-end. ASF remains a pressing challenge for the Philippine hog industry, with active cases reported in 30 provinces across 14 regions as of October.

Australia: Feeder Steers Darwin $3.35

As reported by James Nason last week , in October and early November, Australian cattle exports to Indonesia surged as feedlots prepared for Ramadan next March. Key ports like Darwin and Townsville have been active, with feeder steer prices climbing to 335c/kg+, liveweight, expected to hit as high as 340c/kg by December. The main challenge is limited shipping availability with a finite number of AMSA approved ships available. This uptick out of Darwin has eased pressure on Queensland’s feeder and slaughter markets​​​.

2024 Year to October for cattle exports – comparison across SE Asian markets

Source: DAFF