Indonesian version of this report

Key Points

• Coronavirus response continues to disrupt markets
• Aussie $ collapses against most currencies
• In a crisis, food supplies become one of the most critical issue

Indonesia : Slaughter Steers AUD $4.19/kg live weight (Rp9,300 = $1AUD)

It is not surprising that I am getting mixed signals from my sources in Indonesia with increasing demand in some areas and depressed demand in others.

The increased demand is reported by some observers in West Java where demand for food is one of the few constants amongst the virus induced chaos.

On the other hand, traditional fast food outlets such as the Padang style restaurants, low end food outlets, street vendors and others are experiencing a collapse in sales as a large proportion of their customers were travellers or people out on the streets conducting their normal business.

These low cost retail food businesses represent a significant proportion of the fresh and frozen beef supply chain.

Low priced beef is sourced through frozen Indian buffalo and Brazilian product but the offal can only come from locally slaughtered animals.

As both India and Brazil are not free from FMD without vaccination they are prohibited from exporting offal so local kill is the only source.

Padang especially offers a high proportion of offals in its wide array of dishes including liver, kidneys, lung, tongue, feet, skin, brains and various other bits. As the numbers of travellers has collapsed so has the demand for offal which impacts on the number of cattle which the local butchers are asked to slaughter each night. If the offal can’t be sold then the butcher can’t just rely on the sale of the beef so the numbers killed each night is going down.

In other areas where simple domestic consumption is the main market driver the demand and price for cattle is up as the backlog of overfat cattle has disappeared so the discounting for fat cattle has ended.

Prices quoted as low as Rp38,000 in Lampung where reduced travellers are a factor while in some parts of West Java quotes have been as high as Rp43,000 per kg live weight for fat slaughter steers.

I have used a figure of Rp39,000 for this month’s indicator price, the same as last month.

Usually the lead up to Ramadan and Lebaran is one the most critical times of the year in respect to the focus on beef supplies but the pandemic has changed everyone’s attention to the management of human health as the highest priority.

The traditional return home for the holiday period now presents a serious potential risk of spreading the virus to other family members while breaking the fast during Ramadan won’t easily be celebrated with others.

 

 

 

Last month I reported that brown onions were particularly hard to find in Bali and if they could be located the prices were as high as AUD$10 per kg.

Just before I left Bali in mid-March I took the photo below at my local supermarket where the prices for onions had risen to Rp276,500 or close to AUD$30 per kg!

On arrival in Darwin I was happy to see that Woolies still had plenty of onions for AUD$2.50 per kg.

 

Darwin feeder steer prices have weakened towards the end of March due to a combination of uncertainty about the future of the markets and the imminent opening of the mustering season in an environment where many areas across northern Australia failed once again to receive a normal wet season.

The indicator rate for the end of March is $3.40 and expected to fall further.

Vietnam:  Slaughter Steers AUD $4.93 / kg (VND14,500 to $1AUD)

Slaughter cattle prices in Vietnam have dropped Dong2,000 per kg during March or about 3% with the new indicator rate at Dong71,500 per kg live weight.

All of Vietnam is in a lockdown from the beginning of April creating havoc with markets the same as almost everywhere else around the world.

Shipments of slaughter cattle continue apace from Australia although I don’t have up to date advice on the actual numbers except to know they are substantial.

During a crisis the last thing people stop buying is food so hopefully Australia can continue to supply live cattle to Vietnam to support their vital protein supply chains.

Unfortunately for Vietnam, African Swine Fever (ASF) is also creating renewed problems as the number of new outbreaks have increased dramatically during the second half of March.

See the FAO graphic below. The Ministry of Agriculture (MARD) is trying to limit the damage by allowing healthy pigs to be slaughtered in infected areas for consumption within those areas.

This at least reduces waste and allows utilization of the pork while the risk of further spread is minimised.

During March the Prime Minister also announced an increase in compensation for slaughtered piglets to 80% of commercial value while the rate for boars and sows is x 1.5-2 of the normal compensation rate.

 

China: Slaughter Cattle AUD $7.54 / kg  (RMB 4.35 = AUD$)

Beef is available in the supermarkets in Beijing but the wet markets frequented by my source remain closed.

Slaughter cattle prices are steady for the moment at Y33 for Beijing and Y32.6 in Shanghai.

Wet markets are open in Shanghai. Supermarket prices have decreased a little for all the common meats including beef, chicken and pork which must be a great relief to Chinese consumers as they emerge from their recent isolation.

My sources advise that they are now back at work although with restrictions on contact and gatherings as would be expected. The very large increase in the AUD cattle price above is purely the fault of the collapsing AUD$.

In a rare piece of good news, the rate of infection with ASF is reported to be decreasing across China.

See the graphic below from the FAO website.

Everyone is looking forward to spring.

 

Philippines: Slaughter Cattle AUD $No Quote / kg (Peso 31.5 to AUD$1)

My agent reports that the Philippine government has fixed prices for major food items at the same time as locking down their population to essential movements as we are seeing in most other parts of the world affected by the virus.

These “fixed” prices tend to be a little lower than current market rates.

Mindanao is largely spared from the high level of infections in Luzon but the restrictions on movements around this southern island are strictly enforced just the same as the rest of the country with military checkpoints everywhere with orders to lock up anyone travelling without special permission.

All non-food businesses are closed with the exemption of health services, banks and money transfer offices.

The good news is that the Peso is strengthening and the price of oil is falling fast although almost nobody is allowed out to drive their car at the moment.

 

Thailand: Slaughter Steers AUD $4.42 / kg (Baht 20.0 to $1AUD)

Slaughter cattle prices have slipped again this month from Baht 96 to Baht 88.5 per kg live weight.

I am sure the Thai beef industry is hoping that China will open its doors again to live cattle imports so they can commence supply to the new export market in Kunming which up until recently held so much promise.

 

Australian live export cattle ships

I have temporarily returned from Bali to Darwin where I discovered that stockmen for livestock vessels are in short supply as they now need to sail back on the ship instead of flying home.

I quickly renewed my stockman accreditation and am currently sailing with a shipment of cattle from Darwin to Indonesia.

It is a very international affair with Aussie cattle onboard a ship owned by a Dutch company, sailing under a Luxembourg flag managed by a very competent Filipino crew.

Fortunately for me the cook is a star. Yesterday he produced a delicious oxtail stew from frozen Brazilian beef processed by Minerva and purchased from the providores in Singapore. And the label on the Heineken cans is in Vietnamese.

March 2020 prices

These figures are converted to AUD$ from their respective currencies which are changing every day so the actual prices here are corrupted slightly by constant foreign exchange fluctuations. The AUD$ figures presented below should be regarded as reliable trends rather than exact individual prices. Where possible the meat cut used for pricing in the wet and supermarket is Knuckle / Round.

 

Location	Date	Wet Market AUD$/kg	Super market $/kg	Broiler chicken $/kg	Live Steer Slaughter Wt AUD$/kg
Indonesia	Oct 19	13.54	16.64	3.96	4.17
Rp9,600	Nov 19	13.54	16.35	3.64	3.96
Rp9,650	Dec 19	13.47	13.47	3.63	4.09
Rp9,300	Jan 2020	13.98	19.14	3.76	4.19
Rp9,250	Feb 2020	14.05	18.38	3.78	4.22
Rp9,300	March 20	13.98	19.14 Buffalo $8.60	3.76	4.19
Philippines	Oct 19	12.86	13.14	4.43	4.94
P34.6	Nov 19	13.87	13.87	4.91	5.35
P35.1	Dec 19	13.68	13.68	4.84	5.27
P34.8	Jan 2020	13.79	13.79	4.45	5.32
P33.7	Feb 2020	14.84	14.84	4.45	6.23
P31.5	March 20	–	–	–	–
Thailand	Oct 19	10.63	NA	3.38	4.20
THB20.6	Nov 19	10.68	NA	3.40	4.22
THB20.9	Dec 19	11.00	NA	3.35	4.78
THB20.8	Jan 2020	11.06	NA	3.37	5.10
THB20.7	Feb 2020	11.11	NA	3.38	4.64
THB20.0	March 20	11.00	NA	3.50	4.42
Vietnam	Oct 19	19.62	18.10	5.06	4.68
D15,800	Nov 19	19.62	18.10	4.43	4.68
D16,000	Dec 19	19.37	17.88	4.99	4.66
D15,900	Jan 2020	19.50	17.99	5.03	4.68
D15,400	Feb 2020	20.13	20.39	5.13	4.84
D14,500	March 20	21.36	21.66	7.03	4.93
China Beijing	Oct 19	16.15	NA	4.89	6.83
Y4.79	Nov 19	17.12	19.21	4.13	6.68
Y4.84	Dec 19	16.12	19.01	3.72	6.61
Y4.72	Jan 2020	17.80	15.17	4.45	6.78
Y4.64	Feb 2020	18.53	16.81	3.88	7.11
Y4.35	March 20	–	17.93	4.14	7.58
Shanghai	Oct 19	18.63	24.01	4.03	6.6 3
Pork per kg	Nov 19	20.04	24.22	4.07	7.09
Beijing Y46.6	Dec 19	19.83	25.20	3.88	7.02
Shanghai 40.2	Jan 2020	20.3	25.00	4.24	6.78
	Feb 2020	20.69	24.14	3.88	7.11
	March 20	21.60	24.83	4.14	7.49
Darwin Feeder Steer	June 19 $2.90	July 19 $3.00	August 19 $3.15	Sept 19 $3.15	October 19 $3.30
	Nov 19 $3.35	Dec 19 $3.25	January 2020 $3.25	Feb 2020 $3.80	March 2020 $3.40