News

Indonesia orders market intervention for beef

James Nason 22/11/2012

A wet market vendor selling beef and buffalo meat near Jakarta.Indonesia’s Central Government has revealed plans to bring more cattle into Jakarta to relieve a worsening beef shortage.

However the country will not turn to imports, with the Coordinating Economic Minister Hatta Rajasa stating that the Government can meet Jakarta's supply needs with local cattle from feedlots and by bringing cattle to Jakarta from the eastern Indonesian island of Nusa Tengarra Barat.

The move comes in response to growing signs that last year’s decision to cut import quotas by half in line with aspirations to achieve self-sufficiency in beef production is now taking a genuine toll on meat supplies in Jakarta and is forcing prices to unaffordable levels for consumers. 

Meat vendors in the capital have been striking in the past week to draw attention to what local media outlets have described as “staggering increases” in the price of meat, linked to import cutbacks and the resulting insufficient stocks.

Reports have stated that beef kiosks in several markets have been empty while vendors in others arrived at their stalls last Friday and ”just sat down and talked with one another”.

One vendor quoted by the Kompas newspaper said the slaughter house had set a price of Rp 85,000 [US$8.83] for one kilogram of meat. “With such a high price, how much meat will we have to sell to our customers?,” he asked.

The price of meat in many markets has now reportedly reached Rp 100,000 per kilogram, far above the normal price of Rp 60,000.

In response to the deepening crisis, the Jakarta Post has today reported that Indonesia’s Coordinating Economic Minister Hatta Rajasa has announced a market intervention “to bring down the price of beef while at the same time looking for the root cause of its skyrocketing price”.

“The increasing price of beef has affected small-scale food processing industries that use the meat such as bakso [meatball],” he told the newspaper at the 21st ASEAN Summit.

“Those small-scale industries cannot afford such high prices – they may have to close their businesses.”

The Jakarta Post today reported that the minister had asked his deputies to conduct a coordination meeting with all related ministries to evaluate the situation.

The market intervention was meant to not only stabilise the price of been but also to keep small-scale industries operating thus preventing mass layoffs.

He added that the matter had to be handled swiftly in the Java and Greater Jakarta area.

“The problem can spread to other regions in the country if not properly handled.”

An Indonesian meat industry source told Beef Central that the Government has also stated it will bring in local cattle to overcome the beef shortage in Jakarta and surrounding areas.

“The plan is to bring in 22,000 cattles for slaughter, consisting of 17,000 from feed lotters and 5000 from local farmers in NTB (Nusa Tenggara Barat),” Beef Central’s source said.

“But the effect could not be immediate as transport and slaughtering take time.

“The statement comes from deputy minister of trade.

“He admits the country has transportation problems by sea as well as by road, and has slaughterhouses not up to standard.

“But yet both the government and the parliament insist that they should not consider more import quota, they still insist that the country has enough local cattles.”
 

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