Export

Importers signal Indonesia quota boost

James Nason, 19/04/2013

In positive news for Australia’s northern cattle industry, Indonesian trade sources have revealed that potentially significant increases in import quotas for cattle are imminent.

Highly-placed sources within the trade, speaking under condition of anonymity, have told Beef Central that Indonesia’s trade ministry has privately confirmed to importers that additional quota will be allocated this year, under new arrangements expected to be announced officially in coming days.

The changes as described to Beef Central will see the 46,000 head quota currently allocated for the third quarter brought forward and added to the 117,000 head currently allocated for the second (and current) quarter.

Similarly, the 46,000 head currently allocated for the fourth quarter will be brought forward into the third quarter.

New, additional quota is then expected to be allocated for the fourth quarter.

Sources are divided on what that will entail.  One said it was not yet clear what the additional numbers will be. “Details on how, how many and when will only be cleared by next week after meetings between ministry of trade and ministry of agriculture officials,” one said.

Another said that possible additional quota volumes of between 30,000 tonnes and 70,000 tonnes (comprising both boxed beef and live cattle imports) for the fourth quarter had been discussed.

Working on those numbers – and stressing that additional quota numbers are yet to be confirmed – a 50-50 split between boxed beef and live cattle would equate to potential additional quota of 15,000t to 35,000t of boxed beef and 83,000 cattle and 190,000 cattle.

It again must be emphasised that this information has yet to be confirmed at an official level, but originates from discussions Beef Central has had with two trusted and senior industry sources deeply embedded within Indonesia’s beef and cattle trade.

These developments coincide with reports in Indonesian news outlets this morning quoting Indonesian ministers on plans to relax import quotas on prime cuts of beef to ease supply shortages and lower beef prices.

Given that the announcements relate specifically to prime cuts which represent a fraction of Australia’s beef trade to Indonesia, many in the trade were puzzled as to how those measures would help to reduce the inflationary pressures on beef prices.

The moves to bring allocated cattle import quotas forward and introduce additional quota in the fourth quarter would be seen as making a much more effective contribution to bringing down beef prices.

“In short, additional quota is confirmed, we just need to wait for further details,” one source said.

Indeed the catalyst for the sudden change in attitudes surrounding import quotas is said to be growing urgency on the Indonesian Government to reduce inflationary pressure, which has been driven close to a two-year high by climbing prices for staple foods.

Prices for key commodities including beef have been rising sharply this year in the wake of shortages that have followed Indonesian Government policies to cut import quotas in line with aspirations to achieve self-sufficiency targets by 2014.

The impact of high prices at consumer level has reportedly led President Yudhoyono to admonish several key ministers for failing to do more to improve food supply and relieve the burden of high prices.

In further signs that Indonesia is now moving to rein in the factors that are stoking inflationary pressure Indonesian trade minister Gita Wirjawan publicly announced last week that quantity limits on horticulture imports would be scrapped, as reported by Beef Central on Monday.

The trade minister also hinted at that time that while beef-related quotas would not be removed, they could be increased if required.

In another development that is likely to have a bearing on import quotas going forward, Indonesia has recently announced that it will conduct another national cattle census in May.

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