Indonesia Cuts Live Cattle Import Quota in Blow to Australia

July 14, 2015 10:33 AM
Indonesia Cuts Live Cattle Import Quota in Blow to Australia

Australia’s live cattle shipments to Indonesia are set to plunge this quarter after the biggest buyer cut its import quota by 80 percent to rely more on domestic supply.

Indonesia will import 50,000 head in the third quarter, Partogi Pangaribuan, director general of foreign trade at the Trade Ministry said on Monday. That’s down from 250,000 in the previous three months.

The country is Australia’s top live cattle market, buying 56 percent of exports last year. The government has pledged to reduce reliance on food imports, with President Joko Widodo seeking to promote home-grown commodities and industries. The quota may be increased if domestic supply isn’t enough, Pangaribuan said in Jakarta. Australia is already looking for alternative markets, Agriculture Minister Barnaby Joyce said.

“We were surprised and disappointed at the figure, it wasn’t what we expected,” Alison Penfold, Chief Executive Officer at the Australian Livestock Exporters’ Council, said by phone from Canberra. “It presents some challenges.”

Australia’s live cattle exports to Indonesia surged 61 percent to 728,404 head in 2014 from a year earlier, according to industry group Meat & Livestock Australia. The combined value of beef, offal and live cattle exports to Indonesia was A$883 million ($656 million) in 2014, data on the group’s website show.

Volatile Market

“It’s something I hope we can rectify soon,” Joyce said. “It is a volatile market and that’s why I think it’s so much better that we work toward an annual quota.”

In 2011, Australia banned live cattle exports to Indonesia for a month after television footage showed animals being mistreated. The suspension was lifted amid stricter conditions requiring tracking and auditing.

The total value of the nation’s live cattle exports was A$249 million in the first three months of 2015, according to the Australian Bureau of Statistics. That’s up 32 percent from the same period in 2014.

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