Australia free to export beef to Indonesia, although only in a box

Since 2010, Indonesia has slashed beef imports from countries including Australia by about 75% under its so-called "self-sufficiency​" policy. But a lack of supply has driven up prices in the country.

This week, it confirmed quotas applying to live cattle for the second-half of the year will be brought forward, with a further review of supply and demand to be undertaken later in the year.

The measure is intended to stabilise the supply and cost of beef in Indonesia’s domestic markets ahead of Ramadan next month and the Eid Fitri Festival in August.

"It's a little unfortunate that the price of beef in the last few months has not been at the level the people would so desire​," said Gita Wirjawan, Indonesia’s trade minister.

Pay-back at last​

Indonesia’s move will no doubt go down well in Canberra’s corridors of power, with the country being Austalia’s biggest beneficiary of financial support. Last year alone, Indonesia received A$558m of aid from its southern neighbour when two-way trade was worth A$13.8bn the year before.

Australia’s trade and competitiveness minister, Craig Emerson, and Joe Ludwig, chief of the Ministry for Agriculture, Fisheries and Forestry welcomed the announcement, which they said will benefit Australian beef producers and exporters.

Emerson most recently discussed local beef supply with his Indonesian counterpart, Wirjawan, in Surabaya in April. He is also scheduled for talks with Wirjawan this week in Paris, where both are taking part in the annual Ministerial Council meeting of the Organisation for Economic Co-operation and Development.

"Indonesia continues to view Australia as a quality supplier of beef for its domestic market​," Emerson said.

"The Indonesian Government’s decision to increase the import of Australian premium beef is a clear reflection of our strong, ongoing trade relationship​."

Also flagged was an additional quota exemption to enable Indonesia's rice trading enterprise Bulog to import beef products, such as frozen carcasses, for supply to local markets.

Box fresh​

Although quantities are yet to be revealed – Indonesia is introducing almost unlimited imports of boxed prime beef until the end of the year, but it must be flown and not shipped to the country - Ludwig said distributors would be able to import enough premium Australian beef to meet demand from Indonesia’s high-end food services sector, which is traditionally higher during the Islamic festive season at this time of year.

"From now on there won't be any restriction on the quantity of prime cuts that we need to be imported into Indonesia, from anywhere, Australia, New Zealand​," Wirjawan said.

"This is great news for Australian beef producers, especially those who are doing it tough​," Ludwig said.

"I have raised the need to increase quotas directly with my Indonesian counterparts during my three visits to Indonesia over the last two years​.

"These decisions reflect the ability of Australia’s government and industry to work cooperatively with Indonesia​."

However, the Indonesian Meat Importers Association sees the plan as a red herring. Its executive director, Thomas Sembiring, confessed to the Australian broadcaster, ABC, that he found the time frame unsustainable.

"Bringing in box beef here is not like buying meat at the supermarket​," he said. "We have to discuss the price, shipping lines, and when, and many other aspects​," he said, adding it would take months to organise the imports, while Australia's live export trade may not be ready to send three months' worth of cattle next month either.