TL;DR:
- Australia’s cattle export industry is awaiting Indonesia’s issuance of 2024 import permits, with delays causing uncertainty ahead of significant religious festivals.
- Indonesia has allocated quotas for Indian Buffalo Meat and Brazilian boxed beef but has yet to release cattle import permits, affecting planned exports.
- The delay is compounded by wet weather challenges and the upcoming Indonesian General elections, with the industry closely monitoring the situation for developments.
The Australian northern cattle trade is currently on hold, awaiting the issuance of official cattle import permits by Indonesia for the year 2024. While Indonesia has promptly allocated import quotas for Indian Buffalo Meat and Brazilian boxed beef, the delay in releasing cattle import permits is causing uncertainty within the Australian industry, especially with significant religious festivals on the horizon.
Indonesia’s swift action on meat import permits includes a 100,000-tonne quota for Indian Buffalo Meat through state-owned Bulog and an additional 50,000 tonnes for private-sector importers. Furthermore, a 20,000-tonne quota for boxed beef imports from Brazil through ID Foods, a government-controlled entity, has been set. However, the anticipated cattle import permits for 2024 remain pending, causing a stall in new orders.
According to Indonesian Agriculture Ministry official Inti Pertiwi Nashwari, Indonesia aims to import 676,000 head of cattle and 320,352 metric tons of frozen meat in 2024 to meet domestic demand.
It’s important to note that these figures represent overarching quotas and do not ensure the actual import volume, which will be influenced by market dynamics, including competition from cheaper meat sources and consumer demand. Historical data shows that actual exports from Australia in recent years have been significantly lower than the allocated quotas.
Concerns Over Permit Delays
The delay in issuing cattle import permits is becoming increasingly concerning for the industry, as January nears its end without any permits.
The upcoming Ramadan period in early March, a time of peak beef consumption in Indonesia, underscores the urgency of the situation. Exporters, including one with cattle ready at a Northern Territory export depot and a ship anchored off Darwin, are facing mounting costs as they await permit issuance.
Challenges in Supply Due to Wet Weather
The anticipation for new orders once permits are issued is compounded by supply challenges, with wet weather across the Top End hindering cattle movement. Producers enjoying a good start to the year may also lack urgency in selling cattle before the traditional mustering season begins in March/April. Currently, quoting prices remain speculative, with the last shipments to Indonesia in December reportedly at 310c/kg liveweight.
Political Context and Future Considerations
The delay in permit issuance may also be influenced by the upcoming Indonesian General elections on February 14, which will see a new president elected due to incumbent Joko Widodo’s ineligibility for a third term. The election’s outcome and its timing could be affecting the permit process.
Dr Michael Patching’s recent report highlights the significant concern over the lack of permits, especially as feedlots aim to fill inventories for Ramadan and subsequent festival periods. With the Islamic lunar calendar causing Ramadan to shift earlier each year, the industry is already looking ahead to the demands for Ramadan 2025, which will necessitate early cattle imports from Australia.
