Most Read Contributor in Australia, September 2016
Australian – Indonesian cattle Forum: the first
step in strengthening Australian beef exports
In a recent meeting with Indonesia's President Susilo
Bambang, Prime Minister Kevin Rudd announced the establishment of
the Indonesia-Australia Red Meat and Cattle Forum.
The Forum is intended to:
Increase collaboration between Australian and Indonesian cattle
Enhance trade and investment in the beef and cattle industry of
Recommend activities to strengthen the meat supply chain.
The Australian government will provide $60 million over the next
10 years to assist the Forum in advancing these outcomes.
The Forum's members will be comprised of representatives of
the beef and cattle industries and other industry figures as well
as senior government officials.
Andrew Ogilvie, the president of the Cattle Council of
Australia, was tempered in his assessment of the new Forum. While
Ogilvie felt "very positive" that "maybe finally
we've turned a corner" he reiterated that the cattle
industry would continue in talks with government and would
"just have to wait and see what develops".
Indonesia – Australia relations
The talks will provide a foundation to continue developing the
beef and cattle relationship between Australia and Indonesia, which
has been strained in recent years, especially since the 5 week
suspension of live exports to Indonesia in June 2011 following
evidence of animal welfare abuses in some Indonesian abattoirs.
Approximately 750,000 live head of cattle were being exported to
Indonesia at the peak of the industry in 2009. Since that peak,
Indonesia has consistently reduced their annual live cattle import
quota from Australia, which in 2013 totalled 267,000 head of
cattle, less than 40% of 2009 levels.
Since reducing its import quotas, Indonesia has seen a shortage
in beef supply and a subsequent rise in local prices. To combat
this, in late May, Indonesia relaxed their import quota to exempt
'premium' Australian beef. In parallel with increased
Australian beef imports, live cattle quotas set for the second half
of 2013 will be brought forward and another review of the quotas
will be undertaken at the end of 2013, in a positive sign for the
Australian livestock export industry.
Where does this leave us?
Indonesia has a rising consumer class which is expected to
expand to 135 million people by 2030 (increasing by 90 million
people since 2010). This middle class expansion is expected to
considerably drive up beef consumption. In a business breakfast
speech last Friday in Jakarta, Prime Minister Kevin Rudd suggested
that "[B]y 2015 Indonesian beef consumption of 530 000 tonnes
will exceed domestic production" and will therefore require
supplemented supply from foreign markets.
Australia is well placed to fill this void provided that
suppliers have access to appropriate capital improvements. The
announcement of the Forum may well deliver opportunities for
investment both inbound into the Indonesian beef industry and
outbound from Indonesian investors.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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