INDONESIA’S move to relax its trade restrictions on secondary beef cuts has been heralded a big step forward for the strengthening of trade and political relations with Australia.
The breaking down of technical barriers in a market considered extremely important to Australian beef, given Indonesia’s geographical location and population size, has been high on the agenda of industry leaders for some time.
Beef producer and processor representative groups say the changes augur well for negotiations on the Indonesia Australia Comprehensive Economic Partnership Agreement (IA-CEPA) which recommenced in May.
The revised regulations provide for an expanded list of eligible beef cuts to be exported to Indonesia, including edible offal such as liver, heart, feet and lungs.
The change, already in place, represents the re-opening a market that was worth $42 million to Australian exporters two years ago.
Cattle Council of Australia, which has consistently called for improved ability to access this market, said the trade relationship between Indonesia and Australia was very important, particularly to the beef industry.
The lifting of these restrictions provided a fantastic opportunity for Australian beef producers to showcase an alternative option to prime cuts, CCA said.
The Australian Meat Industry Council’s national director processing Steve Martyn said Indonesia had struggled to get right the balance between encouraging domestic beef production and importing to ensure its people had access to high quality, reasonably-priced product.
“Yes, Indonesia has focussed too heavily on self sufficiency in recent times, given the growth of demand for animal protein among its population,” he said.
“We have invested a lot of time and money into building the relationship with Indonesia, both politically and trade-wise, and like to think this gradual relaxation of barriers to trade is a reflection of that.”
Meat and Livestock Australia reports beef retail prices at Jakarta wet markets has shown strong increases, due to a combination of rising consumption, import restrictions and high inflation.
Asked if the development was particularly advantageous given current demand decline in key Australian export markets, courtesy of Australia’s cattle shortage, Mr Martyn said Indonesia would always be a very important market to Australia’s beef and cattle industries, irrespective of market conditions at any given time.
Indonesian importers can now also apply to import beef at any time of the year, with import permits valid for six months.
Acting Prime Minister Barnaby Joyce said that provided more certainty for commercial partnerships between importers and exporters, reducing costs in the supply chain and allowing for better planning to ensure demand could be reliably met.
Before restrictions were put in place in January 2105, Australia shipped almost 20,000 tonnes of secondary beef cuts to Indonesia.
Australia’s total boxed beef trade with Indonesia in 2014 was worth $327m.
Mr Joyce said over the next few decades significant economic and population growth was expected to changed Indonesia’s demand for food.
“Diets will become more diverse and demand for quality protein will increase,” he said.
“The total population of Indonesia is forecast to increase by almost 25 per cent or 62 million people to 322 million by 2050.
“It’s a win–win for both nations: Indonesian consumers will have a wider range of quality beef products to choose from, Indonesian importers can better plan for and manage demand, and Australian exporters regain access to a market in which we can compete very strongly on our merits.”
