The Indonesian government is reportedly looking to Mexico as an alternative source of live cattle, after Australian cattle prices hit record highs and beef sellers in Jakarta went on strike.
The main point:
- Jakarta butchers go on strike when Australian cattle prices hit record highs
- The Indonesian government is reportedly looking to source live cows from Mexico
- 30 year cattle trade relationship between Indonesia and Australia “in danger of collapse”
In Indonesia, the government sets a price ceiling for beef as part of an effort to reduce the cost of staple food.
However, the low herd of Australian cattle and the high demand from Indonesia, together increase the price record levels over the last few months, butchers cannot increase their prices to cover costs.
So, for three days last week, butchers vacated their stalls in the Jakarta wet market to protest their inability to raise prices higher than the government-mandated limit.
Indonesian cattle industry consultant Robi Agustiar said the feedlot for Indonesian cattle was in trouble.
“Currently, the feedlot price is 48,000 rupiah per kilogram [the feedlots] already bought a cow from Australia for 56,000 rupiah, “he said.
Chairman of the Indonesian Feedlot Association, Didiek Purwanto, said feedlot capacity in Indonesia is around 40 percent.
“Since the last quarter, the feedlot has only been trying to survive in order to retain its customers – not thinking about profit, with the hope that in the future, if conditions improve, their customers will remain and continue to operate, said Purwanto.
“However, the price for live cattle from Australia is already [now] reach a [level] which no longer allows the feedlot to continue its operation.
This also makes the Government of Indonesia pay attention and request feedlots to find alternative sources of livestock because Australia is increasingly unable to provide certainty of supply.
Since November 2020, ex-Darwin feeder steers to Indonesia have been selling for around $ 4 per kilogram, with certain types of cattle selling for up to $ 4.10 per kilogram.
Indonesia is reportedly looking to Mexico to supply live cattle
So far, the Indonesian government has refused to raise the price ceiling for beef, instead switching to other protein sources.
The government has reportedly increased India’s quota of frozen buffalo to import and, according to local media, began drafting a protocol for importing cattle from Mexico in late February.
Agustiar said it was unclear how many Mexican cattle the government would allow the government to send on its one-month trip to Indonesia.
“They have not established a policy, they are only trying to find other sources of live livestock from countries other than Australia,” he said.
But the CEO of the Board of Australian Animal Exporters Mark Harvey-Sutton said he had not received official word from the Indonesian government about the permits issued to Mexican cattle.
“We understand it has the potential to happen, and this is a situation that we are monitoring very closely, but from what I understand it is driven by high prices in Indonesia at the moment,” said Harvey-Sutton.
“Ultimately, these are market forces and we need to work hard to ensure this is communicated. And we respect and respect the partnership we have with Indonesia.”
Harvey-Sutton said exporters were still receiving orders from Indonesia, despite the difficult conditions.
“From what the exporter told me, the order was still coming in because in the end there was still demand.
“Yes, it is a challenging market but the need is still there and as far as our members are concerned, it is business as usual.”