Aussie boxed beef to Indonesia up 140 per cent on the back of increased demand

Indonesian demand for beef has dramatically boosted uptake in Australian boxed beef by 140 per cent compared with results from early last year.

Meat and Livestock Australia business analyst Tim Jackson said while Australian live cattle exports to Indonesia were down 43 per cent year-on-year from the first two months of 2022, “boxed exports are up 140 per cent year-on-year over the same period”.

The increased demand was due to the Indonesian Government trying to stabilise beef prices during the peak demand time of Ramadan, which started March 23 and ends this week, because last year prices spiked to about $20 per kilogram due to a lack of available supply.

Mr Jackson said the boxed beef trade to Indonesia is a competitive market with Australia making up just 34 per cent of all imports.

“What the figures seem to be implying right now is that the price of Australian live cattle is encouraging buyers to shift to boxed meat,” Mr Jackson said.

“Ultimately, cattle supply is still limited in the top end and we could expect to see a shift as supply comes back up over the next few years.”

Australia provides Indonesia with 30 per cent of its total beef consumption, an industry worth $1.1 billion last year.

About 50 per cent of the trade was made up from live export and 32 per cent from boxed beef, totalling 39,171 tonnes per shipped weight.

Eighty nine per cent of the boxed beef sent to Indonesia was frozen grass feed beef, totalling $355.8m.

Mr Jackson said Brazil exported about 44,000 tonnes of boxed beef to Indonesia last year, but that will be more than doubled to 100,000 tonnes as Indonesia boosts its imports to meet consumer demand.

The Indonesian state-owned company ID Food was responsible for the increase to 100,000 tonnes shipped weight in order for the Indonesian Government, to maintain the price of beef and keep it affordable for consumers.

In March last year, the price of beef in Indonesia reached a high of 200,000 rupiah or about $20 per kilogram.

Usually the price sits around 100,000 — 130,000 rupiah per kg ($10-$13/kg).

MLA’s 2022 Market Snapshot said that Brazil has expanded beef exports to Indonesia after regaining access to the market in August 2019.

“Since 2020, Brazil has not filled its market allocation of 20,000 tonnes swt due to high demand from other more profitable markets,” the report said.

“However, in 2021–22, volumes from Brazil increased over 300 per cent to 17,438 tonnes swt and are expected to maintain momentum, with more processing plants expecting to gain approval.”

Despite Brazil’s attempts to boost supply, Australian Livestock Exporters’ Council chief executive Mark Harvey-Sutton said Indian buffalo meat was still Australia’s greatest competitor in the Indonesian market.

Indian buffalo meat exports to Indonesia make up about 56 per cent of the country’s demand.

Similar to 2021, in 2022 the Indonesian government allocated 100,000 tonnes for Indian buffalo meat imports, of which about 80 per cent was filled in the first seven months of 2022, MLA’s report said.

“Imports are anticipated to continue to be strong, driven by the pressure of high prices for Australian cattle, high global beef prices and India’s growing export capacity.”