Executions row may hit cattle trade

A high-ranking Indonesian official has revealed plans to reduce reliance on Australian cattle imports amid diplomatic tension over the pending executions of drug smugglers Andrew Chan and Myuran Sukumaran.

Agriculture Ministry director-general Syukar Iwantoro said Jakarta was already looking to other countries to supply cattle in what some analysts interpreted as a challenge to Australia.

In a worrying sign for trade relations, Mr Iwantoro's comments in the Indonesian media were part of widespread negative coverage of Canberra's attempts to stop the execution of the Bali Nine ringleaders. The coverage highlighted big trade deficits with Australia and Brazil, another country lobbying to stop the execution of drug traffickers.

Perth-based Indonesia Institute president Ross Taylor said the comments were disappointing given the efforts to rebuild the live cattle trade in the wake of the then Labor Government's flawed decision to impose a snap ban on exports in 2011.

"It is a worrying development in this emotional climate," he said. "Notwithstanding what is going on at the moment, the model where we breed cattle and they feed cattle is a good one for both countries."

Mr Taylor, who was instrumental in growing cattle exports in his former role as WA's trade commissioner in Indonesia, said the industry had yet to reach its full potential.

On an official visit to WA last week, Indonesian ambassador Nadjib Riphat Kesoema said Jakarta was keen to pursue value-adding opportunities and cross investment in agriculture.

One business plan under discussion is the processing of Australian cattle in Indonesia for export to third-party countries.

Mr Kesoema indicated Indonesia would be willing to lift a ban on the re-export of meat from imported cattle. The product would be marketed in other countries as Australian beef with Indonesian halal certification.

The value-adding concept was formally discussed at a meeting between Mr Kesoema, WA's new Indonesian consul-general Ade Sarwono, Australia Indonesia Business Council chief Phil Turtle and Mr Taylor.

Producers in WA's north have been fetching record prices of $2.70/kg for cattle for live export to Indonesia.

Prices have come off slightly in the past week but industry leaders do not see any immediate threat to trade from the row over capital punishment.

WA cattle exports jumped 56 per cent to 305,000 head in 2013-14 with most going to Indonesia. In January, Jakarta announced a cap of 100,000 head on imports from Australia in the first quarter of 2015 - down from 160,000 head for a year earlier.

The State's agricultural exports to Indonesia reached $865 million in 2013-14, with wheat ($701 million) No. 1, followed by cattle, boxed beef and malt.