Dismay at Indonesia's modest import limit
Indonesia has issued its much anticipated cattle import quota for the second half of 2012 but has not increased the limit as many industry players had been hoping.
It is understood the quota for the period June to December is for about 98,000 head, which would fill the remaining total quota limit of 283,000 head for calendar year 2012.
Between January and May 2012, Australia exported 135,467 head of cattle to Indonesia.
Import permit volumes were slashed by Indonesia this year in the wake of the Federal Government's suspension of the live trade last year.
In 2009, Indonesia's cattle imports from Australia peaked at 750,000 head, followed by 520,000 head in 2010 and 413,000 head last year worth $275 million.
The move by Indonesia last week to release a six-month quota for only 98,000 head is a major blow to Australian cattle producers and exporters, who were hoping for an increase in permitted volumes for the second half of this year.
Wellard Group Holdings executive director Stephen Meerwald said its first shipment for the current quarter had been held up in Darwin last week waiting for the Indonesian Government to release its quota permits to local importers.
This ship finally left port on Sunday with about 8000 cattle on board, mostly from the Northern Territory.
Mr Meerwald said it was very difficult to predict exact quota volumes released by the Indonesian Government, but at 98,000 head that was half of what Australia had shipped to the country in the first quarter of 2012 alone.
"We will be seeking more clarity (on accurate quota levels) in the coming week," he said.
Some industry players have speculated that the Indonesian Government could bring forward quota for 2013 to cover shortfalls in permitted import volumes during the next six months.
But there has also been speculation that next year's quota could be as low as 200,000 head.
Mr Meerwald said given the second half 2012 quota covered a six-month period, as opposed to the traditional arrangements for quarterly permits, there could be shipping disruptions for the rest of the year.
He suggested some Indonesian importers - who had indicated strong demand for stock - might bring in high volumes of cattle during the next three months and thus create a slow down in activity during the final quarter of the year.
"I would think most of the 98,000 head quota will be shipped between now and September, when northern cattle are at the right weight," he said.
"But the Eid festival is in November and that traditionally creates a busy period through to the end of October."
Mr Meerwald said Indonesia had become a fill-in market for Wellard, which was traditionally the biggest single exporter into that market, mainly due to quota restrictions.
He said the company now had one ship working full time carrying dairy cattle into China, one ship servicing the Middle East full time and one ship on an Atlantic route.
Wellard has also been developing markets for beef breeding cattle in Russia and Kazakhstan, with most stock shipments to date sourced from eastern Australia.
Pastoralists and Graziers Association president Rob Gillam said Indonesia's latest quota release was very low at 98,000 and meant a lot of WA's northern cattle that were at Indonesian market specifications would not be able to get on boats this year.
He said some of this stock was likely to come south, but a lot was likely to be carried over to take them through to heavier weights for Middle Eastern markets next year.
Mr Gillam said Australian beef producers had hoped Indonesia was getting short of cattle and the government there would act to extend this year's quota, but that had not happened.
"They are sticking to their position and so obviously believe Australia needs another little dose of hardship before they will forgive what happened 12 months ago," he said.
"This is totally in the hands of the Indonesian Government.
"If Indonesia does make more quota available during the next six months, there will be stock available in Australia - but that seems unlikely to happen."
Mr Gillam said a couple of vessels in Darwin were now in pre-embarkation mode with cattle ready to go but were forced to wait for permits to be issued to Indonesian importers.
He said exporters would be hoping these permits would be released quickly because their costs would be mounting.
Mr Gillam said it was a concern that Indonesia had been recently been looking at Brazilian cattle for import and there was some fear the country would source cattle from India, which had a foot and mouth disease epidemic.
"We don't want any possibility of that coming into Indonesia," he said.
Mr Gillam said Indonesia had also cut back chilled carcase and frozen meat purchases from Australia and it was concerning as to where the country would secure its future meat supplies.
In Indonesia, locals have been protesting about Australian beef import restrictions that have increased the price of beef in that country.
ABC Radio Australia reported last month that thousands of Indonesians had protested outside the Indonesian Ministry of Agriculture offices in Jakarta to draw attention to the impact of beef quota restrictions.
Beef prices in the country are understood to have risen by almost $US2/kg to more than $US8/kg in recent months.
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