20 December 2011

3 minute read

Earlier this year, undercover footage of Indonesian slaughter houses caused a public outcry. The government suspended live exports at the end of May, and in early June suspended all live exports after pressure was applied from the public and animal welfare groups.

Although live cattle exports resumed to Indonesia in July 2011, the first shipment didn't leave until 11 August 2011. Between then and September 2011, 156,715 cattle were exported to Indonesia. This is a 30 per cent drop in cattle numbers, compared to the same period last year.

This drop in exports is entirely due to the ban, and a low uptake in the first month of trade resumption. The ban was also imposed on the industry during peak time for live cattle exports, following the northern wet season (March through to around September). However Mr McKinnon said that peak periods in the lead up to religious celebrations such as Ramadan also drive demand.

Following on from this, an number of reviews have been carried out. Mark 1 boxes were banned, as they did not comply with OIE regulations and cattle are now only exported to Australian approved abattoirs. Mr McKinnon says that independent auditors will review and assess each supply chain and that the industry is facilitating the rapid uptake of stunning in Indonesia.

Estimating the cost to exporters of the ban, Mr McKinnon says that it is hard to calculate a cost. Exporters incurred major demurrage bills and the costs of feeding thousands of cattle that were stuck in depots and in transit to the depots.

The Indonesian market is an important one for the Australian cattle industry. Mr McKinnon said that 521,002 head of cattle, or 60 per cent of all Australian cattle were exported to Indonesia.

With this is mind it is understandable that last week's announcement by Indonesia has caused unrest and uncertainty in the Australian industry. The Indonesia Ministry of Agriculture agreed to pull back on Australia's 2012 import permits from 500,000 head a year to just 280,000 head.

This news has not been received well in Queensland, which supplies 20 per cent of live cattle exports to Indonesia.

AgForce Cattle president Grant Maudsley said the Indonesian decision will shake the confidence of Queensland graziers who are still hurting from the imposed ban on live cattle.

Indonesia will now revise their import permits based on the domestic price of beef in Indonesia. If domestic prices rise sharply there is capacity for their Trade ministry to adjust import permits to allow more cattle and beef to enter their market from countries like Australia.

If Indonesia follows through with these quota levels Australian cattle producers will need sell more of their livestock through saleyards and to abattoirs or find alternative markets.

Concluding, Mr McKinnon said: "The future of the live trade is bright. We have huge expanding economies and populations immediately to our North that prefer fresh meat as opposed to frozen or fresh and Australia is best placed to provide this service in the most humane and efficient way."

December 2011