Monday, May 27, 2013

More Live Cattle or More Boxed Beef for Indonesia - Confusion??

The more things change, the more they remain the same in the ongoing beef availability saga in Indonesia.

While some speak about a 35% gap between supply and demand [ as reported in the Jakarta Post over the weekend] many official positions are saying is is much less, maybe 10%.

However you adjust the data to suit the needs of various players, the nitty gtitty is that beef prices are up a massive 50- 60% over the past year, pretty well since live cattle imports from Australia were heavily restricted by Indonesian authorities from 2012.

There have been media leaks that there will be an increase in live cattle imports, but the reality is that this cannot allow adequate time for the animals to grow to a respectable market size and weight in the period up to Idul Fitri the post Ramadan holiday period - even if they were shipped now.  Shipping will not happen that quickly, even thouh adequate supply is believed to be available.  It takes time to organise the logistics of the exercise.
cattle loading on the wharf

More likely is that extra boxed beef import licences will be issued.  Maybe with live cattle to come as well.  But the boxed beef will allow quick supply if available from either Australia, or elsewhere.

Indonesians buyers might find this a bit tough as well, given the major increases seen in boxed beef supply to China over the past 5 months from Australia. 

Indonesia - do not expect cheap beef as an easy way out of the suppy and cost dilema that is emerging rapidly in the country.

As far as is known, there are no decisions YET.  There is in-fighting between Trade and Agriculture ministeries in Indonesia over the issue, and hopefully a face saving solution will appear soon.

As a suggestion - check out the Jakarta Post online, in English.  It is possible the news may be there first! - is the web site.

A decsion has to happen soon or there might be a lot more rabble rousing in Jakarta, especially, over beef prices.  It has happened already in 2012 and 2013.

1 comment:

Inna Deineko said...

Thank you, great article. Almost the same situation in Russia And Ukraine

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