Indonesia increases Q4 quota

It comes as Federal Agriculture and Water Resources Minister Barnaby Joyce prepares to embark on a visit to Jakarta next week with industry groups, to push claims for an annual permit system and stimulate greater trade certainty.

The push for an annual permit system was heightened after Indonesia reduced its third quarter quota to 50,000 head this year.

Local industry members had anticipated a 200,000 head quota in the third stanza but the reduced number subsequently had a negative influence over Indonesia’s domestic beef supply, sparking a spike in local prices.

Federal Trade Minister Andrew Robb visited Jakarta last week and was hopeful an annual system could be introduced after holding talks with Indonesia’s new Trade Minister, Thomas Lembong, and other ministerial officials.

“There’s certainly a view that we need far more stability,” Mr Robb said.

“Now that demand for live cattle is heading towards exceeding the supply it’s all the more important for both Indonesia and for ourselves that there is some certainty attached to the number of cattle that are likely to be required in any one year.

“I think we’re going to get there on this issue.”

Reports say Mr Lembong has this week acted on a recommendation from Indonesia’s Agriculture Ministry, in increasing the fourth quarter permit allowance to 200,000 head of Australian cattle.

Australian Livestock Exporters' Council CEO Alison Penfold said her group welcomed the delivery of 200,000 permits for quarter four and were now “eager to get on with the job”.

Ms Penfold said she would also be visiting Indonesia next week with the minister as will Northern Territory Cattlemen's Association CEO Tracey Hayes.

Ms Hayes told ABC Radio there were plenty of cattle on the floodplains near Darwin “ready to go” to Indonesia.

“We’re very happy with the announcement – 200,000 for quarter four – it’s good news,” she said.

“Exporters have been busily preparing in anticipation of this announcement so I think we’ll start to see trucks rolling very quickly and cattle on the move within the next couple of days.

“We anticipate there will be ships ready to depart within the next week and get the orders flowing.

“Prices are very strong at the moment and it is a very tough gig if you’re an exporter trying to source animals at a reasonable rate.”

Ms Hayes said a record $3 price mark had been registered and exceeded for live cattle out of Darwin which could go higher.

“If you’re a cattle producer at the moment and you have some animals in the paddock ready to go, you’re well placed,” she said.

But Ms Hayes said it may be a challenge to find 200,000 head of feeder cattle in Northern Australia for export to Indonesia in coming months.

She said information coming through from NTCA membership at the moment was that 100,000 head would be “easily achievable” and difficult to source cattle from the region after that “but time will tell”.

Ms Hayes said NTCA was continuing to encourage authorities to look at moving to an annual permit system to help provide greater market certainty and stability and potentially stabilise wet market prices, in Indonesia.

She said she was heading to Jakarta next Tuesday and would be continuing talks there on the new quota system.

Last week, Minister Lembong echoed Minister Robb’s comment that there was a “tremendous medium and long term opportunity for greater collaboration”.

“We’re geographic neighbours,” he said.

“We have long standing and substantive historical relationships, so there’s no reason why we couldn’t join up in a spirit of partnership to tackle the challenges and opportunities.

“I think long term orientation is always wiser than very short term, instant gratification, I believe.”

WA Liberal Senator Dean Smith added to the calls for a long term approach to Indonesian cattle quotas.

He said with many northern producers “still reeling from the drastic cuts at the beginning of the third quarter” Mr Lembong’s decision on the 200,000 head was “most welcome”.

He said it may also “pave the way for a longer term approach to resolve the fluctuations in the current quota system”.

“The current quarterly system continues to be problematic not only for West Australian producers who are faced with an unsteady export supply chain, but for Indonesian consumers who have seen domestic beef prices fluctuate dramatically over the past three months,” he said.

“The economic and social interests of both Indonesia and Australia are best served by a longer term approach that provides certainty and prosperity for both parties, rather than one that provides short term instant gratification.”

Senator Smith has been working with the Indonesian Consul General in Perth to resolve the fluctuations in the current quota system and will travel to the Kimberley next week to meet with cattle producers.