Tight lot feeding margins and plenty of inventory in Australia's largest live cattle export market, Indonesia, looks set to dull the appetite for imports this quarter.
In-market experts say Indonesian importers can not accommodate the higher Australian cattle prices that scarcity of supply and rain-fueled domestic demand has fueled.
Live export steers from Darwin are trading at 360 cents a kilogram, which Rabobank's senior analyst animal protein covering South East Asia Ben Santoso says is a level which means Indonesian feedlotters are incurring losses.
In the latest cattle market Rabobank podcast, Mr Santoso said feedlots in Indonesia were also operating at capacity, with inventory until at least early May.
"My feeling is they will just run that down and then see if (Australian cattle) prices have moved," he said.
In the meantime, analysts have predicted a likelihood the Indonesian Government would import increased volumes of frozen beef from both India and Brazil, some of which would compete with locally fed Australian cattle.
Indonesia imported slightly below 94000t of Indian carabeef in 2019, up 14,000t from previous year.
Brazil's recent gaining of access to Indonesia also saw an initial 3500t sent in November, which Mr Santoso said had proven popular.
"We expect the volume of Brazilian imports to increase to 50,000t this year," he said.
"Brazilian beef is competing directly with fresh beef, and not with carabeef, given consumer preference and relative pricing.
"So it will have more audience going forward."
On the plus side, the just-ratified Indonesian-Australia trade agreement will offer some support via the elimination of the five percent tariff rate quota on live cattle.
"That reduction in the cost of importing feeder cattle from Australia is really needed now with cattle prices increasing," Mr Santoso said.
Last year, Australia exported just under 1.3m head of live cattle with around 70pc going to Indonesia and Vietnam, mostly as feeder and slaughter cattle. That was a 9pc increase on the previous year and was driven largely by drought turn-off in Australia.
The peak of arrivals of live Australian cattle to Indonesia is typically during April, which coincides with northern mustering.
Meat & Livestock Australia analyst Penny Graham said supply would likely remain tight and prices elevated until a picture of the northern supply developed once first-round musters had been completed.
The belief is numbers will be down this year - Ms Graham points out a lot of Territory cattle were sent to Queensland last year due to diminished feed and also demand from domestic feedlots - but just how significant drought losses have been is still an unknown.
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