Headlines

Consumers feel pinch as
beef prices go up

Australia’s six-month ban on cattle exports may be considered a blessing to local players, but the sudden cut in a supply chain that contributes a significant slice of the cattle market has been a pain for consumers and shaken the country’s food sufficiency program, a minister said.

“Domestic cattle producers can only supply 70 percent of the annual national demand. Normally we import the other 30 percent, which is equal to 550,000 live cows,” Agriculture Minister Suswono said in Jakarta on Thursday.

Last year, Indonesia imported 500,000 head of cattle from Australia and 120,000 tons of beef and offal from countries such as Australia, New Zealand, the United States and Canada. Indonesia’s beef and offal demand reached 400,000 tons in 2010.

As local farmers were unlikely to meet demand in the short term, Indonesia would have to import from other sources, namely New Zealand and the US, Suswono said.

“At the same time, we should improve conditions in the 12 slaughterhouses by collaborating with private companies so they will be equipped to international standards,” he added.

Suswono said Australia’s ban should be viewed as a lesson and be used as momentum to expedite measures to achieve the goal of
self-sufficiency.

Australian Agriculture Minister Joe Ludwig told the Australian media on Wednesday that the country would initially impose a six-month halt in live cattle exports to Indonesia, worth US$342 million, and review live export trade to all overseas markets, after a television broadcast depicting cattle being beaten, whipped and maimed prior to slaughter in several slaughterhouses created an uproar.

The impact on Indonesian consumers was felt immediately. State news agency Antara reported on Thursday that beef prices in a traditional market in Tangerang were up an average of 20 percent.

Indonesian Cattle and Buffalo Breeders Association chairman Teguh Boediyana the increases would not exceed 15 percent. He estimated the price of beef in cities would increase to Rp 25,000 (US$2.93) per kilogram, up from Rp 22,000 prior to the ban.

“This is the positive side of the ban. It will benefit the welfare of local [cattle] breeders,” he said.

Ali Gus, an animal science professor from Gajah Mada University, said the impact of the ban was immediate and that the price of beef in traditional markets in Yogyakarta had jumped from Rp 16,000 to Rp 19,000 per kilogram.

A breeder from Srigading Village, Bantul, Central Java testified to the ban’s “positive impacts”, saying that, a month and a half ago, he was offered Rp 7 million for his two cows.

“After the ban, the price has increased, as a buyer has offered Rp 8.5 million per cow, Rp 750,000 more,” he said. In many traditional markets such as in Bantul, the price of cattle has increased between Rp 300,000 and Rp 500,000.

However, the situation could worsen soon, as the fasting month of Ramadhan approaches. Ramadhan, which starts Aug. 1 this year, is notorious for the impact it has on inflation in the country.

“We will import if the situation becomes urgent,” Suswono said.

Trade Minister Mari Elka Pangestu tried to gloss over concerns on the ban’s impacts.

“For now, there’s no need to be worried about a beef shortage in the lead up to the fasting month and Idul Fitri. ... Concerns are unnecessary because the domestic stock will be more than enough,” Mari said.

“There’s no threat of price volatility. We have enough [cattle],” she added.

According to Mari, a plan to improve animal welfare at abattoirs was already in place, and the Australian ban would push the Agriculture Ministry to intensify its work on resolving the plan.

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