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Govt to increase import quota for prime cuts of beef

The government plans to increase the import quota specifically for so-called “prime cuts” of beef as it seeks to lower beef prices that have recently increased sharply due to short supply

Satria Sambijantoro (The Jakarta Post)
Jakarta
Thu, April 18, 2013

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Govt to increase import quota for prime cuts of beef

T

he government plans to increase the import quota specifically for so-called '€œprime cuts'€ of beef as it seeks to lower beef prices that have recently increased sharply due to short supply.

Coordinating Economic Minister Hatta Rajasa said in Jakarta on Wednesday that the increase in the import quota would be needed to bring the price of beef back to Rp 76,000 (US$7.82) from around Rp 91,000 at present.

'€œWe need to increase the import quota of good quality beef such as the prime cuts that are consumed by specific market segments,'€ he told a press briefing held in his Jakarta office on Wednesday following a meeting with top officials from the Finance Ministry, the Trade Ministry, the Agriculture Ministry and the Central Statistics Agency (BPS).

The meeting focused on how to reduce the rise in meat prices that has contributed to the surge in inflation to 5.9 percent in March, far exceeding the government'€™s target of 4.9 percent as stipulated in the 2013 State Budget.

 '€œOur target is to push down beef prices to last year'€™s price of around Rp 76,000,'€ said the minister.

The prime cuts, the highest quality joints of beef and sold at a premium, are normally purchased by upper-income consumers for use in steak-related dishes.

Due to the lack of the supply of prime cuts, many people in the middle class market segment have turned to regular beef to meet their needs. This has resulted in a knock-on increase in the demand for regular beef, which in turn has caused a sharp increase in prices.

Trade Minister Gita Wirjawan shared the same view, saying that the government needed to import prime cuts of beef because currently local producers were still unable to produce enough beef of the same quality as the overseas-reared beef.

'€œBut we need to supervise the distribution process to ensure that the prime cuts of beef are not sold in the traditional markets,'€ Gita said.

The government has currently set the annual beef import quota at 80,000 tons, which comprises 32,000 tons of frozen beef, with the rest coming from imported live cattle.

As of April 5, the realization of imports for frozen beef stood at 8,358 tons, according to data from the Agriculture Ministry.

Neither Gita nor Agriculture Minister Suswono, who also attended the meeting, revealed the percentage of prime beef cuts as compared to the total imported beef quota.

The additional quota for prime cuts of beef would be '€œflexible'€ depending on the needs of local beef sellers, according to Suswono.

The agriculture minister stressed that, to reduce beef prices, it was important not only to maintain an adequate supply, but also to cooperate with other relevant ministries to solve distribution bottlenecks, which had also contributed to the soaring beef prices.

'€œFor instance, if the beef supply is sufficient but we cannot ensure proper distribution to Jakarta, then the beef prices will remain high,'€ Suswono said.

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