Beef price remains high in Indonesia, despite influx of Indian buffalo meat for Ramadan

By Matt Brann on 31 May 2017, on 

Indonesian consumers are once again forking out high prices to enjoy beef during the Islamic holy month of Ramadan, despite the influx of cheap buffalo meat from India.

According to Indonesian media, the State Logistics Agency (Bulog) is importing an extra 5,000 tonnes of frozen Indian buffalo meat this week to try to satisfy demands during Ramadan and Lebaran.

The Indonesian government has been allowing the importation of Indian buffalo meat for nearly 10 months, but it appears to be having little effect on the beef price, which in Greater Jakarta is still a very high Rp114,000 ($11.50) a kilogram.

The trade began last year in an effort by government to reduce beef prices, but it would seem the policy is not going to plan, with consumers no better off, and presumably the margins being soaked up by others within the supply chain.

Lead up to Ramadan not as busy for Australian cattle exporters

The Indian buffalo trade might not be affecting the price for consumers, but it does appear to be affecting demand for Australian live cattle exports.

Northern Territory Cattlemen’s Association chief executive Tracey Hayes, said the months leading up to Ramadan had traditionally been a busy time for live cattle exports, however demand from Indonesia this year was noticeably down.

“Things are a little bit different this year,” Ms Hayes said.

“I think part of it is driven by the high price [of Australian cattle], but also part of the challenge for us in Indonesia is we now have a strong competitor in Indian buffalo meat.

“The provision of protein into that Indonesian market, traditionally was 100 per cent provision by Australia, but through Indian buffalo meat and some beef from Spain, we now have a competitor in that market and we’re starting to notice that through the supply chain.”

Ms Hayes said it was too early to tell what impact the competition from buffalo meat would have on overall export numbers from Australia this year.

Indonesian feedlots lose money

According to one live export source in Jakarta, the combination of high Australian cattle prices and increasing supply of Indian buffalo meat, had created the perfect storm for Indonesian feedlots.

“Business has not been good for feedlotters this season,” he told ABC Rural.

“To keep our market we had to sell at a lower price, which does not make up with the buying price, so we are losing money.”

The cattle industry in northern Australia is anticipating a price correction in the coming months, but when it will happen and by how much is anyone’s guess.

Feeder steers to Indonesia out of Darwin are currently fetching around $3.30 a kilogram.

Is India really going to ban the sale of cattle and buffalo for slaughter?

In a move which has shocked the global red meat trade, the Indian government has announced a nation-wide ban on the sale of cattle and buffalo for slaughter.

It is a decision that is destined to end up in the courts, with the Indian meat sector aghast that the government would be willing to kill off the nation’s $4 billion beef export industry.

The decision has sparked widespread protests and claims that millions of jobs will be lost if the government does not back down.

The Times of India reports there are various state governments opposed to the decree and that West Bengal’s chief minister Mamata Banerjee, has declared her government will not accept the ruling.

“She called the ban imposed by the Modi government ‘undemocratic and unconstitutional’, and said it would be challenged legally,” The Times reported.

Given the impact Indian buffalo meat has had on the Indonesian market, it is a story which the Australian live cattle sector will be watching closely.

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