Changes ahoy for Indo live export permits

05 Jan, 2016 12:35 PM
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I will continue to work with officials in Indonesia to try to improve the timeliness of the process

CHANGES to import arrangements will see up to 200,000 head of cattle exported from Australia to Indonesia in the first four months of 2016 and potentially 600,000 for the full year.

Agriculture and Water Resources Minister Barnaby Joyce welcomed the announcement.

He said Indonesia’s right to make decisions with regards to their imports was respected by the Australian government but “a periodic quota system makes for an uncertain trading environment”.

“For some time we have said that the certainty of an annual quota would benefit not only Australian producers, but also consumers and processors in Indonesia,” he said.

Federal Trade Minister Andrew Robb and Mr Joyce both visited Jakarta late last year to lobby the Indonesian government to change from the traditional quarterly permit system to annual announcements.

Industry also supported that move to increase market and industry stability and for stabilising Indonesian beef prices but all parties must now be content with cattle quotas being announced every four months.

Australian Live Exporters Council CEO Alison Penfold said the permits would be issued on a trimester basis rather than on a quarterly basis and the process of issuing permits had now commenced.

Ms Penfold said letters of recommendation had been issued to cattle importers by the Indonesian Ministry of Agriculture.

She said importers took the letters of recommendation to the Ministry of Trade which issued permits against the letters which also contained the number of cattle assigned to the importer.

The importers then provide the permits to exporters so that they can apply to the Australian Federal Department of Agriculture and Water for approval to export, she said.

“Nothing official has been provided in terms of the annual number or number for the first trimester,” she said.

Ms Penfold also told ABC Radio that the move to trimester arrangements was “certainly progress”.

"Ultimately what we have been pushing for is for the annual numbers to be announced several months before the start of the permit year,” she said.

"That gives us an opportunity to plan the logistics around the export year to Indonesia.

“I will continue to work with officials in Indonesia to try to improve the timeliness of the process - again as we have argued previously, this timing forces the market into a spot buying process, which is not necessarily best for all participants along the supply chain.”

During his visit to Jakarta in October last year to meet with ministry officials, Mr Joyce said he argued the case for moving away from the quarterly quota system to annual announcements, to help stabilise domestic beef prices in Indonesia.

He said the best way to achieve lower beef prices which Indonesian officials also wanted was to have longer quotas “so people can’t game the system”.

“If they can see a juncture, they can create a fear factor and say ‘there may not be any more meat after that quota’ and, therefore, the price goes up,” he said.

“But the prices don’t go up because of supply - they go up because of fear.

“Those people close to senior levels of government in Indonesia understand that very, very well and they’re vastly more inclined towards annual quotas, not just on beef but on anything.”

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