INDONESIA'S live cattle import quota for the next quarter is becoming an interesting topic for Western Australia's northern cattle industry and could shape the entire industry over the next six months.
In December, Indonesian Agriculture Minister Suswono made the announcement to cut Australia's cattle import quota to 283,000 head for 2012, down from 520,000 in 2011.
But issues remain for both Australia and Indonesia about what is going to happen to the quota over the second half of the year as just 98,000 head of cattle remain to fill the quota.
So far this year, Indonesia has announced a quota of 65,000 head of cattle in the first quarter and 120,000 in the second quarter.
But with Ramadan in Indonesia fast approaching (July 20-August 18), there is nervousness in Australia and Indonesia.
And it was reported last week that 2000 Indonesian importers protested outside the Indonesian government offices in Jakarta over the restriction on cattle imports from Australia.
The Indonesian government has continued to say the reduced cattle import quota was part of its long term strategy to become self-sufficient by 2014, but there is still scepticism about whether the Indonesian government made the decision as a direct response to the live cattle export ban to Indonesia enforced by federal Agriculture Minister Joe Ludwig in June last year.
There have also been reports of Indonesian beef prices rising from about $US1.96 a kilogram to $US8.37/kg in recent months.
WA Live Exporters Association (WALEA) chairman John Edwards said the quota was yet to be announced officially by the Indonesian government but he was interested to see what it would be.
The number of cattle exported by Australia could still exceed the 283,000 head limit as it did in 2010 when the live cattle import quota was set at 510,000 head but Australia exported 520,000 head of cattle.
"Their (Indonesia's) quarterly quota has not been released yet, but certainly with Ramadan just around the corner it would be a very big concern for the industry," Mr Edwards said.
"It has been a long-recognised issue that the lack of cattle quota is going to put severe pressure on availability, supply and most importantly price where it is a very price sensitive consumer market."
Wellard managing director Steve Meerwald was also concerned about the impositions on the trade but said the company had restructured its program to become less reliant on Indonesia.
"Nobody really knows what Indonesia is going to do," Mr Meerwald said.
"But we are moving more volumes into other markets where there is more certainty relative to what we can do over the next six months.
"Whatever Indonesia decides to issue is what we will endeavour to fill but depending on the numbers and when the permits are issued will depend on whether or not we can actually do it."
Australian Live Exporters Council (ALEC) chief executive Alison Penfold said while she was expecting a decent sized quota for the third quarter, it was ultimately a decision for the Indonesian government.
"I would expect they (Indonesia) would want to ensure they have sufficient supply and supply that effectively deals with any price pressures," she said.
"But we have been given no indication that the Indonesian government intend to revise the 238,000 head quota."
A renewed Egypt market has, however, taken some of the pressure off northern pastoralists, offering an alternative to Indonesia.
Any heavy steers which were not suitable for Indonesia have been absorbed by this market with Egypt taking cattle up to 550kg.
Landmark Broome livestock representative Andrew Stewart said it was also taking feeder cattle, in the 230kg-250kg range, which has given people a good opportunity, at good prices, to sell excess cattle.
"The only downside is they don't take females but it has still taken a lot of pressure off the pastoralists," he said.
While he added they were struggling to fill the Egyptian contracts, Mr Stewart said it would be interesting to see how this market performs.
"We had two Egyptian orders come within two or three weeks of each other so we are struggling to fill those boats," he said.
"But we are drawing cattle from the Territory right through to the west Kimberley and the Pilbara.
"Egypt offers a good alternative and adds more competition to the market.
"Hopefully it will portray to Indonesia that we are no longer 100 per cent reliant on it."
