This article is from a special feature on Indonesian live export.
DESPITE an aim to be self sustainable, the Indonesian beef market is still developing and could grow to a point where Australia won’t be able to meet demand.
That was the view of PT Juang Jaya Abdi Alam (JJAA) feedlot managing director Greg Pankhurst, who said the issues of the last 18 months had been a challenge but believed the Indonesian market had the potential to expand with Indonesians looking to eat more beef.
“The import quota is a challenge but at the end of the day you only have to look at the figures,” Mr Pankhurst said.
“There are 260 million people in Indonesia and they all eat about 2kg of beef per person per year.
“They only need to eat another 200g per person per year and that equates to about 200,000 cattle.”
Mr Pankhurst said the wealth of Indonesians was on the increase and locals would begin to look to eat more “luxury type” products such as beef.
“So the demand is going to be there in three or four years and we will probably see those import quotas change a bit,” he said.
“I don’t see them changing a lot in the next two years; demand has to change significantly in order for them to be changed.”
JJAA has two feedlots, one in Lampung and the other in Medan. Both are joint ventures with Consolidated Pastoral Company (CPC).
Mr Pankhurst, who is from Australia, said they imported all their cattle from Australia and it needed to become more “in-tune” with the northern neighbours.
“Indonesia has a massive population and massive potential to grow,” he said.
“I think Australia needs to become more in-tune with Indonesia and what they are wanting to do.
“They (Indonesia) are never going to be totally self-sufficient, they have admitted that themselves, and Australia needs to work out what it can do to help Indonesia with their breeding issues because they just need some help.
“Indonesia won’t be able to do it themselves and they are going to continue to need stock from outside of the country and Australia is the best place to get them from.”
Mr Pankhurst said Indonesia would never stop completely importing beef and predicted the import quota for 2013 to be between 220-250,000 head of cattle for the year. But in 2014, it would be hard to know what would happen.
“2014 is an election year and anything could happen,” he said.
“But I do believe the quota system will stay in place for at least another two years.”
He said the Indonesian Government’s decision to introduce a new 5 per cent tariff on live cattle imports was going to be tough on all parts of the industry.
He said industry groups were currently working with the Indonesian Government to see if there could be a change.
“There is certainly a lot of work being put into it and it is a very big hit to the system as well,” he said.
“Especially to somebody like us who has imported a lot of cattle because we are going to have to back-pay it to January, so we are obviously quite keen to sort it out.”
The tariff could put more pressure on breeding cattle in Indonesia, something which Mr Pankhurst is already working towards.
He has about 5000 head for cattle breeding.
“They are there pretty much to try and help with the self sufficiency,” he said.
“So we have got breeders from Australia which we are using for breeding here and then we are growing out the calves.
“We have got a lot of local cattle at the site and throughout the feedlots in Indonesia.”