Lotfeeder doubts self sufficiency push

09 Aug, 2012 04:00 AM
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This article is from a special feature on Indonesian live export.

LIKE Australia, the Indonesian cattle industry also suffered during the chaos of last year’s live cattle export ban.

Indonesian cattle company, PT Santosa Agrindo’s head of procurement Charlie Mok said the ban was a difficult time for his company and Indonesia but the pain was still being felt largely due to the decrease in the live cattle import quota.

Mr Mok said the live export ban was something which he and his countrymen did not expect.

“Meat and Livestock Australia (MLA) was here and had already put some (mark restraining) boxes here and at the time we thought that was enough for animal welfare,” Mr Mok said.

“But we didn’t know the standard of animal welfare for the Mark 1 box, nobody knew.

“That’s what shocked us at the time.” He said it was hard for an industry to come up to a standard when you are not told what standards to reach.

Mr Mok said having the country’s major cattle supplier banned and not knowing how long the ban would last for was very difficult for the industry.

“For us, with our feedlot, we faced a million dollar loss and we didn’t know how long the ban was going to last in that time,” he said.

“Everybody was a bit confused.”

Mr Mok said the Indonesian people were hoping the live export ban would not continue for as long as the live sheep export ban to Egypt.

That ban carried on for nearly seven months in 2006.

“It was very confusing for us (Indonesia) because we didn’t know if we were going to be banned for a year or longer,” he said.

“But in the end once the ban was lifted and the cattle came back in full, we had cattle arrive on August 17 in Penjang.

“I remember it because that is Indonesian Independence Day.”

Earlier this year the Indonesian Government announced the live cattle import quota would be cut to 283,000 head of cattle in 2012, down from 410,000 last year.

There are mixed industry views over whether the announcement was due to their push towards self sufficiency by 2014 or a direct response to the live cattle export ban in July last year.

Mr Mok said Indonesia wouldn’t be self sufficient in 18 months time.

“There is 14 million head of cattle (in Indonesia) at the moment and what we see in the market is that we are still short in supply,” he said.

“I don’t think we will be self sufficient by 2014.

“We need more time.”

Mr Mok said as an industry, and as a country, Indonesia hoped it would one day be self sufficient. But he said one day the country of more than 242 million people, 11 times the population of Australia, would become self sufficient but not in the timeframe set by the Indonesian Government.

He said the Indonesian Government’s decision to lower the import quota had also been hard on the Indonesian people, forcing beef prices up and impacting on lotfeeders’ ability to work at capacity.

Mr Mok said despite 98,000 head of cattle being issued for the remainder of the year there was still a lot of confusion about how they would handle the lack of live cattle imports.

He said it was a race between importers to acquire the permits as quickly as possible. He said the Indonesian Government’s more recent decision to add a 5 per cent tariff on live cattle imports was just another problem for lotfeeders.

“On the one side we have to lower the capacity of our operation (due to the import quota) and we still get a five per cent tax,” he said.

“It is very difficult for lotfeeders at the moment. It is also very difficult for the industry at the moment, for the importer, for the exporter, for the farmer.”

When asked whether the import permits would be raised later in the year, he said he didn’t know.

“It may, if there is a problem on the supply side for the government and maybe come October but nobody knows at the moment,” he said.

“It depends on the supply for the market.”

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