Cattle export cutback by Indonesia ‘could backfire’

Exporters are warning that Indonesia’s decision to slash live cattle imports by 80 per cent this quarter could backfire.

Frontier International Agri Operations ManagerÑSouth East Asia, Ashley James (blue shirt), and Manger of Noonamah Yards, Darryl Yesberg (red shirt), pictured at Noonamah Yards outside Darwin with cattle waiting to be exported to Indonesia.

Exporters are warning that Indonesia’s decision to slash live cattle imports by 80 per cent this quarter could backfire and lead to problems fulfilling the reduced quota.

The industry was yesterday still reeling from news that Indonesia would cut import permits for Australian animals from 250,000 last quarter to just 50,000 for the three months to September.

Top End producers had only just finished a record year, with more than 600,000 head exported through Darwin Port in 2014-15 — a 51 per cent increase on the previous year.

The manager of Noonamah Yards, which supplies the port, said the sudden slowdown in the Indonesian trade would be hard to manage. “We’ve gone from one of our busiest six months in history to next to nothing,” he said.

Ashley James, operations manager for Southeast Asia for Frontier International Agri, a live cattle exporter, said many Indonesian importers had been issued permits for just a few hundred animals, which he said would be hard to manage.

“Our business is based around shipping and you can’t send a ship with just 500 cattle on it … it’s not economic for one vessel to go to several ports,” he said. “If we can find other markets then maybe Indonesia won’t even get its 50,000.”

Tracey Hayes, chief executive of the Northern Territory Cattlemen’s Association, agreed that there was a risk Indonesia’s supply chain could be disrupted.

“The more instability there is in a marketplace, the more it opens up opportunities for other competing markets to come in,” she said.

“We would like to see stability in the Indonesian marketplace to ensure long-term relationships.”

Industry observers have been predicting for some time that the growth of markets in other Asian countries would soon free Australian producers from dependency on the trade with Indonesia.

There has recently been renewed focus on developing markets in China, Malaysia, Vietnam and Cambodia and Thailand.

The immediate problem is that many of those markets take ­heavier slaughter cattle, whereas Indonesian buyers mainly want cattle under 350kg to be finished on local feedlots.

“We’ve got product ready for market but the market is not ready for the product,” Ms Hayes said.