Indonesia rejects industry plea for more beef imports

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Indonesia has rejected a request for an increase in beef import quotas, an industry group said Friday, urging the government to reconsider its beef sustainability push after prices in many parts of the country nearly doubled this week.

Indonesia slashed 2012 cattle and beef import quotas by as much as 62 per cent to stimulate domestic beef production and help reach an ambitious 2014 self-sufficiency target.

Domestic beef prices have spiked in parts of Java province as retailers struggle to find supplies after the government drive to boost self-sustainability by cutting imports backfired, a trade ministry official said this week.

The move has caused turmoil in domestic beef prices, said Sarman Simanjorang, chairman of trade body the Jakarta Beef Committee.

"That’s why we have to evaluate the policy," he added on the sidelines of a beef industry panel in the Indonesian capital. "We proposed that the government add 30,000 tonnes of beef import quotas, they refused it."

Beef prices in many parts of Java have climbed from 65,000-70,000 rupiah (US$6.75-$7.27) per kilogram to as much as 105,000 rupiah (US$10.91) per kg in recent weeks, deputy trade minister Bayu Krisnamurthi said Monday.

"The agriculture ministry argued that Indonesia has a beef surplus of 20,000 tonnes, which business people do not believe," added Simanjorang, whose group has more than 4,000 members, among them beef or cattle producers, importers, processing industries and retailers in the capital.

Other areas also hit by the shortage, said to be caused by cattle supply problems from East Java, West Java, Central Java, Lampung and Jakarta, include Bogor, Depok, Tangerang and Bekasi.

Beef producing provinces were refusing to send cattle to be slaughtered in Jakarta, so to ensure supplies for themselves, Simanjorang added.

Growing affluence

Indonesia consumed about 430,000 tonnes of beef in 2011 and this is estimated to rise by about 13 per cent this year, as the growing affluence of its population of 240 million boosts consumption.

Beef consumption next year is likely to rise to 550,000 tonnes, said Joni Liano, executive director of the Indonesian Feedlot Association (Apfindo), while domestic supplies are seen at only 432,000 tonnes.

The archipelago’s beef and cattle imports come mostly from Australia, New Zealand and Canada.

In an effort to combat rising food prices earlier this year, Indonesia said it planned to expand the job of national rice procurement agency Bulog, to include other food items, including beef.

Southeast Asia’s largest economy issued import quotas for 90,000 tonnes of beef and 600,000 live cattle in 2011.

– Reporting for Reuters by Yayat Supriatna, writing by Michael Taylor.