Industry Profie: Beef Trade in Indonesia

MARKET INTELLIGENCE REPORT ON

BEEF TRADE IN INDONESIA

August 2009

Current Issues

The polemic over beef imports from Brazil has finally come to an end after the government gave its approval for the import of boneless beef from that South American country. The approval was given with a decision of the Agriculture Minister No 3.026 of 2009 signed by Animal Husbandry Director General Tjeppy D Soedjana. The plan to import beef from Brazil was already announced by Agriculture Minister Antons Apriyantonso upon his return from that country in 2008.

The plan was opposed by those on business interest but they cited foot and mouth disease as reason for their protest, saying only one state in Brazil is free from that disease without vaccination. Other 16 states were declared free from the disease only after vaccination and 9 other states were not yet free from the virus. They warned of the danger of the spread of the virus in the country threatening small livestock farms.

Tjeepy D Soejana, however, said imports from Brazil are allowed only for boneless beef after being separated form specific material carrying risk of spreading the foot and mouth disease.

Imported cow meat from Brazil will enter the country only via the Tanjung Priok port to make it easier for examination. Indonesia imports beef equivalent to 450,000-500,000 feed lot cows every year.

In order to smoothen beef imports from Brazil, the Government has proposed change in the notification to the World Trade Organization (WTO) about the regulation of the agriculture minister.

Earlier, based on the regulation of the agriculture minister No. 61/ 2007, countries exporting carcasses, meat and entrails of ruminants to Indonesia must be free from the mouth and hoof disease (PMK). Now the regulation has been revised and relaxed. Countries have been replaced with zones in a country.

Indonesia’s meat requirement

Director for breeding of ruminants at the agriculture ministry Fauzi Luthan said currently Indonesia still needs to import 28% of its beef requirement. Imports have been made mainly from Australia. The Government has set target that in 2010, the country will be self sufficient in beef. The prediction was made two years ago.

Fauzi Luthan indicates doubt about the target with low birth rate of breeder cows in the country. In Indonesia, the birth rate is around 15.8% with 3.1 million breeder cows. If the rate could be raised to 60%-70%, the country will soon achieve the self sufficiency target.

Currently, there are 18 provinces prepared for the expansion of beef cow farms including Aceh, North Sumatra, West Sumatra, South Sumatra, Lampung, West Java, Central Java, East Java, Bali, NTB, NTT, South Sulawesi, North Sulawesi, Central Sulawesi, South Kalimantan and West Kalimantan.

The country’s meat requirement has increased from year to year, although declining in 2005. In 2003, Indonesia’s meat consumption including chicken meat, and ruminant meat totaled 1.910 million tons, up to 2.020 million tons in 2004.

In 2005, the meat consumption decline following the outbreak of bird flu and reports of mad cows in the United States and mouth and hoof disease in India and Canada that prompted ban on meat imports from the those countries.

Consumption of meat rose again in 2006 and 2007 as the attacks of bird flu began to recede.

Java largest consumer of meat in Indonesia

Consumption of meat in Indonesia is dominated by Java accounting for 59.78% or 1,121,471 tons of the country’s total consumption in 2006 .

East Java led in meat consumption among the provinces with consumption totaling 357,905 tons in 2006, followed by West Java with consumption of 351,780 tons, Central Java 201,189 tons and Jakarta 188,181 tons

Cow population

East Java and Central Java have the largest cow population in Indonesia. In 2007, the East Java a cow population of 2,519,030 and Central Java had 1,357,125. The population growth rate is low from year to year.

Altogether the cow population in Indonesia continues to increase. In 2007, the population grew 7.2 % to 7,392,802 from 6,898,094 in 2006, and up again to 7,696,896 in 2008.

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