Indonesia takes axe to exports

Shock at cattle cut

AUSTRALIA’S live cattle export industry is in shock after Indonesia slashed its live imports to 50,000 head for this quarter – well below the 250,000 permits expected.

Australian Livestock Exporters Council CEO Alison Penfold said she was surprised and disappointed by the decision, but did not believe it had been made for political reasons.

Other industry figures had mixed reactions about the effect it would have on Queensland’s soaring cattle prices.

Townsville livestock agent Tim McHugh said Australia’s domestic market was so strong that he doubted the Indonesian decision would have any real impact.

“The fat market is on the rise domestically in the south and it will come north as the days go on.

“The industry needs to be confident because the supply and demand situation is in its favour.”

Kevin Currie of Ray White Rural Townsville said the scarcity of cattle would ensure prices stayed high.

“It’s very hard to source cat- tle for that feeder order at the moment and there are plenty of graziers in southern Queensland, northern New South Wales and the Northern Territory who are looking to buy the sort of cattle that Indonesia imports so I think that’ll soak up the surplus initially.

“In any case, I think Indonesia will have to increase its orders some time before the end of this quarter.”

Indonesian- based commodities expert Michael Sheehy, the chief operating officer of PT Natural Resources Indo- nesia, said the reduced quota was due partly to commercial considerations.

“Cattle prices in Australia are very high. The reduction in quota should have an impact on these prices and this will be watched closely from Indonesia.”

A live export company source said the Indonesian decision would have some impact on beef prices.

“It’s got to have a downward pressure because, all of a sudden, there’s 200,000 head of cattle we used to have a market for that we now don’t. And Indonesia is Australia’s main live export market.”

Indonesia primarily imports feeder steers up to 350kg which are fattened at feedlots before going to market.

Rabobank senior analyst Angus Gidley- Baird said farmers in the Northern Territory would be hit hardest by the decision.

“The northern part of Australia is more heavily geared towards live export, and particularly the Northern Territory,” Mr Gidley- Baird told Sky Business.

“Queensland has a few more options with more processing clients.”