the Indonesia-Australia Partnership on Food Security in the Red Meat and Cattle Sector has released the Joint State of the Industry Mid-Year Update July 2023 (available here). The Update provides a summary of the bilateral trade between Australia and Indonesia in live cattle and beef products to end-June 2023 and an outlook for the remainder of 2023 and 2024. It updates the annual 2022 State of the Industry Report, available here.

The Update highlights that cattle prices across Australian have tumbled as the El Nino weather pattern strengthens and producers look to offload stock. The lower prices have been welcomed by Australian and Indonesian feedlots after two years of record high cattle prices.

Soft consumer demand in Indonesia in the wake of the pandemic, in addition to increasing imports of low-cost Indian buffalo meat, have resulted in reduced export cattle numbers into Indonesia. First-half 2023 live cattle exports to Indonesia reached only 157,900 head – the lowest bilateral trade numbers for over a decade. Indonesian feedlots are expecting an uptick in imports in the second half of 2023, to reach an annual total of around 350,000 head.

Meanwhile, lumpy skin disease (LSD) virus was identified on Australian feeder cattle in Indonesia in late July. Testing of more than 1000 cattle across northern Australia confirmed that Australia remained LSD free, whereas LSD has been present in Indonesia for over a year. A temporary suspension of trade from several Australian export facilities was lifted in early September 2023 following a technical meeting between Indonesian and Australian governments at which a range of biosecurity measures were agreed to.

You may access the full Update at: https://www.redmeatcattlepartnership.org/publications

Fast facts:

• Hot, dry weather is predicted for Australia in the coming season, with the confirmation of El Nino. The dry weather is likely to end the focus on restocking in northern Australia and keep cattle prices down into 2024.
• Exports of Australian feeder cattle into Indonesia for the first half of 2023 were at their lowest number for over a decade, at 157,900 heads. Indonesian importers expect trade volumes of Australian feeder cattle into Indonesia to rise in the second half of 2023, with growing optimism associated with declining feeder cattle prices.
• With the global cost-of-living crisis worsening in 2023 some Indonesian consumers continue to switch to cheaper sources of protein, including chicken and Indian Buffalo Meat.
• While Australian beef and cattle products remain the preference for Indonesian importers, there is firming interest in establishing other supply chains, most notably with Brazil.
• The outlook for the bilateral trade is dependent on Australian feeder cattle and beef prices, with Indonesian importers anticipating improved trading conditions and profitability into 2024.

For more information, please kindly contact us at fibria.heliani@iapasg.org