Indonesia raises cattle imports as beef prices soar

An Indonesian butcher looks at his phone in the near-empty meat section of a traditional market in Jakarta on Aug 11, 2015.
An Indonesian butcher looks at his phone in the near-empty meat section of a traditional market in Jakarta on Aug 11, 2015.PHOTO: AFP

JAKARTA (AFP) - Indonesia will issue permits to import another 50,000 cattle, the government said, after beef prices soared and butchers went on strike following a decision to dramatically reduce shipments from Australia.

Chief Economics Minister Sofyan Djalil announced the increase late Monday, although he did not say over what period the cattle would be imported.

"I have given consent for the state logistics agency to import 50,000 live cattle," he told reporters, adding it was a "short-term" measure.

He did not say where they would come from, but much of Indonesia's beef is shipped from Australia.

Bill Byrne, agriculture minister of the Australian state of Queensland which is home to a large cattle industry, welcomed the move during a visit to Jakarta on Tuesday.

"Well of course I'm very pleased that we've got an additional quota of 50,000 heads," Byrne said, adding that he would like to have an annual quota system with the Indonesian government.

Jakarta announced last month that the quota for cattle imports from Australia from July to September would be set at 50,000, an 80 per cent reduction from the previous three months.

The move came as Indonesia seeks self-sufficiency in its beef supplies. But it shocked Australian cattle producers, as Indonesia is their biggest market for live exports, and sparked concerns that recent diplomatic tensions were affecting trade.

Following the decision, there was a sharp increase in the cost of beef in Indonesia, with prices as high as 130,000 rupiah (S$14) a kilogram in some areas. Reports said this was up from about 90,000 rupiah a kilogram previously.

The higher prices sparked public anger and prompted Indonesian butchers to begin a four-day strike at the weekend.

The decision to ask the logistics agency to import cattle marks a shift in normal procedure in Indonesia, as private importers are usually responsible.

Djalil said the government would also try to ensure high prices were not caused by hoarding.

Cattle trade has long been a sensitive issue between the neighbours.

In 2011 Australia temporarily banned shipments to Indonesia after a documentary revealed cruel treatment of cows in Indonesian abattoirs, angering Australian exporters and encouraging Jakarta to seek out supplies from elsewhere.

Relations are currently tense between the nations, after the execution in April of two Australian drug traffickers, and allegations that Australian officials paid the crew of a people-smuggling vessel to turn back to Indonesia.