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Indonesia Relaxes Beef Import Restrictions, but Market Remains Challenging

Published: Jan 26, 2016



Indonesia was once a top 10 volume market for U.S. beef exports, but access to Indonesia has been inconsistent in recent years due to government efforts to bolster its level of self-sufficiency in beef production. Joel Haggard, U.S. Meat Export Federation (USMEF) senior vice president for the Asia Pacific, reports that Indonesia’s import regulations have been relaxed to some degree for 2016, which could increase business opportunities for U.S. exporters. He cautions, however, that the market remains very challenging, as importers still must purchase a certain volume of domestic beef before being granted import permits. Indonesia also remains closed to high-demand variety meat items such as beef hearts and livers. Haggard notes that the United States and New Zealand have challenged Indonesia’s import restrictions before the World Trade Organization (WTO), but no decision has yet been issued.

TRANSCRIPT:

Joe Schuele: Indonesia was once a top 10 market for U.S. beef exports, but access to Indonesia has been inconsistent in recent years, as the government tried to bolster its level of self-sufficiency and beef production. Joel Haggard, U.S. Meat Export Federation senior vice president for the Asia Pacific, was in Jakarta last week to examine changes in import policies that could make the market more promising this year. He has more details in this USMEF report.

Joel Haggard: Following publicity last year about a government-wide effort to streamline red tape and regulations, the Indonesian minister of agriculture published these new import regulations that made more cuts eligible for importation and allowed importers to apply to import as much beef as they want. With more cuts eligible from the U.S., including export staples such as short plates and short ribs, we predict we will higher U.S. volumes this year. The U.S. probably has the best opportunity in years to supply Indonesia because Australia’s live cattle export supply will be constrained by where that country is at in terms of its own cattle cycle and the consequent high beef import prices from Australia.

Joe Schuele: Despite these positive developments, Haggard cautions that the Indonesian market remains very challenging.

Joel Haggard: For example, if you want to import beef you now must purchase a certain quantity of domestic beef and show receipts before you can apply for an import license. So that’s quite restrictive and it lengthens planning time for imports, obviously. We’re also disheartened to see continued non-access for high-demand items such as beef hearts and livers. These and other restrictions are really the reason why the U.S., and joined by New Zealand, filed a trade complaint to the WTO over Indonesia’s beef import regime. We’re very interested in the outcome of the WTO case, but in the meantime we’re focused on capturing what volumes and share we can by working with importers and their restaurant and retail customers to feature more U.S. beef.

Joe Schuele: For more on this and other trade issues, please visit USMEF.org. For the U.S. Meat Export Federation, I’m Joe Schuele.