Audio: Policy Change Helps U.S. Beef Exports to Indonesia Rebound

Just a few years ago, Indonesia was a top 10 market for U.S. beef. At its 2011 peak, the United States exported nearly 18,000 metric tons of beef and beef variety meat to Indonesia, valued at more than $28 million.

But in an effort to bolster its domestic beef industry, Indonesia imposed tight quotas on beef and live cattle imports in 2012 and for much of last year. These restrictions applied not only to the United States, but to other beef suppliers as well. This led to tight beef supplies and skyrocketing beef prices in Indonesia, prompting a change in policy that allowed buyers to have much greater access to imported beef in the fourth quarter of 2013. This has continued into early 2014.

Joel Haggard, U.S. Meat Export Federation (USMEF) senior vice president for the Asia Pacific, provides more details on the situation in the attached audio report. He explains that while importers are pleased to have greater access to U.S. beef, they remain wary of Indonesia’s volatile political climate – especially with legislative elections approaching in April.

TRANSCRIPT:

Joe Schuele: In this U.S. Meat Export Federation Report, we look at beef exports to Indonesia, which just a few years ago was a top 10 market for U.S. beef. At its 2011 peak, Indonesia bought nearly 18,000 metric tons of U.S. beef valued at more than $28 million, but in an effort to bolster its own beef industry Indonesia placed tight restrictions on imports in 2012 and for much of last year, not only for the United States but also from its other major suppliers; Australia and New Zealand. This lead to tight supplies, very high beef prices, and a change in policy, Joel haggard USMEF senior vice president for the Asia pacific has more details.

Joel Haggard: Indonesia has been under a tight quota system for the last couple years. They have a political level commitment to try to attain self-sufficiency in beef production, but last fall they issued an interesting change to their regulations which basically abolishes the quota and allows importers to apply for beef in whatever quantities they can sell. Although this program is just getting off the ground, I think we saw a bump in trade the last quarter of the year and hopefully it will continue into this year.

Joe Schuele: While Haggard is pleased that U.S. exports to Indonesia are definitely on the upswing he explains that the political climate remains very fragile. Joel Haggard: The importers, because of the tight conditions over the last couple of years, are still weary of the sustainability of these new more liberalized regulations, and the elections resulting in a change in the working level people and these ministries that control imports. So that’s a concern, but we are trying to take advantage of the situation now because it’s much more liberal than it was a year ago.

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.