Promising Developments in Indonesia, but Uncertainty Remains


USMEF is in the process of examining regulatory changes for imported beef entering Indonesia in 2016. Once a top 10 volume market for U.S. beef, access to Indonesia has been inconsistent and highly volatile in recent years as the government attempted to bolster its level of self-sufficiency. Indonesia’s total imports from all suppliers were down by about 50 percent in 2015, totaling roughly 55,000 metric tons (mt). As we have previously reported, Indonesia’s restrictions on beef imports and other commodities are the subject of a WTO dispute settlement proceeding.

This year the market may hold increased promise as Indonesia has relaxed restrictions on popular cuts such as short plate and short ribs, and the volume of these cuts available from Australia will be down from 2015. Earlier this month, the Indonesian government imposed a new value-added tax of 10 percent on many “non-strategic” imported goods, but importers contacted by USMEF so far have not been assessed the fees on boxed beef. Indonesia also increased its quota period from three months to four months, which will allow a slightly longer purchase and shipping cycle.

Beef importers must still purchase domestic beef in advance of submitting an import application, which has complicated the importation process as importers must prove that such purchases have taken place before being issued import permits. Although the threshold for domestic beef purchases has been reduced to 3 percent of the total volume of beef import applications, the required domestic buying is generally not profitable, according to some importers. On the positive side, there is no limit on the volume for which an importer may apply.

Unfortunately these promising developments may be moot, depending on the degree to which the Indonesian State Logistics Agency (BULOG) assumes control over the supply management of beef and nine other commodities, as recently announced by the Indonesian government. USMEF will provide further updates on this issue as more details become available. Members with questions can email Travis Arp or call 303-623-6328.

While opportunities for U.S. pork are limited in Indonesia, some importers report growing interest in foodservice items, including ribs. January-November exports of U.S. pork to Indonesia totaled 346 mt, up slightly from 2014. The U.S. is Indonesia’s largest pork supplier.