Jakarta. Indonesia is gearing up preparation to start importing cattle from Mexico as negotiation on a similar deal with its neighbor and largest cattle supplier Australia remains in limbo.
Australia is demanding that Indonesia loosen an import restriction that requires imported cattle to weigh at least 350 kilogram and be 30 months old when it arrives in the archipelago.
The requirement limits cattle options that Australia can supply to Indonesia. Indonesia has asked in return that Australia cut the price of its cattle by one Australian dollar (70 US cents) per kilogram.
"Adjusting the requirement would make it easier to import from Australia. If Australia can commit [to the price cut], we will relax the requirement," I Ketut Diarmita, the director general of husbandry and animal health at Ministry of Agriculture said on Monday (09/01).
Trade Minister Eggartiasto Lukita had said earlier that he has been in intense communication with his Australian counterpart to close the deal.
Mexico offers another option
In the meantime, the ministry is also communicating with Mexico to realize an import of 4,000 cattle from the Central American country as soon as next month.
"We have issued a recommendation for the deal a while ago and the Ministry of Trade seems to be on board with the plan. This will secure supply of beef at least until Idul Fitri," Ketut said.
Indonesia will have to rely on imports to meet 40 percent of its demand for beef this year, which is estimated to top out at 720,225 metric tons, according to the Ministry of Agriculture.
Local farmers can only supply 2.57 million cattle to the market, or equal to 437,300 metric tons of beef, the ministry said.
According to the ministry's projection, Indonesia will import a total of 707,313 cattle and 141,463 metric tons of beef this year.
Australia contributes more than 80 percent of Indonesia's cattle imports thanks to its proximity, which makes shipping cheaper than importing from other countries.
Indonesia is Australia's biggest cattle and beef export market, accounting for a half of the country's $5.6 billion a year beef trade.
But the Indonesian government started to source cattle from other countries like Brazil and India last year to reduce its dependence on Australian supply.
Ketut said Indonesia should import 300,000 cattle in January-March this year to make sure there would be enough supply when demand peaks in May and June, when the country celebrates the Islamic fasting month of Ramadhan and Idul Fitri.
"We have contacted the importers to make sure they're ready," Ketut said.
The government dropped its quota system for cattle import last year, giving businesses more opportunity to bid for import permits as long as they make a commitment to bring in one cattle for breeding for every five cattle for slaughter.