Indonesian meat traders hope for rebound in beef sales after lull post-Eid al Fitr

JAKARTA – The chairman of Indonesia Meat Traders Association (APDI), Asnawi, is hoping for a boost in beef sales during Eid al Adha following the drop post-Eid al Fitr, he told Salaam Gateway.

The peak season for traders is two days before Eid al Fitr, said Asnawi, during which sales rise an average of 10 percent and they sell 660 to 700 cows a day.

Sales drop by almost half, a week after Eid al Fitr.  

“Currently we have more than 3,000 traders across 151 traditional markets. During Eid al Adha people usually buy more beef, so we hope our sales will rebound,” he added.

“As small traders our sale capacity is around 15 to 100 kilograms a day. We may not be able to import but we play in a different sector of the market,” he told Salaam Gateway.

Asnawi believes the government’s beef import program will strengthen national food security and not harm smaller traders.

President Joko Widodo’s government has set a program toward creating self-sufficiency in beef supply, which has resulted in soaring prices due to shortages as local farms struggle to increase their stock.

The president has said that beef prices should be maintained at 80,000 Indonesian rupiah ($6) per kilogram but prices have soared beyond 110,000 rupiah, especially during periods of high demand such as Ramadan and Eid al Fitr.

PT Impexindo Pratama, a mid-sized importer, would need to bring in 30 to 40 tons of beef in order to keep prices down, its general manager Fenny told Salaam Gateway.

“Our license will expire later this month and we would like to renew it, anticipating a rise in demand ahead of Eid al Adha. We have been selling at lower prices, around 60,000 to 79,000 rupiah to help the government reduce prices in the market,” she said.

The company previously received a license from the Ministry of Trade Affairs to import 36 tons for 2016. It imports different types of beef including knuckle, chuck tender and frozen 85cl, primarily from Australia, Fenny said.

Beef imports stood at 50,424 tons to date, according to data from Indonesia’s Central Bureau of Statistics (BPS). 

In June this year, which largely coincided with the fasting month of Ramadan, beef imports reached 16,120 tons, the highest of any month in 2016.

Imports in 2015 reached 50,690 tons.

BUFFALO MEAT

The Indonesian government has issued licenses for 45,000 tons of beef so far this year.  This includes 10,000 tons for the state-owned logistics board Bulog, which deals with food distribution and price controls. Other importers were allocated 17,000 tons, and a majority of the remaining 18,000 tons have been allocated to other state-owned companies.

To date, Bulog has imported 2,700 tons and other importers have brought in 23,000 tons, Musdhalifah Machmud, deputy minister for food and agriculture at the coordinating ministry for economic affairs, told Salaam Gateway.

The government has allowed private companies to import beyond their quotas to make up for lower numbers from state companies.

The government is still mulling other steps to reduce beef prices, which have soared to more than 110,000 rupiah ($8.40) per kilogram, including importing 9,500 tons of buffalo meat from India.

“For the next import, we will evaluate the volume we extend to state company Bulog. But for the near-term, we also plan to import and sell buffalo meat from India at a lower price, around 60,000 rupiah per kilogram,” she added.

Beef prices normally drop ahead of Eid al Adha due to an increase in supply, she said.

In a bid to increase local stock of cattle, on August 8 Trade Minister Enggartiasto Lukita said the government plans to require importers to start building breeding farms in order to get import licences.

In June the Indonesian Business Competition Supervisory Commission (KPPU) called for the abolishment of the cattle import quota system, to be replaced with tariffs in order to break the control of local cartels that have been blamed for soaring beef prices.

($1 = 13,115 Indonesian rupiah)

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