Indian buffalo meat in Indonesia: initial impacts on livestock exports

11 July 2017

While Australia’s livestock producers are receiving high prices for their stock, livestock exporters are experiencing some of the toughest times on record. The trade is struggling with the high price of livestock and increasing pressure from major markets to drop price or risk losing marketshare. In Indonesia, the influx of Indian buffalo meat is making market conditions particularly challenging.

As Australia's largest live cattle market, Indonesia is experiencing difficulty in importing Australian cattle partly due to the increasing presence of cheap Indian buffalo meat, at a time of reduced supplies combined with high price of Australian feeder cattle. Australian cattle exports for the six months to 30 June 2017 to Indonesia are down 29% on the same six months in 2016.

It has been a year since Indian buffalo meat legally entered Indonesia as a measure taken by the Indonesian government to reduce domestic beef prices. This cheaper product was initially sold only in greater Jakarta, including wet markets where around 75% of Indonesians buy fresh produce. With around 70% of Australia’s feeder cattle imports also channelled into traditional wet markets, this is a sector that has been impacted the most.

The MLA/LiveCorp Livestock Export Program (LEP) has been actively monitoring the penetration of Indian buffalo meat in wet markets in Jakarta, Medan, Bali, Surabaya, Makassar and Kupang. Recent surveys show that Indian buffalo meat is now routinely found in greater Jakarta, selling slightly cheaper than fresh beef at around IDR 85,000-105,000/kg, with locally processed fresh beef 10% dearer.

Indian buffalo meat is largely purchased in wet markets by bakso meatball sellers and smaller informal food businesses that are highly price sensitive and less concerned with meat quality and food safety. This is the sector which Indian buffalo meat has significantly penetrated. As a result, Indonesian feedlotters are experiencing a slowdown in demand from butchers who have difficulty selling fresh beef from Australian cattle, as it is more expensive than frozen/defrosted Indian meat.

The recent cattle slaughter ban in India has not had any impact on Indian buffalo meat imports into Indonesia. This may be due to the sole government importer still having sufficient stock. The LEP will continue to monitor Indian buffalo meat penetration and will work closely with industry and government to reinforce Australia’s commitment to Indonesia.

More information

Peter Dundon
pdundon@mla.com.au

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