Indonesia is re-opening its doors to New Zealand beef after imposing tough restrictions over the past four years.
One meat industry commentator says the sector will gain about $60 million from the move but others say there is still uncertainty over what exactly the move will mean.
The Indonesian Trade Ministry has issued permits for as much as 10,000 tonnes of beef from New Zealand. Photo: 123RF
Attempts by Indonesia to dominate its domestic market with home-bred beef have backfired, with shoppers facing sky-high prices.
The Indonesian Trade Ministry has issued permits for the State Logistics Agency to import as much as 10,000 tonnes of beef from New Zealand for the October-December quarter.
Beef exports to Indonesia have seesawed in recent years, reaching a high in 2010 when Indonesia was New Zealand's second-largest beef market, then worth $185 million a year.
However, trade has been disrupted by the Indonesian government, which has occasionally blocked imports as it seeks self-sufficiency in beef production.
Meat Industry Association chief executive Tim Ritchie said lifting the ban was a positive move but it was uncertain if New Zealand would be the only country supplying beef.
"Ten thousand tonnes if you annualise it, it's about 40,000 tonnes - that's still on the low side, but it depends if this is all going to be sourced to New Zealand or not, or if they are offering it to other markets as well."
In January, beef exports to Indonesia fell by 95 percent because of the new restrictions.
This led to the New Zealand government, along with the United States, filing a request to the World Trade Organisation (WTO) in March for a formal dispute hearing - and they're still waiting for a response.
Mr Ritchie said he hoped allowing New Zealand beef back into Indonesia would show the Indonesian government restricting imports doesn't work.
"This is the second or the third time they found by adapting the policy they did, the market has gone short and the domestic prices on the street in Indonesia have gone through the roof and caused issues with consumers."
Greenlea Meats - based in Waikato - is a beef processor company that sends meat to Indonesia.
Its managing director Tony Egan said the uncertainty of how much beef Indonesia would allow made it hard to plan for the season.
"It is simply very difficult to plan and you constantly have to adjust for the market whether being ready to buy or shutting you out, so it's particularly difficult when it's being controlled at a quota level."
He said the two markets needed to work together.
"New Zealand meat helps keep prices realistic for consumers in the market and doesn't take too much away from their own farmers... There is a happy balance here to be struck and we respect that [they] have to manage more then our position, they have to manage their own farmers' position as well."
Mr Egan said the company would make a bid to supply some of the Indonesian beef import quota.
Meat industry commentator Allan Barber said the sector would gain about $60 million from the deal, however that was nowhere near as much it was making several years ago.
"If the 10,000 tonnes will produce export values of $60 million, if we were to double it back to levels closer to three or four years ago, then that would get us up to over $100 million."
The Ministry of Foreign Affairs and Trade said, despite beef being bought again, the complaint to the WTO against Indonesia's beef restrictions would still go ahead.
