17 Sep 2013

Indonesia relaxes beef import rules

2:56 pm on 17 September 2013

Beef exports to Indonesia should take off again shortly, according to the Meat Industry Association.

The Indonesian Government has signalled it is willing to lower its trade barriers and allow in more beef imports to ease soaring domestic beef prices in the country caused by the lack of supply.

Meat Industry Association chief executive Tim Ritchie says the import quota system had resulted in a massive reduction in the amount of beef New Zealand was sending to Indonesia over the last three years.

Beef volumes had dropped to about 20% of 2010 levels, he says, with a lost value of about $150 million a year.

Mr Ritchie says Indonesia has replaced the quota system with a price reference system, which he believes should allow for the trade to pick up again.

Under the new system imports will be allowed, providing the price of beef does not drop below a certain level.

There are still restrictions on where imported meat can be sold and on certain cuts at the low end of the market. Mr Ritchie says the new system still does not comply with World Trade Organisation guidelines.

He says consumers in parts of Indonesia have been paying very high prices for their beef as their domestic beef production simply could not meet local demand.

"There's been some real price inflation, prices going up 50, 60, 70% and clearly to people who are used to the beef dish ... they haven't been very happy about that," he says.