Aussie cattle exporters watch RI<\/p>\n
MELBOURNE (Reuters): Australia's live cattle exporters are
\nclosely watching Indonesian politics as turmoil surrounding the
\nfuture of President Abdurrahman Wahid dampens hopes for a surge
\nin trade this year.<\/p>\n
Exports to Indonesia have been recovering steadily since the
\nAsia crisis-inspired slump in 1997, and had been expected to
\nincrease this year on the 297,000 heads of cattle sold in 2000.<\/p>\n
However, growing political tensions have pushed the rupiah to
\nnear three-year lows against the U.S. dollar in recent months to
\nits current level around 11,000, driving up the price for
\nimporters and cutting export margins.<\/p>\n
Indonesia's top legislative assembly will hold an impeachment
\nhearing against Wahid during a special session from Aug. 1 over
\nhis erratic 20-month rule and two financial scandals.<\/p>\n
\"Everyone expected really big things this year in 2001 and it
\ncertainly started OK,\" said Northern Territory Livestock
\nExporters Association chief executive Patrick Underwood.<\/p>\n
\"But there have been a couple of things that have slowed the
\ntrade down, one of them being the political situation in
\nIndonesia,\" he said.<\/p>\n
Another factor has been a dive in exports to the Philippines
\nwhere there has been a slump in beef consumption due to publicity
\nabout international problems with BSE (mad cow disease) and foot
\nand mouth disease (FMD). Currency weakness and strong cattle
\nprices are also constraining exports.<\/p>\n
Australia's live cattle export trade took off in the 1990s as
\nbooming Southeast Asian economies in the early part of the decade
\nhelped fuel consumer beef demand.<\/p>\n
Indonesia alone promised to become a market bonanza, importing
\nmore than 400,000 cattle in 1997 before the Asia crisis struck,
\nslashing imports the next year to just 40,000.<\/p>\n
At its peak in 1997, Australia was exporting 948,000 live
\ncattle, with Indonesia and the Philippines the major
\ndestinations.<\/p>\n
Exports recovered by 2000 to 895,762, worth A$480 million
\n(US$245 million), and the industry was hoping to come close to
\nthe one million mark in 2001, the Australian Livestock Export
\nCorp said.<\/p>\n
However the latest available figures for January to April show
\nexports running about 30,000 behind last year.<\/p>\n
The good news comes from Egypt and the Middle East where mad
\ncow disease and FMD worries have shored-up exports, due to
\nconcerns about European cattle.<\/p>\n
Darwin-based South East Asian Foods (SEAF) said it had been
\nable to maintain shipments by cutting costs at Indonesian
\nfeedlots, offsetting the weak rupiah and high Australian cattle
\nprices.<\/p>\n
SEAF merged this year with Jakarta-based Santosa Agrindo,
\nwhich has Indonesian feedlots, an abattoir and processing plants
\nfor its own brands, providing vertical integration benefits.<\/p>\n
\"There is no margin left in slaughter animals sold straight
\noff the boat,\" SEAF live export manager Bernie Brosnan said.<\/p>\n
The live cattle trade has transformed the Northern Territory
\ncattle industry, with Darwin just five sailing days from Jakarta,
\nproviding a new market for producers sometimes beyond the reach
\nof Australia's southern and eastern markets.<\/p>\n
Producers have focused on breeding Brahman cattle, which are
\ntick resistant and better suited to tropical conditions, compared
\nto the European breeds which dominate most of Australia's herds.<\/p>\n
Exports from Darwin to Indonesia reached 69,379 head for the
\nfirst half of 2001, compared to 66,415 head a year ago,
\nreflecting a flattening of demand.<\/p>\n
But Underwood forecast Indonesian imports of live cattle could
\nstill rise sharply if the economic and political situation
\nallowed the rupiah to strengthen.<\/p>\n
\"Indonesia showed in 1997 that it can take enormous amounts of
\ncattle. When the dust settles Indonesia is quite capable of
\ntaking five, six, seven hundred thousand cattle from Australia,\"
\nhe said.<\/p>\n
\"If the rupiah dropped below 10,000 there would be boats
\nroaring out of the harbor.\"<\/p>",
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