Imported Australian Cattle Prices Jump 40% Above Cap<\/p>\n
Jakarta. A wide gap has emerged between import costs and the\ngovernment\u2019s cattle price cap, with Australian feeder cattle priced at\nRp 81,658 per kg, roughly 40% above the official benchmark, raising the\nrisk of beef inflation in Greater Jakarta.<\/p>\n
Data from the Agriculture Ministry\u2019s Directorate General of Livestock\nand Animal Health shows imported Australian feeder cattle averaged Rp\n81,658 ($4.75 or AUD 6.63) per kilogram of live weight as of April 20,\nwell above the official purchase reference (HAP) of Rp 56,000\u201358,000 per\nkg at the feedlot level.<\/p>\n
The pricing reflects an Australian free-on-board (FOB) price of $4.32\nper kg, with freight at $0.15 and insurance at $0.07, bringing the cost,\ninsurance and freight (CIF) value to $4.53 per kg. Using an exchange\nrate of Rp 17,150 per dollar, landed costs in Indonesia reach about\nRp79,666 per kg before handling costs and losses.<\/p>\n
A breakdown shows female feeder cattle priced at Rp 77,177 per kg,\nwhile male cattle reached Rp 86,139 per kg. For steers, landed prices\nalone have climbed to Rp 84,038 per kg, underscoring the widening gap\nwith domestic price caps.<\/p>\n
Agriculture Ministry Livestock and Animal Health Director General\nAgung Suganda said the domestic cattle industry remains structurally\nconstrained, with around 90% of production handled by smallholders who\ntypically own just two to four cattle per household. Many still treat\ncattle as savings rather than a profit-oriented business, while facing\nhigh inter-island logistics costs and volatile feed prices.<\/p>\n
\u201cOn the other hand, there is still a significant supply gap that\nmakes Indonesia dependent on imports to meet domestic demand. There is a\n30\u201340% supply gap currently filled through imports. And at present, 100%\nof Indonesia\u2019s feeder cattle imports come from Australia,\u201d he said.<\/p>\n
Despite strong long-term demand, supported by a large population and\nrelatively low beef consumption of around 2.7 kg per capita annually,\nlocal supply continues to lag.<\/p>\n
Indonesia\u2019s cattle population stood at around 13.5 million head in\n2024, including 755,000 buffalo, with total beef production reaching\nabout 515,000 tons.<\/p>\n
\u201cTo increase population, we are strengthening farmer capacity through\ntraining and institutional support, while also encouraging investment in\nboth dairy and beef cattle, including imports of superior breeding\nstock,\u201d Agung said, adding that more than 150 private livestock\ncompanies have been involved in supporting breeding programs.<\/p>\n
Officials are now weighing a revision to the government\u2019s cattle\nprice reference as import costs continue to climb.<\/p>\n
Livestock Processing Director Makmun said current feeder cattle\nprices, around $4 per kg for heifers and $4.56 per kg for steers, are\nwell above historical levels that rarely exceeded $3.5 per kg.<\/p>\n
\u201cThis is a difficult position because our reference price is capped\nat Rp58,000 per kg, while the purchase price faced by businesses is\nalready very high. This is a warning for all of us,\u201d he said.<\/p>\n
The Agriculture Ministry and the National Food Agency are currently\nreviewing the price cap to bridge the gap between rising import costs\nand domestic regulations.<\/p>\n
\u201cIf we suppress prices too much, there is a risk that importers will\nstop purchasing. That could lead to shortages,\u201d Makmun said. \u201cIf there\nis no stock but businesses are forced to sell at the current reference\nprice, that would be even more dangerous.\u201d<\/p>\n
The impact is expected to be most pronounced in regions that rely\nheavily on imported cattle.<\/p>\n
\u201cOutside Java it still looks relatively safe. But areas that rely on\nimported cattle, especially Greater Jakarta, will likely see price\nincreases,\u201d he added.<\/p>\n
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