Australia and RI strive to revive cattle trade

Australia and RI strive to revive cattle trade

SYDNEY (Bloomberg): Australia and Indonesia are trying to
revive Indonesia's live cattle trade, halted last year when
Indonesia's currency collapsed.

"There are meetings right now in Jakarta between government
and industry to discuss resumption of trade in meat and cattle,"
said Bill Hetherington, an officer at the Australian Meat
Council, which represents Australian cattle processors.

Australia's exports of live cattle to Indonesia in the eight
months ended Aug. 31 shrank to just 3,259 head, compared with
240,000 head in the first eight months of 1997, producer-funded
marketer Meat & Livestock Australia said.

Indonesia was Australia's biggest buyer of live cattle until
last year's economic crisis in Southeast Asia dragged the
Indonesian rupiah to as low as 14,500 to the U.S. dollar from
about 2,500 a year earlier. Now, the Philippines is the largest
market for live cattle exports.

Hetherington said the discussions will cover possible
financial assistance by the Australian and Indonesian
governments.

The Industry and trade Minister Rahardi Ramelan said Tuesday
that the Indonesian government would subsidize the import of cows
after the Australian government ruled out a request to provide
subsidies.

"That's pretty big news, depending on whether they actually
get the money to do that," said Peter Weeks, chief economist and
manager of livestock information services at Meat & Livestock
Australia.

Christopher Creal, executive director of the Australian Meat
Council is involved in the talks in Jakarta. Others include Bill
Cordingley from Meat & Livestock Australia and Gary Cullen, an
officer at the Australian Department of Primary Industry &
Energy.

Earlier this month the Indonesian government reported it was
set to import at least 100,000 cows from Australia to meet
domestic demand and rebuild local herds in the lead-up to
holidays at the end of the year.

Australian live cattle exporters and beef market analysts
hadn't expected the trade to resume until the rupiah rose to at
least 7,000 to the U.S. dollar, Weeks said.

The rupiah is presently 11,100 to the U.S. dollar.

While Indonesian authorities would like to see the sale
proceed, both the Australian and Indonesia cattle industries are
hesitant about the proposal, said Kevin Sheill, chief executive
officer of Livecorp., which represents cattle exporters, for fear
that it will create expectations within Indonesia that low priced
beef will be available.

"It would also create expectations that people would get cheap
meat," he said, possibly spoiling the commercial environment for
months or years to come. "There's no way in the world we could
supply enough meat to significantly lower beef prices there."

If the sale does proceed, "it really must be in a way that
doesn't impact on the potential for a commercial trade to
develop," he said.