Australia may sell more beef in RI amid outbreak

Australia may sell more beef in RI amid outbreak

Madelene Pearson, Bloomberg/Melbourne

Cattle ranchers in Australia, the world's second-biggest beef exporters, are expecting increased beef demand in Indonesia, where an outbreak of bird flu is prompting some consumers to spurn poultry.

AustAsia Pty is expanding the capacity of its three feedlots in Indonesia by as much as 67 percent to 100,000 head within 12 months to capitalize on growing local beef demand, John Griffith, its Brisbane-based general manager, said in an interview on Monday. Australian beef exports to Indonesia tripled in August from a year earlier, government figures show.

"Despite Indonesia being a poor country, it's quite a high- price market," Griffith said.

Poultry is the main source of meat protein in Indonesia, Southeast Asia's largest economy and the world's fourth-most populous nation. The country's poultry industry may shrink as much as 10 percent this year because concern over bird flu is cutting demand among city dwellers, Don P. Utoyo, national coordinator for the Indonesian Poultry Society, said last week.

Beef may fill some of that gap. More than 140 million chickens have been slaughtered in Asia to arrest the spread of the deadly H5N1 bird flu strain that's claimed at least six lives in Indonesia since July.

"In the first week of August there was a significant increase in demand for cattle," said Jack Gleeson, national manager of livestock operations with Elders Ltd. in Adelaide. Some beef wholesalers reported demand rose as much as 30 percent over two weeks, Gleeson said. "Everyone I asked would say that was because of bird flu."

Any increase in sales of Australian beef to Indonesia may be limited by reduced supplies and a stronger local dollar that's pushed up the cost of Australia's beef, traders said.

The Australian currency has gained 19 percent against the Indonesian rupiah in the past 12 months. The same time, bans on U.S. beef in Japan and South Korea, Australia's highest-paying Asian markets, has limited supplies available for Indonesia.

"We've not gone close to covering that gap left by the U.S.," said Don Mackay, chief executive of Australian Agricultural Co., the country's biggest cattle rancher.