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.