Australia sees Indonesia as growing beef mart

Australia sees Indonesia as growing beef mart

SYDNEY (Reuter): Indonesia was steadily becoming a significant
market for Australian beef and strong export growth was set to
continue, the Australian Meat and Livestock Corp (AMLC) said
yesterday.

After five years of strong growth, Australian beef sales to
Indonesia in calendar 1997 were projected to rise to 18,000 tons
from 16,615 tons in 1996, the AMLC said in its latest Meat and
Livestock Review.

Indonesia's growing demand for Australian meat had been driven
by increased demand for red meat as a result of increasing
disposable income, AMLC marketing assistant Southeast Asia
Michelle Reich said in the monthly review.

It had also been driven by domestic production which could not
keep pace with increases in consumer demand, she said.

Higher incomes and a growing middle class in Indonesia were
providing many opportunities for Australian beef, heightened by
the market's geographical location and competitive pricing by the
Australian industry.

Economic growth of six percent to seven percent a year in
Indonesia over the past six years had resulted in an emerging
substantial middle class, with 10 percent of Indonesia's
population of 192 million reported to have an average income
above that of Australians, she said.

For many commodities, relatively high duties or other access
restrictions tended to result in high prices for imported
products, restricting sales generally to middle to upper class
Indonesians or expatriates and visitors.

This was slightly different for beef and there were
opportunities for different beef products to penetrate the
various market sectors.

Australian frozen beef exports to Indonesia were primarily
destined for the manufacturing sector, the wet market and, to a
lesser extent, supermarkets.

Chilled product, however, was primarily utilized in
supermarkets and foodservice sectors.

Strongly rising Indonesian beef demand had occurred in
conjunction with substantial increases in live cattle exports.

"Although there are informal controls being utilized by the
Indonesian authorities to manage imports, these are infrequent
and do not appear to have unduly prevented imports from growing,"
Reich said.

Indonesia now had about 30 commercial feedlots with total
capacity of about 360,000 tons of finished beef a year,
especially from Australian feeder steers.

"Indonesia's proximity, strengthening economy and large
population all combine to create a unique trading customer for
Australian beef and lamb," she said.

"Currently the Indonesian agricultural industry is struggling
to satisfy the growth in consumer demand for these red meat
products. Opportunities are evident at all levels, including
retail, the hotel, restaurant and institution trade and the
manufacturing sector," Reich said.

Australia exported 738,000 tons of beef and veal worldwide in
1995/96 ended June 30.