For northern cattle producers, access to overseas markets for live cattle is pivotal to their operation. 2024 began with trade uncertainty which left the industry holding its breath on future trade with Indonesia. However to much relief, in recent days Indonesia issued the first permits allowing the import of live Australian cattle.

Indonesia is Australia’s top destination for cattle. On average 52% of live export cattle have been sent to our northern neighbours. In recent years the island nation (home to 275 million people), has signed permits allowing 600k head or more cattle to be imported from Australia. However Australian live cattle exporters have faced increased competition in this market from both processed boxed beef and Buffalo meat. The start of 2024 saw Indonesian government officials delay putting pen to paper on the permits, with only confirmation of an approved permit coming in late last week.

Total live cattle exports for the first month of 2024 were down 24% on the five-year average with 48.2k head exported. However, this was an increase of over 23k head compared to January 2023. After a busy December, figures released by the Department of Agriculture Water & Environment show that of this total, only 600 head were exported to Indonesia. On average 23.6k  head have been exported live to Indonesia in January.

Volumes to other key destinations in January did make up for some of the shortfall. Most notably the breeder market into China reached 28.8k head imported for the month of Jan, a 343% increase on the five-year average for January. This accounted for 60% of all cattle leaving Australian shores in January. The number of cattle exported to Malaysia in January while only small in comparative terms, was the largest monthly volume to this market since mid-2022.  For feeder cattle, exports to  Vietnam remain below average levels but were up 49% year on year.

2023 was a challenging year for cattle live exports with the total for the year down 23% on the five-year average to 676k head. This was in part due to lacklustre demand from customers facing economic challenges, increased competition, and biosecurity measures. The price adjustment since the highs of 2021/22 has now made Australian cattle more competitive into these markets. 

What does it mean?

The signing of the Indonesian permit is a much-welcomed relief for northern producers and solid demand is anticipated ahead of religious festivals. Traditionally, volumes to Indonesia rise from January to peak in June. With total 2024 exports starting strong on last year, a solid wet season, and now Indonesia re-entering the market, this provides more optimism for demand in the year ahead. How flooding conditions impact the muster and cattle supply is yet to be seen.

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Key Points

  • Indonesia has renewed the permit for Australian live cattle exports
  • Despite the absence of Indonesia, total January volumes were almost double those in January 2023.
  • The demand outlook is improving, despite challenges from market competition.

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Data sources: MLA, DAFF, Reuters, Mecardo

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