Miller Magazine Issue: 144 December 2021

91 Country Profile MILLER / december 2021 donesian feedlot cattle sourced from Australia represents approximately 25% of total Indonesian beef consumption. Growth in live cattle volumes from Australia to In- donesia was noted through the early 2000s with the Indonesian trade accounting for around half of the total Australian live export volumes annually. During the 2011/12 season, there was a notice- able decline in live cattle export volumes due to animal welfare concerns causing a temporary halt to the trade. However, in recent years annual vol- umes have fluctuated between 500,000 to 700,00 head. The 2021 season has seen fewer volumes transported due to very tight Australian cattle sup- ply and record-high cattle prices. The Indonesian government has a commitment to increasing domestic food security through en- couraging growth in the cattle feedlot sector and imposed a requirement of a minimum 3% of live cattle imports to be breeding cattle. However, this has been halted due to Covid-19 disruptions. During the last twelve months, 99% of the nearly 400,000 head of cattle imported from Australia were feeder cattle. The majority of cattle imported into Indone- sia, therefore, require feeding to get to slaughter weight. This demand will result in both large scale feed demand to compliment the already strong de- mand for noodles and bakery products. ECLIPSING EGYPT? The rise has been dramatic and has seen Indone- sian imports of wheat rise to an average of 85% of the volume which Egypt imports. Whilst Egypt is import- ant, and their tenders are closely watched to drive global directions, Indonesia is a quiet performer. Our view is that Indonesia could eclipse Egypt as the world’s top wheat importer within the decade. The Egyptian market is largely serviced by the black sea origins; Australia is in pole position from a geographic advantage point of view to supply large quantities of wheat into Indonesia. The biggest risk to Australian exports to Indo- nesia is the variable climate and droughts, which deplete our potential exports. This is a risk that will always be present and maybe exacerbated with climate change. However, the reality is that barring short-term droughts, Australian origin wheat will be in a strong position. Our political relationship with China is poor at present; however, our relationship with Indonesia is strong. Industry bodies in Australia (Grain Growers Ltd) have worked with the government to ensure that we have free trade agreements with Indone- sia, which assist in ensuring access to this large scale customer. Australia is lucky to be positioned so close to such a significant trading partner who will not have the capacity to grow its local production massively. CHART 3 CHART 4 CHART 5