Market Report : S.E. Asia Beef Industry
4th Edition : March 2014.
Summary
 Indonesian live cattle prices have finally begun their long predicted
slide during the end of March with abattoirs offered live cattle at prices
up to 10% down on last month. This appears to be driven by both
additional output from feedlots and stronger supplies of discounted box
beef.
 Indonesian government confirms breeder cattle imports no longer tied
to feeder import permits.
 After many years of closure, the Indonesian goverment has announced
that feeder cattle imports can recommence into East Java
 Jakarta’s worsening port conjestion represents a serious impediment to
West Java imports
 Reports from our Vietnam agent commence this month indicating good
returns for importers of live cattle.
 Livestock disease outbreaks are impacting regional lifestock traffic and
production in Thailand (FMD), Laos (FMD), Cambodia and Vietnam
(AI).
 Rumours related to the opening of the China live import market to
Australian cattle continue to increase in volume and credibility.
Indonesia
The long predicted price slide for live cattle leaving the feedlot has finally
commenced with reports of offers as low as Rp35,000 per kg live ex feedlot gate.
This coincides with reports of significantly increased supplies of boxed beef in
Jakarta wet markets with active price discounting.
The Indonesian government has formally announced that the importation of
breeding cattle will no longer be tied to feeder/slaughter cattle import permits. As
the electoral process will take up most of the rest of 2014 it is unlikely that this
policy position will change until at least 2015.
Trade flows continue to increase at Tanjung Priok, Jakarta’s (and West Java’s)
port. Infrastructure upgrades are limited and have no hope of accommodating the
additional trade activity (of which live cattle is only a minor part). This has led to
serious delays in the docking and discharging of livestock vessels in Jakarta which
are further compounded by traffic jams and truck shortages.
East Java is one of the principal areas for cattle breeding with excess supplies
traditionally sent to the major markets in Jakarta. For the last 6 years or so, imports
of feeder cattle to the province of East Java have been banned to ensure that
imported cattle did not compete with local production. Since the reduction in
permits 3 years ago, larger numbers of cattle have been exported from East to West
Java for both fattening and slaughter. Last year East Java banned the export of
feeder cattle from the province (to West and Central Java) to keep local numbers
up and promote value adding. The recent opening of the East Java market to feeder
imports from Australia is another strong indicator of the severe decline in
Indonesia’s domestic cattle herd.
The number of licensed cattle feedlots in Indonesia has grown from the mid
twenties to 37 facilities (including the two new ones in East Java). This is mainly
driven by the freeing up of import licenses.
Graph of Live weight prices since October 2013
Rp40,000.00
Rp39,000.00
Rp38,000.00
Rp37,000.00
Rp36,000.00
Rp35,000.00
Rp34,000.00
Rp33,000.00
Rp32,000.00
Rp31,000.00
Rp30,000.00
Oct 13
Nov 13
Dec 13
Jan 14
Feb 14
Mar 14
From graph above :
November 2013 : Government fixed live cattle prices at artificially low levels
using pending import permit releases as leverage
March 2014 : Dramatic increase in imports in Nov/December finally work
their way through the system.
Vietnam
We now have agents in Vietnam providing information on the market in both
Hanoi (north) and Ho Chi Minh City (south).
Regional Live Slaughter weight cattle prices : Currency Converted to US$
Local Price Conversion
Equivalent
Live cattle
rate to USD$ US$ live
Indonesia
Rp 36,000
11,400
3.16
Vietnam
D 76,000
21,000
3.62
Thailand
B 100
32.5
3.07
Philippines
P 97.5
44.9
2.17
Exchange rates are taken from the XE Website
Beef is the most favoured meat with Vietnamese consumers who are increasingly
able to afford it with GDP growth of 5%+. Dwindling local supplies are now
supplemented by imports from both live cattle from Australia and box beef from
around the globe.
Foot and Mouth Disease (FMD) in neighbouring countries and Avian Influenza
(AI) in Vietnam are resulting in serious disruptions to regional livestock
movements. Given the long and remote boundaries between all these countries,
border closures immediately lead to larger price differentials on either side of the
border which in turn provide more incentive than previously to smuggle the
restricted product which then helps the disease to spread even more quickly.
The traditional supplies of live cattle from Cambodia (and Thailand and Laos) into
South Vietnam have largely dried up and are beginning to be replaced by imported
Australian cattle.
As the majority of the population is Buddhist, the peak food consumption period
for Vietnamese is their Tet holidays which is the Chinese new year – late January
to early February in 2014. Prices tend to reduce significantly following this holiday
period
While there are some live cattle, close to the Chinese border that are slaughtered in
Vietnam with their fresh meat exported (smuggled) across the border into China,
the majority of all live cattle slaughtered in Vietnam are for domestic consumption.
Sea Freight
Darwin to Jakarta : Approx 70-75 cents per kg live weight
Darwin to Vietnam : Approx 85-90 cents per kg live weight
Thailand
The Thai market is steady despite some serious disease outbreaks including : FMD in the North East at the end of February – mainly dairy cattle area
 FMD in the North first week of March
While Thailand actually bans the export of live cattle across its borders (with a few
exceptions) the smuggling of significant numbers into China via barges upstream
on the Mekong river continues.
The negotiations between the Thai and Australian governments to establish a
feeder cattle protocol are in their final stages with Thai feedlotters hoping to
receive shipments later this year.
The price shown in the table below for live slaughter steers in Thailand is the local
price for local sale. The farm gate price for slaughter cattle smuggled to China is
up to Baht 120.
Philippines
Little change in the Philippine market with the Christian season of Lent currently
resulting in slightly weaker demand for meat products although prices seem to be
unaffected.
Location
Date
Wet Market
95,000
100,000
104,000
100,000
95,000
120,000
120,000
120,000
120,000
100,000
95,000
90,000
90,000
95,000
95,000
95,000
Super
market
112,950
98,900
105,300
104,000
105,000
125,000
110,000
127,750
126,500
126,000
126,000
89,000
93,000
90,000
90,000
85,000
Broiler
chicken
35,000
20,000
22,000
30,000
28,500
35,000
35,000
35,000
35,000
35,000
35,000
37,000
20,000
24,000
20,000
18,000
Live cattle
Slaughter Wt
31,500 *
34-37,000
38,000
39,000
36,000
34,500
33,000
34,000
36,000
38,000
36000
34,000
33,200
39,500
39,500
37,500
Jakarta
Nov 13
Dec 13
Jan 14
Feb 14
March 14
Oct 13
Nov 13
Dec 13
Jan 14
Feb 14
March 14
Nov 13
Dec 13
Jan 14
Feb 14
March 14
Feb 14
200 Peso
208 P
125 P
March 14
200 P
210 P
125 P
97.5 P Cattle
104 P Hogs
97.5 P Cattle
105 P Hogs
Thailand
Feb 14
March 14
220 Baht
220 B
250 B
250 B
70 B
70 B
100 B
100 B
Vietnam
Hanoi
Ho Chi Minh
March 14
Dong
180,000 D
200,000 D
200,000 D
180,000 D
50,000 D
47,000 D
77,500 D
75,000 D
Lampung
Medan
Philippines