Indian buffalo meat en route to Indonesia, but what impact will it have on demand for Australian live cattle exports?

Frozen buffalo meat from India is unlikely to sell well in the wet markets of Indonesia, according to feedlot director Dicky Adiwoso.

The first shipment of frozen Indian buffalo meat is en route to Jakarta as part of the Indonesian Government's new plan to bring down beef prices and reduce reliance on Australian live cattle exports.

Indonesia is expected to import 10,000 tonnes of buffalo meat this year from 10 meatworks located in foot and mouth disease (FMD)-free zones of India.

Cattle industry veteran and director of the PT Juang Jaya Abdi Alam feedlot in Indonesia, Dicky Adiwoso, said it was unclear what impact the buffalo meat would have on the market.

"There's a demand in Indonesia for a lower-cost red meat protein, but I think people still prefer fresh meat in the market," he told ABC Rural.

"So this chilled or frozen buffalo meat [from India] is not what the wet markets or the Indonesian people normally buy, so it's likely to end up in the factories to make sausages and meatballs."

Mr Adiwoso said the challenge for Indonesian cattle producers and feedlots was to show consumers that their product was of better quality than Indian buffalo meat.

External Link Impact of buffalo meat

"As the income level of Indonesians goes up, the market will demand high quality beef, and that's where we need to position ourselves," he said.

"Our view of the Indian buffalo meat is that it's at the bottom of the market.

"It will serve a purpose, but there's still a market for live cattle from Australia as well as quality chilled beef from Australia.

"The live export industry and the feedlot industry in Indonesia is trying to find a new equilibrium of its production cost to position itself in this new segmentation of the market."

Foot and mouth disease a concern

Mr Adiwoso said the sourcing of buffalo meat from a nation that had FMD was a concern.

"We're all concerned about this, however we have to look at it as a challenge," he said.

"Hopefully the Indonesian government will understand that this is not a long-term solution, it's a short-term solution."

He said amendments to the animal health law which now allowed Indonesia to source meat and live cattle from FMD-free zones was being challenged in the Constitutional Court.

Buffalo meat could halve demand for live cattle exports

Veterinarian and former chief executive of the Northern Territory Livestock Exporters Association, Dr Ross Ainsworth, said the importation of Indian buffalo meat was the most significant event in the Indonesian beef industry since the decision to allow importation of Australian feeder cattle in 1990.

In his latest online Southeast Asian Beef Report, Dr Ainsworth said the buffalo meat trade could halve demand for Australian live cattle exports to Indonesia.

"I expect that the medium-term result will be a reduction in import demand for Australian live cattle to around 300,000 per year from calendar year 2017 onwards," he said.

"Indonesian consumers will still require fresh meat for the wet markets, so some Australian feeder cattle will still be fattened here, while about half of the current market will be captured by Indian beef."

According to Indonesia's State Logistics Agency (Bulog), the first shipment of Indian buffalo meat is due to arrive in Jakarta by the end of the month.

Source: Indian buffalo meat en route to Indonesia, but what impact will it have on demand for Australian live cattle exports?