“All the noises were positive that we might see more stable access than before,” he said after returning from the trade mission led by Prime Minister John Key.
NZ sells its beef easily into export markets but an open Indonesian market would increase demand and be favourable for pricing.
Indonesia was the third biggest beef market for Alliance in 2009-10, but tough import restrictions since have seen this drop to become the ninth biggest in the latest season.
“Access has been open one minute and closed the next, making it very difficult to plan.”
Some Indonesian government leaders wanted the country to become self-sufficient in beef supply but the shortage of product had pushed prices beyond most consumers.
“The reality is that they’re not self-sufficient, because as the country becomes wealthier more people want to eat beef, and there’s also been work done in Indonesia showing that the people there need more protein in their diet.”
For many of those, lower-cost imported beef cuts would be ideal, while there were also great opportunities for premium cuts into top-end hotels and retail outlets.
With a population of 250 million and growing at 10% a year, Indonesia had great potential for NZ with improved access.
It had just loosened some import controls for a limited period, but this coincided with the low point in the NZ processing season.
“We’re committed to other markets and when this happens you take a view on how much beef you’re likely to have and what markets you can send it to,” Taggart said. “You’ve got markets that are transparent and open all year round versus a market which might be open for a few months.”
Alliance had two plants approved for beef exports to Indonesia and had very good import partners who could place a lot more product than their permits allowed. A benefit was that Indonesia had very good cold-chain facilities able to handle chilled beef.
Long-term, Taggart believed sheep meat could also become more popular in Indonesia, although it would be up against lower-cost chicken and farmed fish, while Australian sheep meat sold there at a lower cost than NZ. Alliance does send lamb to hotel and restaurant buyers.
