Parliamentarians and the cattle industry have been caught off guard by Indonesia’s decision to slash the number of Australian cattle it imports by 80%.
The Indonesian government told Australian exporters on Friday that it would import 50,000 head of cattle in the July quarter, down from 250,000 in the last quarter.
A spokesman for agriculture minister Barnaby Joyce said the number of permits issued by Jakarta was “well below industry expectations”.
“A reduction in the size of the quota is likely to see a shortage of cattle in Indonesian feed lots, reduced slaughter numbers and upward pressure on beef prices in Indonesia,” the spokesman said.
The chief executive of the Australian Live Exporters Council, Alison Penfold, said Jakarta had offered no indication that the quota cut was coming.
“This is much lower than we’ve had in the last five years,” she said. “We’re disappointed and surprised by the figure, but we’ll work within the parameters that are set.”
Opposition leader Bill Shorten said the move was of “grave concern”.
“I sincerely hope that our relationship with Indonesia at the political level is not the reason driving this reduction,” Shorten said.
Shadow parliamentary secretary Matt Thistlethwaite told Sky News on Tuesday that Australia’s relationship with Indonesia “is at one of its lowest points”.
Penfold refuted the claim that the reduction was due to bilateral tensions.
“There are domestic issues playing out within Indonesia,” she said. “This is purely an issue relating to internal issues around deciding numbers around live cattle imports. It’s not dragging in other issues that might be playing out in the relationship between Australia and Indonesia.”
The deterioration of the bilateral relationship “certainly doesn’t help” the cattle industry, shadow agriculture minister Joel Fitzgibbon told Guardian Australia.
Shortly after taking office in late 2014, Indonesian president Joko Widodo had flagged that he wanted Indonesia to be self-sufficient in beef production within a year.
But Penfold warned that the country was far from self-sufficiency, pointing to the fact that importers had asked for 200,000 head of cattle in the July quarter for their feed lots.
Fitzgibbon insisted it was possible for Australia to continue fulfilling a role in Indonesia while it moves towards self-sustainability.
“Trade with Indonesia needs constant care and attention,” he said.
Fitzgibbon said internal divisions within the Coalition over the building of the Shenhua mine in Joyce’s New England electorate meant the minister was not giving the bilateral relationship enough attention.
“He’s in hiding,” Fitzgibbon said.
A spokesman for Joyce said, “The Australian government will continue to make representations on behalf of exporters to ensure this important trade relationship is maintained”.
