However, Antara news agency - quoting Indonesian Trade Minister Thomas Lembong - stated that the current maximum import quota of 600,000 live cattle could be adjusted upward if needed. Analysts therefore believe that imports of beef may go up to at least 800,000 live cattle in 2016 as Indonesia’s annual per capita beef consumption is estimated to increase from 2.58 kilograms in 2015 to 2.61 kilograms in 2016.

Data from Indonesia’s Trade Ministry show that Indonesia had a 237,890 tons beef deficit in 2015. This figure is equal to about 1.39 million live cattle. Indonesia only managed to supply 2.45 million animals domestically. Indonesia’s local farmers and breeders are mainly located in the provinces of East Nusa Tenggara, South Sulawesi, and Lampung (Sumatra).

The Indonesian government is eager to make the country self-sufficient in various commodities (in the mid-term), most notably rice, beef and sugar. By reducing dependence on imports Indonesian President Joko Widodo tries to support the welfare of local farmers. In that context Indonesia has implemented import quotas for certain food products. However, due to disappointing domestic supplies, these import quotas caused volatile prices, shortages, inflation and worried investors.

PPSKI Chairman Teguh Boediyana added that the Indonesian government has been miscalculating and trying to cover up mistakes regarding its beef policies in recent years. The announcement that Indonesia may need to import up to 600,000 (live) cows in 2016 shows that self-sufficiency in beef is still far away.

In 2015 beef imports from Australia declined sharply to 39,134 tons from 53,140 tons in the preceding year. However, Australia will remain Indonesia’s main source of imported cattle and frozen beef in 2016. Australia is the world’s third-largest beef exporter.

Joni Liano, Executive Director of the Indonesian Beef Producer & Lot Feeder Association (Apfindo), said it is a problem that the government has not yet issued the import licenses for beef imports in 2016. Currently, negotiations with foreign beef suppliers cannot be done as the importers lack the necessary licenses. This may cause a longer delay in imports hence pushing the price of beef up in the near term. Liano also believes that the 600,000 import quota is to low considering that Indonesian beef demand will continue to rise in 2016.

Beef imports have also been the center of a corruption scandal in Indonesia during the Susilo Bambang Yudhoyono presidency when politicians allegedly accepted bribes from local beef import companies in exchange for support to increase the beef import quota and appoint the local company as the importer. In times of high beef prices (due to shortages) this is a lucrative deal for both the political and the local company.