McClay “cautiously optimistic” about Indonesian beef prospects

Hon Todd McClay, New Zealand Minister for Trade

Minister of Trade Todd McClay is encouraged by prospects for New Zealand’s beef and horticultural exports to Indonesia following a meeting with his counterpart in Jakarta today.

The Minister is currently in Indonesia, where he met for the first time with the new Indonesian Minister of Trade Enggartiasto Lukita, who took office at the end of July.

“It was clear from our discussions that demand for beef in Indonesia exceeds domestic production, with prices being high. We agreed that New Zealand could play a role in addressing these imbalances,” says McClay.

Historically, Indonesia has been an important market for New Zealand beef exports. Restrictive regulations, however, have seen New Zealand’s exports fall by over 80 percent to the country, previously, New Zealand’s second largest beef export market.

According to Meat Industry Association statistics, Indonesia was New Zealand’s seventh largest beef market in both value and volume in the year ending June 2016, with 10,437 tonnes of New Zealand beef worth $61.1 million being exported to the country over the year. This was an increase of 50 percent in both volume and value over the year earlier.

“Indonesia has recently made a number of changes to their regulations and, following this meeting, I am cautiously optimistic that our beef exports to Indonesia will start to recover.

“Indonesian consumers would benefit from access to a wide range of New Zealand cuts and products.

“I emphasised the importance of greater certainty for our producers as part of a long-term trading relationship. We agreed that officials will continue to work through any issues that restrict access for New Zealand exporters.

“Minister Lukita and I also discussed the role of New Zealand as a partner for Indonesia, including in food and agriculture. In particular, we noted New Zealand development projects to boost productivity in the beef and dairy sectors, as well as the success of Fonterra’s $40 million investment in a state-of-the-art dairy plant in Indonesia.

“Prime Minister Key and President Widodo set a clear goal for our trade relationship when they met in July of increasing two-way goods trade to NZ$4 billion by 2024,” says McClay.

Indonesia is New Zealand’s thirteenth largest trading partner. Two-way goods trade is worth around NZ$1.6 billion, and is evenly balanced.

“It is clear that Indonesia and New Zealand have highly complementary economies, and there is no shortage of opportunity for growth.

“New Zealand and Indonesia have a rich economic relationship, spanning agricultural products, renewable energy, education, aviation, and ICT,” the Minister said.

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