Saturday, December 9, 2023

Exports to Indonesia adapt to yet another rule change

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Country has a history of throwing bureaucratic obstacles in front of food importers.
Meat Industry Association CEO Sirma Karapeeva says the MIA ‘needs to get its head around’ the latest changes to import regulations from Indonesia.
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Meat exporters are wearily returning to the Indonesian market after trade came to a virtual standstill at the beginning of the year.

In February New Zealand’s Ministry of Foreign Affairs and Trade (MFAT) warned food exporters of new paperwork and technical requirements for the Indonesian market.

It also reported disruption to exports due to the redistribution of responsibilities for issuing import permits among Indonesian government ministries.

“Some New Zealand importers have reported that they are still awaiting a response two months after applying for registration,” MFAT said.

Trade statistics show meat exports to Indonesia crashed in December to $109,000, from $4.2 million the same month the year before, and were even lower in January at just $69,000, compared to $3m in January 2022.

The situation improved somewhat in February, with exports of $1.8m, but that was still well short of February 2022’s $9.8m.

Indonesia has a long history of throwing bureaucratic obstacles in front of food importers to protect its own farmers from competition.

Meat Industry Association chief executive Sirma Karapeeva said she could not yet say whether the latest disruptions were a resumption of that trend.

“We need to get our head around exactly what it means and what the impact for us would be.”

Shifting responsibility for import permits from the ministries of trade and agriculture to a new economic agency could be positive for exporters in the longer term. 

“If it is a transition to a single window then that is a good thing because it makes everything a lot more streamlined and sensible,” she said. 

Meat exporter ANZCO’s general manager of sales and marketing, Rick Walker, said import permits had begun to flow again recently and he expects to see a further pick-up in trade as official statistics for March are reported. 

“Our customers were stuck and they could not order product and we could not ship it.

“Those permits have started to come back into circulation over the past month or so and our customers are back in the market and it is business as usual.

“It is just one of the joys of dealing with Indonesia, unfortunately.”

NZ and the United States successfully challenged Indonesia over rules blocking the import of beef and horticultural products at the World Trade Organisation in 2016. 

NZ had challenged Indonesia’s ban on the importation of secondary cuts, accounting for 80% of its beef trade with the country, as well as rules requiring importers to apply for permits every three months and source designated amounts of locally produced beef before import permits could be granted. 

In 2011 the Indonesian market was NZ’s second largest for beef.

Last year it slipped back to seventh, between Canada and Australia.  

Walker said Indonesia is still a market worth persevering with, however.

“Some of the products we send to Indonesia are very specific and we don’t have homes for them even in the likes of China.

“Quite often we get into the position of where we have to decide are we going to keep on making that specific product and put it in the freezer and sit on it for however long we don’t know often. 

“But the alternative is throwing it down the hole and it goes into rendering and it is a loss of value.

“So it is frustrating but when the market is there it is a market worth having.”

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