September 2, 2016 / 5:01 AM / 2 years ago

UPDATE 1-Indonesia turns to India buffalo as beef alternative

(Updates throughout)

By Bernadette Christina Munthe

JAKARTA, Sept 2 (Reuters) - Indonesia’s procurement agency has reached an initial agreement to import an extra 70,000 tonnes of buffalo meat from India this year, as it seeks to balance the effects of food import controls aimed at improving self sufficiency.

“In principle they both agree. We’ll discuss the details today,” Bulog procurement director Wahyu said on Friday, referring to discussions with the trade and agriculture ministers.

Wahyu, who like many Indonesians goes by one name only, said the deal would bring Indonesia’s total buffalo meat imports to 80,000 tonnes in 2016.

The buffalo meat imports are intended to help stabilize meat prices that have climbed as a result of beef and cattle import restrictions.

“Buffalo meat imports provide a meat alternative to the community that’s cheaper, healthy and Halal,” Bulog CEO Djarot Kusumayakti told reporters.

According to trade ministry data, beef currently costs around 115,000 rupiah ($8.68) per kg. Bulog is selling buffalo meat for 65,000 per kg at a consumer level.

President Joko Widodo said earlier this year he wants fresh beef to cost around 80,000 rupiah per kg.

Indonesia, which has the world’s biggest Muslim population, imports virtually all of its cattle from Australia - a trade that was worth nearly $600 million in the last financial year.

Indonesia is pushing importers to start breeding their own cattle as part of efforts to reduce its dependence on imports.

Last year, Indonesia had to cull millions of chickens to ease supply swings and issued more import permits for cattle to cool beef prices.

Bulog will also import 260,000 tonnes of raw sugar this year, “most of it from Brazil,” Bulog CEO Djarot Kusumayakti told reporters.

In June, Southeast Asia’s largest economy said it would control wheat imports that had jumped after corn imports were capped this year. ($1 = 13,251 rupiah) (Reporting by Bernadette Christina Munthe; Writing by Fergus Jensen; Editing by Richard Pullin)

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