Santori, the largest livestock importer in Indonesia is moving its operations to China. The move was prompted by Jakarta's restriction on live cattle importation following Canberra's own live export ban in 2011.
A rare bovine disease, called Bovine Johne's Disease (BJD), has been detected among a number of cattle herd in Central Queensland. But an agriculture lobby group had maintained the beef from the concerned state remains safe to eat as BJD cannot affect humans.
Bruce Warren, executive of Santori, said restrictions on the import of Australian cattle to Indonesia have little chances of being lifted in the near future, prompting Santori to sign an agreement to construct a feedlot in China's Shandong Province.
The new feedlot is estimated to handle 30,000 heads, making it China's largest feedlot. However, it is smaller compared to Santori's feedlot in Indonesia which is capable of handling 55,000 animals but is almost empty.
Besides the bureaucratic problem in Indonesia, Mr Warren said Santori would like to provide a solution to the growing demand for red meat in China while the Asian giant's national herd is contracting, causing an increase in beef imports through legitimate and illegitimate methods.
"Although it's not easy to work in China, it's very stable now. If you understand the business culture, it's relatively easy to plan. It's not like that (in Indonesia) at the moment," The Australian quoted Mr Warren.
Santori will initially fill the feedlot with feeding male calves born in its Chinese dairies, but want to import live cattle from Australia to China in the future.
In retaliation for Australia's month-long ban on live exports to Indonesia, Jakarta progressively reduced import quota for Australian cattle to just less than half of 2012's import quota of 260,000 heads.
The result of the Indonesian government policy is a shortage of imported beef, skyrocketing of beef meat prices and the surreptitious substitution of port in a popular Indonesian meatball dish called Bakso. The move has outraged Muslims, who are the majority in the Southeast Asian nation.
The government has raided dining establishments in Jakarta and the trade ministry is holding random sampling of Bakso and has threatened to slap five-year prison terms on establishments found guilty of mixing pork into the dish supposed to be made of pure beef.
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