Indonesia Reviews Cattle Imports From Australia Over Spying Spat

Indonesia is reviewing its dependence on cattle imports from Australia, in the first sign that a dispute over phone tapping could affect trade between the two neighbors.

Indonesia, which takes more than 60 percent of Australia’s live cattle exports, may revise rules to allow it to import from other countries, Trade Minister Gita Wirjawan told reporters in Jakarta today. Malaysia imports most of its beef from India at half the price of Australian meat, and Indonesia should act to follow that, Wirjawan said.

Claims that the phone of Indonesian President Susilo Bambang Yudhoyono was tapped by Australian intelligence agencies led protesters in Jakarta to burn flags yesterday and demand a break in diplomatic ties, escalating tensions between the two countries to their highest level in 14 years. Yudhoyono has called for a halt in cooperation on asylum seekers and military operations.

“If our neighbor is doing tapping that reflects that they distrust us, and I think that will affect the bilateral relationship,” said Wirjawan. “We are reviewing the policy, to not let our sovereignty be disturbed.”

Wirjawan, a potential presidential candidate, last month shared a stage with Australian Prime Minister Tony Abbott at a business forum in Jakarta to joke about the two countries’ shared love of protein and to declare warmer ties. Abbott has ruled out an apology over the alleged tapping, potentially complicating his bid for a free-trade pact with Indonesia.

Cattle Stations

Two-way trade, which includes wheat, oil and dairy products, reached A$14.6 billion ($13.4 billion) last year.

Indonesia has ordered 121,000 head of Australian cattle for import this quarter and is open to further imports if needed, Bayu Krisnamurthi, the deputy trade minister, said last month after Abbott brought a trade delegation to Jakarta.

An Indonesian firm last month bought cattle farms in Australia in an effort to guarantee future supplies, as an expanding middle class in the world’s fourth most populous nation eats more beef. PT Japfa Comfeed Indonesia (JPFA) said it bought two cattle properties in the Northern Territory.

“As long as our domestic supply is not enough, we shouldn’t have supply from one place only,” Wirjawan said. “Of course this will take time and meanwhile we must maintain price stability.”

To contact the reporter on this story: Eko Listiyorini in Jakarta at elistiyorini@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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