Canadian Beef Industry Marks Milestone with Indonesia Trade Agreement

Jan 2025

Canada’s national cattle industry organization has expressed support for the newly concluded trade agreement with Indonesia, highlighting its potential to create new market access opportunities for the 60,000 Canadian beef producers it represents. The announcement comes after the successful conclusion of negotiations for the Canada-Indonesia Comprehensive Economic Partnership Agreement (CEPA).

Canadian negotiators made significant efforts to secure comprehensive tariff-free access for Canadian beef and address the sector’s challenges, according to the Canadian Cattle Association (CCA) President. The CCA highlighted the rising global demand for beef and increasing opportunities for Canada in the Indo-Pacific region. As part of a recent trade mission, the CCA participated in market visits alongside Canada Beef and engaged with retailers, who emphasized that their customers seek high-quality, grain-finished beef.

The Canadian Meat Council issued a statement characterizing the trade deal as a landmark agreement, highlighting it as a substantial opportunity for Canada’s meat industry to strengthen its foothold in one of the Indo-Pacific region’s largest and rapidly growing markets.

Indonesia has traditionally been the largest importer of live cattle from Australia, with Australian cattle accounting for an estimated 25% of the country’s total beef consumption. Much of this beef is distributed through wet markets. Additionally, over the past 18 months, Indonesia has significantly increased its purchases of Australian boxed beef, as noted in a recent report by Beef Central.

In October 2024, Indonesia set a record for monthly imports of boxed beef from Australia, reaching 11,026 tons. This marked nearly double the volume recorded in October 2023 and followed a significant increase in September, which exceeded 8,500 tons. Australian boxed beef benefits from tariff-free access to the Indonesian market under the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), signed in 2022. The agreement also allows for tariff-free imports of up to 598,000 live cattle annually, with a 2.5% tariff applied to volumes exceeding this quota. Meanwhile, the U.S. Meat Export Federation has noted an upward trend in U.S. boxed beef exports to Indonesia in 2024.

Several factors have contributed to the situation, including the ongoing growth of Indonesia’s middle class, delays in importing low-cost Indian buffalo meat in 2024, increased cold storage capacity recently, and import permit challenges. These permit issues have prompted importers to stockpile beef as a precaution against potential shortages if delays in permit allocations occur again in early 2025.

The Canada-Indonesia trade agreement comes at a time when Canadian exporters are facing potential trade challenges due to incoming U.S. President Donald Trump’s threat to impose a 25% tariff on Canadian goods entering the U.S. Canada exports about 700,000 cattle and between 215,000 to 230,000 tonnes of beef and veal to the U.S. In light of this tariff proposal, Canadian cattle producers have expressed concerns, with many indicating through local media that they are carefully monitoring the situation while adopting a cautious “wait and see” approach.

According to the USDA, Canada’s boxed beef exports in 2023 were directed to several countries, including Japan (19,401 tons), Mexico (13,717 tons), South Korea (8,143 tons), and Vietnam (4,439 tons). However, the Chinese market for Canadian beef remains closed, a restriction that has been in place since Canada identified an atypical case of bovine spongiform encephalopathy (BSE) in December 2021.

(Source: Beef Central)

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