Indonesia import Washington apples

Indonesia’s fresh fruit import trade has virtually ground to a halt as importers and exporters await the details of a second quota to be issued under the government’s new import regulations, with all imports suspended in the meantime.

Under the new regulations, which took effect in the last quarter of 2012, importers were forced to re-apply for import permits, and they must also submit import plan estimates for all the fruits they wish to bring in under an import quota system.

Submissions for the second quota, covering the period January to June 2013, closed on 8 January, however, the trade still has no concrete news of when it will be released, prompting grave fears for pre-Chinese New Year (CNY) sales in particular.

“It’s a total mess indeed and for some disastrous,” one industry insider said. “Everyday everyone is asking each other whether they’ve heard of anything on the second IRIP. At the going rate it will be a ‘fruitless’ CNY for Indonesia.”

Many industry sources are now expecting an announcement at some point in February.

“Information out today indicates that the Ministry of Agriculture may release the 2013 quota allocation by the first week of February,” said Mark Powers of the Northwest Horticultural Council, which represents US fresh fruit growers and exporters in the Pacific Northwest region on market access issues. “We will learn more at that time.”

The first quota, issued for the period from September to December 2012, was problematic in itself, especially for Chinese exporters.

Overall import allocations were small, and several items such as Chinese mandarins and Fuji apples reportedly received no import quotas, according to key industry sources.

China, along with a number of other exporting countries, does not yet have a so-called Recognition Agreement in place with Indonesia, meaning that it cannot ship fruit and vegetables into the Port of Jakarta. Instead, it must route product into Jakarta via the Port of Surabaya, adding an inland transportation cost of around US$2,500 per container.

Besides such hurdles, containers are also taking longer to clear Indonesian customs since the regulations were introduced, and the delays are causing major issues for the trade. “It’s been a particular problem for sensitive items with limited shelf life, like Shatang mandarins, longans, durians and grapes,” said one industry source. “Any port clearance delays mean huge losses and we heard a lot of salvage work had to be done in November and December.”

The disruption and uncertainty have forced Chinese exporters to try and find alternative markets in recent months, with more price offers made to nearby markets such as Singapore, although rising domestic demand in China is reportedly easing some of the pressure.

For those supplying countries with access to the Port of Jakarta, such as the US, Australia and New Zealand, the prognosis is not much better.

Washington State apple exports to Indonesia for the November to mid-January period are down by some 67 per cent on the corresponding period of 2011/12, according to Powers, who said shippers were struggling in their efforts to supply Indonesian customers with their fruit.

Indonesia’s major supermarket and hypermarket chains have also been hard-hit by the new regulations, which prohibit importers from selling fruit directly to retailers. Now, the retailers must purchase fruit via distributors that buy from the importers, and can no longer import directly to meet their needs.