Banana Republic’s Low Fruit Trade

Nov 28th, 2011, in Business & Economy, by

Indonesia wants to export more goods - such as bananas - to Australia.

One of the more unusual events on the sidelines of the recent East Asia Summit in Bali (apart from Paris Hilton's visit) was a reported conversation between politicians and trade representatives of Indonesia and Australia, which occurred at a meeting of the Indonesia Australia Business Council in Kuta.The Jakarta Post

Indonesians Go Bananas
Indonesian Ambassador to Australia Primo Alui JoeliantoRather than raising topics of mutual concern such as the mistreatment of Australian cattle in Indonesian abattoirs, Indonesian Ambassador to Australia Primo Alui Joelianto (left) lamented Indonesia's low level of exports to Australia.

Using uncharacteristically blunt language - especially from a country that once accused its southern neighbour of "megaphone diplomacy"The Jakarta Post - Mr Joelianto said:

There must be something wrong here.

The ambassador blamed excessive Australian trade barriers, quarantine regulations and anti-dumping laws. To back up his case, he quoted the following statistics:

  • Indonesia exports half as much fish (2.5%) to Australia as its more distant neighbours Thailand (5.2%) and Singapore (5.1%), the latter a country with almost no territorial waters.
  • Indonesia is third in palm oil exports behind Malaysia (90%) and Singapore, a country with no palm-oil plantations.

Ian Parulian Siagian PDIPThis view was seconded by Ian Siagian (right), a member of parliament from PDIP (Indonesian Democratic Party of Struggle). He asked:

If Thai fruits, Philippine fruits and even Pakistani mangoes can enter Australia, why not Indonesian mangoes and bananas?

Australian Trade Minister, Dr Craig EmersonThe Australian Trade Minister, Dr Craig Emerson (left), replied that he did not know why Indonesian fruit was banned, but he would ask and tell them the answer. He also pointed out that Australian quarantine processes are fair and impartial, and politicial leaders like himself cannot intervene or interfere.

Indonesian Fruit in Australia – The Case For
A business case could certainly be made for Indonesian fruit to be allowed to enter Australia.

Bananas $14/kg in Melbourne, July 2011Earlier this year, Cyclone Yasi wiped out most of Australia's banana crop in north Queensland. This was then followed by below-average temperatures, hindering the growth of new bananasABC Rural News. As a consequence, bananas were few and the price skyrocketed to $A17 (Rp150 000) per kg.

Five years ago, bananas again were either very expensive or not available in the aftermath of Cyclone Larry.

This compares with the average price of Rp15 000-Rp35 000 ($A2 to $A4) in an Indonesian supermarket, and even less at the local market or warung, where the author can buy 3 bananas for Rp2000 ($A0.25).

Bananas travel by pedicabIndonesia is certainly blessed with a relative abundance of bananas; it is home to 200 different types of banana trees, 33 of which produce edible fruit. Perhaps Indonesian bananas could be allowed into Australia when local supplies are depleted/reduced. A reliable and continued supply of bananas would also help Australian farmers in the long term; it would provide a continued demand for bananas until Australian farmers' banana trees have regrown, rather than a slow increase from near zero.

A similar argument could also be used to allow the importation of fresh fruits that are seasonal in Australia, but available year-round in Indonesia. Some examples are:

Yellow WatermelonWatermelons come in red and yellow/champagne varieties, either with or without seeds, all at a very reasonable price.


Tourist Eating Fresh Pineapple on Kuta Beach, BaliSome enterprising locals sell fresh pineapples to Australian tourists at the Kuta beaches in Bali and Lombok for as little as Rp5000 ($A0.60) a pineapple; why not let them sell pineapples to their home country?


Strawberries from Bandung, West JavaNot a tropical fruit per se, but strawberries can be grown in the cooler climate of the hills in West and East Java. A punnet can cost less than $A1. Strawberry juice is also widely available.


Mangga/Mango Harum ManisIndonesian mangoes are also seasonal; however, the season is longer (and the fruit much cheaper) than in Australia. Mr Siagian might like to suggest that Indonesian mangoes be made available in Australia outside their own season, thereby reducing the likely opposition of Australian mango famers. Australian consumers might be confused at first by the green skin of Indonesia's most popular "harum manis" variety; Australian mangoes' skin is usually red and/or yellow.

More opinions wanted
It is not known whether the Indonesian Ambassador and Mr Siagian were expressing their own opinions in this area, or the view of the government.

But what do you think?

  • Should the Indonesian Trade Minister, Gita Wiryawan, try to obtain permission to export fruit to Australia?
  • Do you think the Australian government would agree or say "Get your hands off my bananas"?
  • Would Australians be willing to buy imported Indonesian fruit or would they go bananas?

27 Comments on “Banana Republic’s Low Fruit Trade”

  1. avatar Oigal says:

    Gee, I wonder why? Perhaps because most indonesian fruit is riddled with parasites and disease. Indonesian quarantine procedures are a joke and compromised by brown paper bags anyway. It’s a nonsense to suggest it’s a anti Indonesian thing, New Zealand has been battling for decades to get apples into OZ.

    As for fish, Indonesians all know there is a very good chance that fish you bought at the market has been soaked in chemicals..

    It’s requires a degree of professionalism to enter prime markets so I can’t see much changing in the near future.

  2. avatar David says:

    I can remember seeing on the tv showing how they injected – I think it was watermelons – with a colouring agent.

    The Australian nanny advanced progressive state has such exhaustive regulations for the minutiae of things like this, especially food obviously, that if NZ can’t manage it with apples then the Indonesian fruit industry, which I’d gather is run on much more still ‘traditional’ lines than most other industries, is unlikely to have much hope.

  3. avatar deta says:

    Should the Indonesian Trade Minister, Gita Wiryawan, try to obtain permission to export fruit to Australia?

    Taking advantage of the flood in Thailand, it might be a good timing.

    But it may be the issue of chemical residue from pesticide and fertilizer that Indonesian fruits cannot comply with International standard. One problem with Indonesian fruit industry is there are more small-scale over large-scale growers, so it is a challenge in itself to manage these small farmers to perform good agricultural practices to meet the food safety standard.

    And just by looking at that poor tukang becak who carried huge bunches of bananas – while considering the fragile nature of the fruits-, it is clear that distribution handling is the other problem.

  4. avatar paul says:

    you haven’t said what diseases,Indonesian produce has…you didn’t say it was all disease free….and quality..let’s start there..Australian import laws are strict,that’s why they have kept a lot of diseses out of the country..

  5. avatar deta says:

    Paul, put the chemical residue aside, I never know there is a serious disease caused by fruits other than diarrhea (which mostly caused by unhygienic handling, not the fruit itself). If anything, more variety of fruits can help Australians to overcome the obesity epidemic.

  6. avatar Chris says:

    Hi Oigal and David,

    New Zealand has been battling for decades to get apples into OZ.

    if NZ can’t manage it with apples

    You might not have heard, but the latest news is that New Zealand took their case to the World Trade Organisation and won, so now Australia has to allow imports of New Zealand apples. If Australia ignores the ruling (the Trade Minister said he wouldn’t, but hypothetically) then NZ is allowed to slap retaliatory tarriffs or bans on Australian products.

    Whether any shops will stock them or anyone will buy them is another matter…

  7. avatar Oigal says:

    It was an example Chris to highlight the point it was not a anti Indonesia thing as some would rush to say, there are endless barriers to importing food into Australia and even state to state. As Deta pointed out a non existent distribution system, no quality control and general poor hygiene practices rule out any real possibility of anything substantial happening. Like all things for this to be a success it would require government and private investment with a focus on outcomes not another house in Pondok Indah therefore you can safely say, ain’t gunna happen.

  8. avatar Chris says:

    Hi Oigal,

    To an extent I agree with you. Still, I wouldn’t have thought Indonesia’s distribution systems/levels of hygiene/quality control were that much worse than other developing countries listed by Ian Siagian. As he said:

    If Thai fruits, Philippine fruits and even Pakistani mangoes can enter Australia, why not Indonesian mangoes and bananas?

    I can’t say I have been to any of these countries to know what it’s like first hand, but I do remember US actress Claire Danes once described Manila (after shooting a movie there) as a:

    ghastly and weird city

    that

    smelled of cockroaches, with rats all over, and that there is no sewerage system.

    (Small tangent: Sounds a little like Jakarta, if you ask me. The Philippines’ government responded by banning all her movies).

    I also would have thought Thailand and the Philippines had a similar level of development/infrastructure to Indonesia.

  9. avatar itinerantman says:

    “you say tamaters, i say tomatoes etc” but seriously all you knowledgeable indo’s & expats-i am a newbie in indonesia but i like it! want to settle down in bali and do some business-have contacts in india & the states-any suggestions?? and no-i’m not bananas!! 🙂

  10. avatar Oigal says:

    Chris..I coud be wrong but I would think the market from those countries is pretty marginal. Australia is seriously anal ( and that is not a bad thing in this case) about quarantine

  11. avatar stevo says:

    Surely Indonesian growers and suppliers could meet the requirements, if the financial incentive is there. They may have to make some changes, but it is not an insurmountable problem, especially if started on a smaller scale to first establish the proper systems. I think quarantine regulations are often used to protect local industries, in Australia.

  12. avatar Oigal says:

    Stevo,

    It has little to do with the local growers but more to do with the level of trust at international level of the Indonesan Government. Seriously who would put any faith in any document or procedure issued or implemented by the Indonesian Goverment to ensure food quality (the tainted milk issue springs to mind).

  13. avatar berlian biru says:

    the tainted milk issue springs to mind

    I thought that was China.

  14. avatar stevo says:

    I see your point Oigal and share those concerns. However they do manage to work to higher standards in some areas. I recently noticed a popular vitamin supplement that is made in, and exported from, Indonesia, for example. Also there was a time when much the same thing was said of products made in Japan and look at it now!

    I may be overly optimistic, but I would like to think Indonesia could aspire to higher things and something like this would be a step in that direction.

  15. avatar Oigal says:

    BB,
    I was referring to the rather disturbing incident where IPB knew damn well that some suppliers were distributing contaminated infant formula milk. Worse they refused a court order to name the irresponsible and evil parties involved. Although that horrible example of humanity and disgrace to Indonesia, the Bogor Mayor and major political parties have pretty much indicated to the world their contempt for the rule of law in the continued illegal harassment of that church in Bogor. Once again it’s a typical case of a tax funded organization abusing the people’s trust and protecting those with the blood money.

    Of course, it you want to talk agricultural irresponsibility. You need look no further than the Bird Flu crisis. Singapore (and most other nations) stopped importing (and banned) poultry products from Indonesia 8 months before the Indonesian government even admitted they had a problem. Now the cynical amongst us would say that was to provide time for a little short nasty gnome to offload his exposure in the Industry whereas other more generous types would just say TII.

    For more…

    http://www.jakartaupdates.com/991-01/indonesian-milk-contamination-brouhaha

  16. avatar Chris says:

    Interesting comment from a new report about the price of Australian goods, featuring bananas:

    Australia has become one of the most expensive countries in the world and consumers largely have the Government to thank, new research suggests.

    Bananas, books, cars, housing and retail are all areas where Australians are paying too much, according to Dr Hartwich.

    “We are always told we are living in this miracle economy, the envy of the world, the one economy that survived the GFC, and it’s all true, but ordinary consumers do not feel they are living in this blessed economy – they actually feel ripped off and overcharged,” Dr Hartwich said.

    In the case of bananas, the report notes that even before Cyclone Yasi, we were paying $2.30 per kilo, which is more expensive than in New Zealand, the UK, France and the US.

    “Australians regularly pay more for their bananas compared to say a country like Germany where they don’t even grow bananas,” Dr Hartwich said.

    He says given bananas are Australia’s top-selling fruit and each person consumes about 13 kilograms of bananas a year, they should be allowed to be imported from the Philippines – even if only into non-banana growing states.

    “The Australian banana industry is not actually that big. They make it sound like a really important part of the Australian economy when in fact it isn’t,” he said.

    “It’s an industry that is really focused in a few locations and employs a few thousand people, not tens of thousands, but then basically all the rest of the country – the other 22 million people – have to pay the price for that.

    “I’m not against Australian farmers or against buying Australian bananas, but you need to have the choice.

    “In the end you have to consider the needs of lower-income Australians. Why do they have to pay for farmers that are probably richer than them?”

    The counterpoint, later in the same article:

    Dr John Quiggin from the University of Queensland’s School of Economics says while Australia is certainly expensive at present, this primarily reflects the strength of the Australian dollar rather than government policies.

    “Some government policies raise costs, but the selection of examples in this report suggests this is pretty marginal,” he said.

    “Only a minority of consumers are affected by the luxury car tax and banana prices are high only in the aftermath of a cyclone. The price has already fallen back below $2 a kilo.”

  17. avatar Geosya says:

    The power of banana..

  18. avatar kingwilly says:

    Not to mention the actual quality of Indonesian food is usually below par…

  19. avatar Yaser Antone says:

    All the pretexts from racist country like Auscriminalia to ban any import from indonesia based on their proud to be born as pigmentless skin people. Indonesia can easily retaliate it by banning importation of some selected comodities from that country too. Let them know that their country just an unimportant market with a small population who the majority of them still believe that australian continent is situated very close to europe, so they can preserve racism tendencies without any worry to be isolated by neighboring countries.

  20. avatar deta says:

    Ouch! 😉

  21. avatar andrew lai says:

    Yaser Antone, I looked up the word MORON in the dictionary…..your name was next to it!

  22. avatar Yaser Antone says:

    andrew lai, its unwise to announce or publish your illiteracy to the whole world.

  23. avatar Oigal says:

    its unwise to announce or publish your illiteracy to the whole world.

    Good advice Yaser, our Arab friend..

    Indonesia can easily retaliate it by banning importation of some selected comodities from that country too.

    ROFLMAO

  24. avatar Chris says:

    UPDATE:

    Indonesia is now restricting the number of ports that can receive fruit and vegetable imports.

    Fresh produce farmers are bracing for another blow as Indonesia clamps down on Australian food exports.

    Indonesia became a free trade partner with Australia earlier this year, but next month will restrict fresh produce from entering most of its main ports.

    It claims concerns over quarantine and illegal imports are driving the introduction of stricter regulations.

    Australian fruit and vegetable exporters say it is already taking a toll on profits.

    The new regulations will prevent shipping of Australian fruit and vegetables to all but four Indonesian ports.

    “I’m told that some of the infrastructure there isn’t suitable to receive their produce. They’re very concerned about their cold chain survival,” Senator Colbeck said.

    “There’s discussion about having to unpack containers and put their produce onto local transport 1,700 kilometres into where the markets are.

    “And they’re very concerned about the the extra time but also the potential damage to produce because they lose their cold chain supply.”

    For more detail, please see here.

  25. avatar Chris says:

    Update:

    The government says it wants to broker mutual recognition agreements (MRA) on horticulture so local exporters may have easier access to foreign markets.

    Tropical fruits unique to Indonesia, including specific varieties of mangoes and mangosteens, only recently obtained permits to enter Australia due to stringent sanitary and phytosanitary standards in the country.

    So far, Indonesia has signed MRAs with three nations – Australia, Canada and the US – which enjoy similar preferential treatment when exporting produce to Indonesia, particularly through the nation’s biggest import gateway, Tanjung Priok Port in North Jakarta.

    Under an MRA, horticultural imports from signatory nations are exempt from full-check procedures, such as scrutiny per consignment and sampling for laboratory checks.

    Under an Agriculture Minister regulation that came into force on Tuesday, horticultural imports can enter Indonesia at only four points: Soekarno-Hatta International Airport in Tangerang, Banten; Tanjung Perak Port in Surabaya, East Java; Belawan Port in Medan, North Sumatra; and Soekarno-Hatta Port in Makassar, South Sulawesi.

    Tanjung Priok Port, which was previously one of eight authorized entry points before the regulation came into effect, has been excluded due to capacity overload that has led to poor supervision of imports.

    Source

  26. avatar Oigal says:

    Tanjung Priok Port, which was previously one of eight authorized entry points before the regulation came into effect, has been excluded due to capacity overload that has led to poor supervision of imports.

    Hmmmm, that’s curious. So rather than upgrade the infrastructure of a major port as it is over capacity we close access and over load already critically busy alternate points of entry. Have to love the critical thinking in use,

  27. avatar Chris says:

    Indonesian fruit exporters deliver to Australia

    Indonesia’s fresh fruit industry has succeeded in sending product to the Australian market for the first time, with boxes of mangosteens arriving on Thursday.

    The growers haven’t been able to seel their produce until now, mainly because of Australia’s strict quarantine standards…….

    Source

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