Prime Minister John Key says Indonesia is almost certainly breaching its Free Trade Agreement with New Zealand with its quota on beef imports.
Mr Key will discuss the issue at high-level political meetings in Jakarta on Tuesday.
Indonesia has set a quota for beef imports from all markets, including the United States and Australia.
In 2011 it lowered the quota from 120,000 to 90,000 tonnes, and this year dropped it further to 34,000.
Mr Key says the quota is in place despite the ASEAN-Australia-New Zealand Free Trade Agreement which has a section relating to Indonesia that came into force in January.
He says it is almost certainly a breach of the agreement, and is having an impact on New Zealand trade.
"Previously we were exporting about $150 million a year of beef to this market.
"It was a very big market, our second biggest market for beef exports - and that's actually fallen back to under $100 million."
Mr Key says the beef import quota will be discussed with the Indonesian leadership on Tuesday but will be handled in a respectful way.
He says other matters likely to be talked about will be the situation in Papua, and where the Indonesian leadership sees the region going.